In some cases, it highlighted serious gaps in their understanding. This wasn’t just limited to one component of anti-fraud provisions.
In fact, it spanned across the whole spectrum of anti-fraud provision, from uncertainty on how to report fraud to an inability to coordinate anti-fraud systems.
As the FSA’s last thematic review pointed out, giant strides have been made in the fight against fraud over the last few years.
The problem is that these gains were made from a relatively low starting point and, despite the improvements, there is still much to be done.
Brokers and lenders know they need to take individual responsibility for tackling fraud; there is only so much the FSA and collaborative industry schemes can do.
Risk and operations directors will no doubt sit down and get their heads round the best practice procedures for tackling fraud and then make sure these efforts are coordinated across their firms.
A complete understanding of the type and scale of fraud they are facing is required if they want to meet good practice stipulations. This can’t be done without good data; it is the base from which the industry can attack fraud head on.
Better data will help firms reach the standards stipulated by the FSA. If they can’t collect and analyse data effectively, they can’t spot fraudulent trends in their mortgage books or on their third party panels.
Best of breed data will allow lenders to monitor their suppliers more closely and can help them continuously vet their panels.
At the moment, too many lenders don’t have a close enough control of their third parties and are content to defer to their panel managers. Better data can help them seize control of the outsourcing process.
However, too many firms can’t pull together their management information in a single, easy to read format. They often rely on a number of different anti-fraud systems, which makes coordinating anti-fraud efforts across the firm a near impossibility. They need to use web-based system to pull all their data into a single place and in a single format.
Mark Blackwell is managing director of xit2
