In this article, we look in depth at emerging technologies that can help the SIU (Special Investigation Unit) community to manage more with less and capture back some work-life balance. In today’s world, it really does seem as if the bad guys have all the best lines, as they say in the movies. They certainly seem to have the best tools, and as a consequence, fraud in all its forms is a growing problem. It would be hard to argue that the insurance industry is on top of the problem.
There are several reasons why fraud is becoming an increasing problem, including evidence that society is more accepting of this kind of crime. However, for the SIU, three specific drivers are worth exploring.
Three reasons why fraud is growing
First, the growth of organized crime. Whereas once many fraud attempts were limited or one-off, now organized crime is able to manage and orchestrate persistent frauds using the same playbook over and over again. We see this in all areas of the insurance market, from benefits and medical frauds to a whole range of auto and casualty frauds.
Second, many frauds are becoming easier to perpetrate, especially those that rely almost entirely on documentation, which can be easily forged. The recent explosion of AI tools is only going to make the problem worse – look soon for entirely fictitious witness depositions!
Finally, the ease of working remotely, including from outside the USA, compounds both of the above. We are all well aware of the shocking estimates that over 50% of benefits frauds, well over $10 billion, against the State of California after the pandemic were perpetrated by criminals operating from Africa or Russia. Being able to act remotely makes it easier to organize and, even when detected, to avoid the risk of punishment.
SIU challenges
SIU teams face huge challenges against this backdrop of rising volume and sophistication. In many ways, the most significant is the diversion of management attention and investment towards data-driven efforts to mitigate risks before binding. The effect is often seen in budget pressures that flow down to the SIU and reduce SIU effectiveness. While senior management may see this as a price worth paying, for those at the sharp end, the effect is certainly demoralising.
The erosion of budgets is having a clear effect on staffing and expense budgets, and investigators and management teams in SIUs report that, increasingly, they have little capacity for anything more than desk-based investigations. The result is that many potential frauds are now being ignored because of a lack of capacity, especially the capacity to incur expenses.
We see this playing out in a very human way. SIU teams are getting older, and it is getting more difficult to bring new skills into the industry or to cover the costs of training and reskilling. At the same time, the investigative task becomes more challenging as staff need to become familiar with digital media, OSINT (Open-Source Intelligence) techniques, and increasingly strict rules around evidential quality and chains of custody.
What can be done to support SIUs?
To paraphrase Benjamin Franklin, nothing can be said to be certain except death, taxes, and smaller budgets. For an SIU team, smaller budgets are the new certainty. Therefore, to stay ahead, an SIU must embrace technology. If, as we pointed out above, investigators are increasingly chained to their desks, then we have two options:
1. To use the desktop more effectively and
2. To embrace remote working tools
How to use the desktop more effectively
When it comes to managing the desktop more effectively, there are a growing number of tools that an SIU team can use, but two broad solutions stand out: tools to manage OSINT investigation and reporting and algorithmic fraud detection tools.
Examples of the first category include products like Nimbus and Hunchly, browser add-ins that allow an investigator to seamlessly capture content from web tabs into a snapshot report, making it easier to browse a range of sources including social media feeds. In the latter category are products such as CLEAR, a controversial anti-fraud solution that provides risk scoring on data aggregated from multiple public and private sources to help investigators quickly build a picture of individuals and companies they are investigating. Although CLEAR cannot, under FCRA (The Fair Credit Reporting Act) rules, be utilized for underwriting decisions, it offers valuable tools for the investigator.
Remote working tools
Looking at remote working, we are all familiar with video conference tools such as Teams and Zoom. Without a doubt, these are great tools for home working and to allow work groups to communicate with remote branch offices. However, from an investigative and evidentiary standpoint, much more is required, and an SIU may need to look for more sophisticated solutions. These could include emerging technologies such as blockchain and artificial intelligence to automate transcriptions. A blockchain is a way to secure records by making an encrypted signature of the record in an independent ledger system. The beauty of blockchain is that each record contains a coded link to the previous record, with each new record being added as a new block in the chain. Once a block is added (think of a link), there is no way to change that block without breaking the chain. Artificial intelligence has been used for several years for transcription – the difference in 2024 is that these systems are now being “trained” on dedicated datasets, such as courtroom recordings, call center conversations, and others, so the transcription is becoming incredibly reliable.
How can some of these technologies help to address different real-world problems?
Consider the situation where a claimant is suspected of fraudulently submitting medical bills from an overseas hospital, for instance, where it is suspected the invoice is a pure forgery or an amended bill relating to another patient or admission date. In this case, the policy might deny the claim and refer to law enforcement. But, to do so, we must obtain a statement from the overseas hospital confirming our suspicions. In this case, we will need a video conferencing solution that will be easy for an untrained user overseas to use, that will record and transcribe the recording, and then to maintain evidential integrity, have a self-contained way to demonstrate later that the recording is genuine and has not been tampered with.
This is a splendid example of the blockchain delivering real-world benefits because applications that can record a secure code in the blockchain allow investigators to maintain a proven chain of custody even after the recording has been shared with other parties, which might include law enforcement and the courts.
Remote investigations
Another challenge for investigators is finding ways of conducting investigations economically out of state. Sadly, the days of an adequate travel budget are long gone, and increasingly, a desk-bound investigator will be relying on third parties, such as private investigators and paralegals, to conduct interviews. Those people need to be fully briefed, but once briefed, the investigator has little control over the process until the results return.
Imagine if, instead of needing to manage a time-consuming advance briefing, the investigator could be a “fly on the wall” and observe everything that goes on in the interview. Solutions now exist that allow investigators to join an interview session anywhere in the world secretly and to help guide the interviewer on the questions to be asked of the interviewee. Investigators can save time and travel costs and ensure the interview is conducted more effectively, making it far more likely that the investigator will get good-quality results. Combine that technology with a good chain of custody controls and the investigator is in a much stronger position to rely on the evidence gathered even if the investigation ends up going all the way to trial.
Note: One concern that might be raised is the recording laws in various states and jurisdictions. In fact, 37 states have “one-party consent” where there is no need to notify a witness that a recording is being made. Even in those “two-party” states where all parties’ consent to the recording is required, there is generally no obligation to enunciate all the parties on the call, so the secret observer can still participate and help to manage the interview. This is not a substitute for appropriate legal advice for your situation.
Case study – 70% reduction in field visits
The budget problems we talked about above are not unique to the USA. One global multi-line insurer’s SIU was under pressure to achieve an astonishing 70% reduction in field visits. It did so by adopting new remote interview tools that allowed the team to conduct almost 600 interviews remotely in the first year. Initially, the new way of working was seen as an answer to a problem. Ironically, however, the outcome was positive for everyone – better quality interviews led to improved investigation conversion rates, leading to shorter investigations and a quicker customer journey for validated claims. On top of this, the team contributed to the insurer’s sustainability (ESG) goals by reducing the carbon footprint with reduced travel miles.
Any review of technologies must deal with two major barriers – budgets and implementation. Here we have good news: all of the technology solutions we have discussed operate as browser tools or “in the cloud” and as subscription services. Cloud delivery means there is no longer a need for the IT department to find capacity for new services in the data center or time in the schedule for implementation. Meanwhile, subscription services make it easier to trial and buy just what you need; at the same time, because the subscription costs are often completely transparent (such as $ per minute pricing) with no capital investment to worry about, teams can quickly validate the savings they are making.
Embracing new technology
Overall, our conclusion is that SIUs can respond to the changing environment in very positive ways. No one likes budget cuts or downsized teams, but we all have a choice in how we respond. Embracing new technology can be positive in so many ways, as a means to do more with less, to expand our own horizons by learning new skills, and by contributing to making the world a better place by using our resources more efficiently.
Jed Stone is the CRO for MeaConnexus, software designed to enable evidential-quality remote video interviews for fraud investigators and law enforcement.
David Jackson is an independent expert on technologies for the justice and law enforcement communities and a Board member of the IJIS Institute in Ashburn, VA.
