InternalFraud Internal Fraud MitigationStrategies Mitigation Strategies

Confidential
TheonlytimeaTataIndicom Phonewontbeaccessible. Pleaseswitchoffyourmobilephonesduringthepresentation.

FRAUDReferenceDataSources

IdentifyingFRAUD
TransactionRecordsAnalysis(e.g.CDR) DiscountComponents DemoPlans HyperLinkingProcessofAnalysis ReferencingagainstsubmittedDocuments CallOutVerification Call Out Verification Onsite/OffsiteInvestigation RegularAccountlevelBillChecks. FraudForums/PartnerCollaborations Fraud Forums/Partner Collaborations CustomerComplaintsAnalysisandInvestigation WhistleBlowers

FRAUDIndicators
RevenueBehavior TransactionVolume Transaction Volume Location Billing Servicesacquired ConfigurationErrors SuppressedCDRs /Billing Suppressed CDRs / Billing ErroneousDataRecords SwitchOverloading g Equipment/SystemOutages

FRAUDDetectionTools&Techniques
RealTimeMonitoringTools ManualProfilingbyTeam g y TestingandSimulation FilteringandNormalizationTechniques SegmentationTechniques Segmentation Techniques ScoringTechniques BashingandTrendingTechniques CaseCorrelations PostValidationMethods UseofAlerts/Alarmsandselftriggered Notifications/escalations

FraudMitigation Fraud Mitigation

NoBusiness,NoRisks.

NoBusiness,NoRisks.
Ironically,EveryBusinesssuccessisthecause ofrisk f ik Moresuccess,moremoney,morefraud Easiestwaytoreducefraudistoreduce business Dontlaugh.ThisiswhatmostFCandHR peopledo,unintentionally people do, unintentionally

FraudCategories
FourCategoriesofFraud:
OperationalFraud ComplianceFraud Compliance Fraud FinancialFraud StrategicFraud St t i F d

LevelsofImpact(Fraud)
Likelihood 5. Very high 4. 4 High 3. Medium 2. Low 1. Very Low Impact Very Serious Serious Moderate Minor Insignificant
Financial Impact >100K 51K-100K 51K 100K 25K-50K 6K-25K 0-5K

FraudRootCauses
Policyproblem Peopleproblem Unavoidableproblem p

FraudinRevenueCycleofTelecos FraudinRevenueCycleofTelecos

SalesandMarketingFrauds

NetworkOperationFrauds

BillingOperationFrauds

CreditandCollectionFrauds

Scenario1 Procurement of Diesel for DG Sets at tower sites ProcurementofDieselforDGSetsattowersites

Scenario2 Scenario2 Kickbackstoemployees

FraudMitigationStrategies
Mitigation Resources Structure Culture Leadership Person Identified Fraud Risks

Alignment:Framework
Structure

OrgStructure JobDesign Job Design Policies&procedures Governance,InternalControls Governance Internal Controls ManagementSystems,SOPs Central SpecialTaskForce InternalAudit,SurpriseAudit, RegularAudit(Surveillance) LevelsofAuthority

Alignment:Framework
Resources

Tools ITSystems Rulesdetection WhistleBlower Profiling/AssessmentTools Profiling/Assessment Tools BudgetforInvestigation,Litigation

Strategy:Framework
Leadership

InvoluntaryRoleModeling Personalaccountabilityand Commitment Watchout:Currentpeople p promotedtoKeyPositions y Promotionalcriteria

Alignment:Framework
Person

NewEmployeeBackgroundchecks WillingnesstoPunish Willingness to Punish RootCauseAnalysis(Mager&Pipe) Rotation FraudDetection&AnalysisCompetency HighRiskJobs High Risk Jobs ITbreachesthroughFrontline

TheFourDesperates 1. Desperate 1 D t Competition 3. Desperate Achievers A hi 2. Desperate 2 D t Co su e Consumer 4. Desperate Changes

PossibleGeneralRootCausesforFraud
1. 2. 2 3. 4. "Everyonedoesit." "Itwassmallpotatoes." " ll " "Theyhaditcoming." therevengesyndrome "Ihaditcoming." theequitysyndrome

GENERALSTRATEGIESANDPOLICIES
ClassificationofBehaviors
DisrespectfulWorkplaceBehavior ProgressiveDiscipline ZeroTolerance RecruitmentandSelection Exit EmployeeAssistanceProgram Employee Assistance Program AnonymousHotline CommunicationandFeedback TrainingandEducation FormalComplaintandGrievance

GENERALSTRATEGIESANDPOLICIES
Leadership
1 Leaders act as role models whether consciously 1.Leadersactasrolemodels whetherconsciously orunconsciously 2.Leadersdeterminetheworkingenvironment

SPECIFICSTRATEGIESANDPOLICIES
TheftandFraud RootCauses
Profile: 68 6% no prior criminal record Aged 26 Profile:68.6% nopriorcriminalrecord,Aged26 40yearsold,AnnualincomebetweenRM15k RM30k,2 5yrsofservice RM30k, 25 yrs of service Strugglingfinanciallyorlargepurchases
difficulttimeintheirlives getsoutofhand

Mergerandacquisitionorreorganizationactivity. g q g y
Idonthaveacareerhereattitude.

SPECIFICSTRATEGIESANDPOLICIES
TheftandFraud Prevention
Background checks Backgroundchecks Dutiessegregated A Anonymoushotline h tli Communicatesuccesses Makeabignoisewhendiscovered k bi i h di d Videosurveillanceequipment

SPECIFICSTRATEGIESANDPOLICIES
Violationofconfidentialityorsecurityof companyinformation company information Prevention
SecurityPolicies Ownership of Intellectual Property OwnershipofIntellectualProperty

EmployeerelatedRedflags

QualitiesofanEffectiveFRAUDAnalyst
UnquestionableIntegrity HighlyAnalytical Highly Analytical TrainableandKnowledgeable HighlyMotivated/Self Starter Highly Motivated/SelfStarter CreativeandExploratory Flexible,OpentoDiversityandChanges SystematicandOrganized

Summary
NoHardandFastRule HighlyAnalystDependent CannotbeFullyAutomated C b F ll A d KeepvolumewithinMinimumlevels MaximizeallDataSources MaintainUpdatedReferenceTablesand BackUpRecords DetectionisBESTesp.ifdoneREALTIME Detection is BEST esp if done REAL TIME CapitalizeonPastDetectionsand HistoricalRecords CarefulandmaintainConfidentiality

Anticipate their moves Think like a FRAUDSTER

THANKYOU THANK YOU