Date posted: 26/08/2019 7 min read

Facing the new frontier: How tech is changing the way fraud is detected and prevented

Founded in 1997, Gorilla Technology is one of New Zealand’s leading IT companies - with a mission to assist organisations to use technology effectively and safely in a time where fraud is more likely than ever before.

In brief

  • Accountants need to keep up-to-date on the latest technologies and their potential to impact fraud.
  • Machine learning and AI will play an increasingly important role in fraud prevention and detection.
  • Soft skills such as strategic thinking and communication remain highly relevant to professionals in the fields of fraud and forensic accounting.

Paul Spain, futurist and CEO of edge AI-based technology company Gorilla Technologies, shares his insights into the evolution of fraud and how finance and accounting professionals can better prepare their clients for the future, as part of the upcoming 2019 Fraud & Forensic Conference in Auckland, NZ.

Digital technology will continue to change fraud

In order to prepare for the future, Spain looks to the past to inform his expectations and advice to clients. He notes the evolution of the credit card from a paper-based transaction to a real-time digital process as a prime example of how digital technology has had a major impact on the way fraud is prevented and detected.

“Initially when credit cards were first distributed, the opportunities for fraud were probably dramatically higher as transactions would actually take weeks or months to get back to your local bank. Instead of a quick solution where money could be returned digitally from the bank, customers would have to obtain paper copies of that transaction and present it to the bank in person,” Spain explains.

Today, Spain sees artificial intelligence and machine learning playing an increasingly important role in not only detecting and resolving fraud, but preventing it entirely. He argues that perhaps the most powerful implementation of AI and machine learning is its potential to analyse past instances of fraud to help better predict future threats.

“Artificial intelligence technology will be able to utilise past data of organisations subjected to fraud, and start identifying situations where fraud is potentially taking place or could be about to take place in other organisations,'' says Spain.

“It will be able to identify trends and unusual changes and then investigate whether these are indicators of fraud. As a result, this could mean future instances of fraud are identified earlier and thus with minimal consequences.”

“Everybody involved in business should be wearing the hat of a futurist. It's very important that we don't just look at the here and now, but that we're continuing to prepare ourselves for how technology will change the industries we're involved in and the nature of the work that we do.”
Paul Spain Futurist and CEO at Gorilla Technologies.

A commitment to continuous improvement is crucial

In an era of constant change, Spain asserts actively seeking opportunities for professional growth is particularly pertinent for finance professionals in the fraud and forensics space.

“Everybody involved in business should be wearing the hat of a futurist. It's very important that we don't just look at the here and now, but that we're continuing to prepare ourselves for how technology will change the industries we're involved in and the nature of the work that we do,” Spain says.

As technology becomes increasingly central to the management of financial data, understanding the risks and solutions presented by new technologies will become a vital responsibility of accounting professionals seeking to detect and prevent fraud.

“It’s absolutely critical that both organisations and individuals are investing appropriately into the pieces that will help them become successful, and either minimise fraud or capture it as early as possible going into the future,'' Spain says.

On an individual level, Spain suggests accountants should be thinking about how they can future-proof their skill set via online learning platforms and various forms of educational content.

“Individuals need to ask themselves: ‘What are the things that will impact what I do? What’s the information that I need to learn for myself and the organisation I work at, to be relevant to varying stakeholders?’ and then actively seek the answers to those questions,” he says.

As a futurist, Spain believes accounting professionals in the fields of fraud and forensics need to adopt a continuous learning model, for which conferences and events are valuable sources of information.

The role of finance and accounting professional will change too.

According to Spain, keeping abreast of the latest technologies is crucial, but so is the ability to think strategically. New technologies are only useful if implemented correctly, which means the role of the forensic accounting professional is also to ensure they continue to develop necessary soft skills. These include curiosity, the ability to apply creative and critical thinking, communication, analytical and research skills..

“I think the role of humans isn't necessarily diminished, but it is changing. New opportunities will arise as technology evolves and consequently individuals will need to know how to work with these new technological tools,” Spain says.

Paul also explains soft skills such as communication will remain essential in order to synthesise and present technical knowledge, so businesses can make informed decisions when adopting new technology.

“It’s important to remember what works today may not work tomorrow. Organisations might be throwing out one piece of technology and picking up another that is keeping up with new challenges. So the professionals in these situations need to adapt as new tools come in and guide their clients and organisation in adapting to new processes too.”