Transactions & Business Events presents:

Visual Analytics: An Enhanced View into Corruption, Fraud, Waste and Abuse
Anthony DeSantis, Senior Manager, Deloitte Financial Advisory Services LLP Matt Gentile, Principal, Deloitte Financial Advisory Services LLP Richard Simon, Senior Manager, Deloitte Financial Advisory Services LLP David Williams, Chief Executive Officer, Deloitte Financial Advisory Services LLP

May 11, 2011

Agenda
Introduction

Visual analytics: Its all about the data

Enhancing your view into corruption, fraud, waste and abuse Applications of visual analytics

Q&A

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Release for answers to polling questions

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Poll question #1
Has your company ever used visual analytics techniques to identify corruption, fraud, waste and abuse? Yes No NA/Dont know

Copyright 2011 Deloitte Development LLC. All rights reserved.

Visual Analytics: Its all about the data

A new visual lexicon is evolving to communicate rich information about increasingly complex data

Word clouds/tag clouds

Social networks and community detection

Copyright 2011 Deloitte Development LLC. All rights reserved.

Visual analytics is the science of analytical reasoning facilitated by interactive visual interfaces

Cognition Visual queries Interactive feedback

Visual representation

Analytical reasoning

Exploration Interpretation Decision-making

Visual analytics

Statistics Relationships Data reduction

Data representation

Production and dissemination

Monitoring Storytelling Communicating

Framework adapted from Linkping University, itn.lie.se/mit/research/information-and-geo-visualization/l=en

Copyright 2011 Deloitte Development LLC. All rights reserved.

Exploring transactional data using visual analytic techniques

Copyright 2011 Deloitte Development LLC. All rights reserved.

Poll question #2
What is the most advanced visual analytic tool at your company? MS Excel Business intelligence platforms Specialized analytic software Custom software NA/Dont know

Copyright 2011 Deloitte Development LLC. All rights reserved.

Enhancing your view into corruption, fraud, waste and abuse

Enhancing your view into corruption, fraud, waste and abuse

Source: http://newsmap.jp/#/b,m,n,s,t,w/us/view/all/fraud/

1
Copyright 2011 Deloitte Development LLC. All rights reserved.

Enhancing your view into corruption, fraud, waste and abuse

Doing More With Less

According to the ACFE, 40% of occupational fraud is identified via tip 1 Increased regulatory requirement Limited resources (time, budget and people) Every day, more and more electronic data is created Finding a needle in the haystack Rules-based approaches may only take you so far BI tools and other data mining software include visual analytic capabilities Analysts becoming accustomed to viewing data visually Identify complex trends, patterns or anomalies
Copyright 2011 Deloitte Development LLC. All rights reserved.

Volume of Data

Technology & Adoption

1. ACFE 2010 Report to the Nations on Occupational Fraud and Abuse

Enhancing your view into corruption, fraud, waste and abuse

V i s u a l

A n a l y t i c s
Copyright 2011 Deloitte Development LLC. All rights reserved.

Applications of visual analytics

Link analysis
Unexpected relationships Anti-money laundering Social Networks e-Discovery

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Beyond link analysis

Treemaps
Accommodate hundreds or thousands of data points in one Doing More screen With Less Patterns and exceptions can be spotted in seconds Multiple dimensions can be displayed at the same time Further enhanced with sliders and drilldown capabilities

Doing More With Less Brazil

Germany
UK China

Doing More US With Less

-1
Percent Change
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Applying modular algorithms and profiles to detect candidate high-risk transactions

Suspect transactions revealed by applying: Classifications

Scoring algorithms
Complex profiles

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Spatial analysis gets its start proximity & correlation!

In 1854, John Snow depicted a cholera outbreak in London using points to represent the locations of some individual cases, possibly the earliest use of the geographic method. His study of the distribution of cholera led to the source of the disease, a contaminated water pump (the Broad Street Pump, whose handle he had disconnected, thus terminating the outbreak) within the heart of the cholera outbreak.

http://en.wikipedia.org/wiki/Geographic_information_system
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No longer just static pictures dynamic data!

Racial breakdown of Chicago. Red is White (42%) Blue is Black (36.8%) Green is Asian (4.4%) Orange is Hispanic (26%) Gray is Other Each dot = 25 people
Data from Census 2000 & 2010. Base map OpenStreetMap, CC-BY-SA
Source: Eric Fischer

http://www.radicalcartography.net/index.html?chicagodots

Copyright 2011 Deloitte Development LLC. All rights reserved.

Geospatial Analytics the collection, visualization and analysis of data that can be tied to a geographic location on, above or below the Earths surface.
Everything is related to everything else, but near things are more related than distant things.
Source: Toblers first law of geography

>80%

of all data now has a location component

Copyright 2011 Deloitte Development LLC. All rights reserved.

How do we get there?

Geo-Analytics

Where is fraud, waste & abuse most

likely to occur?

Where is the greatest concentration of

risk and opportunity? Geospatial Intelligence Business Intelligence & Financial Intelligence

Where to deploy my assets, tools and

resources to achieve the greatest result or reach the greatest number of customers?

How can I shape policy to influence

geographically localized behaviors?

Financial data Transactions Institutions People Places Goods/Materials Contracts Addresses/lat/long Territories
Source: Sean Gorman, GeoIQ
Copyright 2011 Deloitte Development LLC. All rights reserved.

Poll question #3
Which is the most important reason to use geospatial analytics in regards to mitigating corruption, fraud, waste and abuse at your company? To determine where corruption, fraud, waste & abuse are most likely to occur To determine where the greatest concentration of risk and opportunity lies To determine where to deploy assets, tools and resources to achieve the greatest result or reach the greatest number of customers To determine how to shape policy to influence geographic consumer behaviors NA/Dont know
Copyright 2011 Deloitte Development LLC. All rights reserved.

Applied geospatial example: Medicare fraud

A Geographic Information System (GIS) Transforms tabular data into location information
Coordinates are assigned to spreadsheet data through a process called geocoding. This is a preliminary step in the analysis to identify fee-for-service fraud, such as Medicare fraud. The red points below symbolize the location of clinics in Miami, FL:

(25.77981, -80.25141)

HYPOTHETICAL SCENARIO

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Features can be symbolized based on underlying data

The same clinics are now represented by location and by the number of Medicare claims filed and a visual story begins to unfold.

HYPOTHETICAL SCENARIO

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Features can be symbolized based on underlying data

A suspected bad actor is visually identified, but additional data and information is needed before moving forward.
24,000 claims

43,000 claims

10,000 claims 19,000 claims 7,000 claims

12,000 claims 18,000 claims

HYPOTHETICAL SCENARIO

Copyright 2011 Deloitte Development LLC. All rights reserved.

GIS integrates disparate data by overlaying multiple data sets

The heat map below illustrates the prevalence of people over 65 years old and low income (highest concentration in red)*. The clinic in question is even more conspicuous because it does not reflect the socio-demographic profile of a beneficiary.

Multiple data sets can be combined to create a service beneficiary (patient) profile using: Socio-demographic information Travel Distance/Time Data Primary Care Service Area Data Patient Address Information

*Source: http://factfinder.census.gov/

HYPOTHETICAL SCENARIO

Copyright 2011 Deloitte Development LLC. All rights reserved.

GIS integrates disparate data by overlaying multiple data sets

We can also overlay market segmentation data on the clinic locations and run spatial queries to determine statistically significant relationships between a clinic location and the surrounding neighborhoods.

Market demographics are incongruous with billing patterns.

According to the market segmentation* data, area #12 characterizes: Up and Coming Families Average age of 39.1 years Upper-middle class Predominately White Single-family units
*Source: http://www.esri.com/data/esri_data/tapestry.html

HYPOTHETICAL SCENARIO

Copyright 2011 Deloitte Development LLC. All rights reserved.

Functionality for conducting robust statistical analysis is built-In

Where are the outliers? By combining clinic location data ancillary socio-demographic data we can conduct a cluster/outlier analysis that can help us statistically find anomalous billing patterns when visual relationships are not visually discernable.

A cluster analysis of patient addresses (light blue points) reveals: Patients are all retirement/nursing home residents Patients are low income senior citizens They are outside of the average drive-time distance to a clinic We can test our hypothesis using a variety of statistical tools built into GIS, including: Nearest Neighbor Analysis Spatial Autocorrelation Outlier Analysis Linear Regression Analysis Cluster Analysis

HYPOTHETICAL SCENARIO

Copyright 2011 Deloitte Development LLC. All rights reserved.

Poll question #4
How much of an impact will the use of visual analytics to discover fraud have on companies in the next 5 years?

Significant impact Somewhat of an impact Little to no impact NA/Dont know

Copyright 2011 Deloitte Development LLC. All rights reserved.

Visual Analytics Many possibilities

Exploring, not just visualizing the data One size does not fit all Structured and unstructured data

Copyright 2011 Deloitte Development LLC. All rights reserved.

Questions and Answers

Poll question #5
Are you interested in receiving follow up articles and white papers surrounding todays topic from Deloitte? Yes No NA

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Contact info
Anthony DeSantis Senior Manager Deloitte Financial Advisory Services LLP +1 212 436 3307 [email protected] Matt Gentile Principal Deloitte Financial Advisory Services LLP +1 571 882 6880 [email protected]

Richard Simon Senior Manager Deloitte Financial Advisory Services LLP +1 212 436 3438 [email protected]
David Williams Chief Executive Officer Deloitte Financial Advisory Services LLP +1 212 492 2879 [email protected]
Copyright 2011 Deloitte Development LLC. All rights reserved.

This presentation contains general information only and Deloitte is not, by means of this presentation, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this presentation.

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