Using Technology, Humor and Human Behavior in Fraud Prevention

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During his keynote session at the 2024 ACFE Fraud Conference Asia-Pacific, Benjamin Quinlan, CEO and Managing Partner of Quinlan & Associates, discussed fraud risk management and the impact of emerging technologies in the anti-fraud field with Mason Wilder, CFE, ACFE Research Director. Quinlan, known for his dual expertise in finance and comedy, provided a unique perspective on addressing fraud and leveraging technology in today’s fast-evolving fraud environment.

Quinlan began by emphasizing the importance of framing fraud prevention within a strong business case. He highlighted that successful fraud risk management must transcend basic compliance and remain integral to an organization’s strategic planning. To help sell the importance of fraud prevention to leadership, Quinlan advised focusing on quantifiable metrics such as profit and loss (P&L) impacts, potential leakages and the ripple effects on stock prices and reputation. He stressed, “To make a compelling case for fraud prevention, you need to draw comparisons with competitors. Use their misfortunes as a cautionary tale.” This approach not only underscores the tangible risks but also builds a solid foundation for advocating investment in fraud prevention measures.

Fraud Solution Selection

One of Quinlan’s key messages was the importance of diligent vendor analysis when selecting fraud solutions. He noted that many organizations fall into the trap of choosing solutions based on flashy sales pitches or superficial metrics, such as rankings in Gartner reports. Instead, he recommended a thorough examination of the business’s specific needs and internal capabilities before opting for external solutions. “Technology alone cannot solve all your problems,” Quinlan said. “It’s about understanding your processes and making sure the solutions fit into your existing workflows.”

Embracing and Evaluating New Technologies

The discussion shifted to focus on the impact of new technologies in fraud prevention. Quinlan pointed out how rapid advancements in technology, from cryptocurrencies to Web 3.0, have influenced the anti-fraud field. He cited a notable example involving a major “unicorn” company in Asia that faced escalating software costs due to reliance on third-party tech solutions. Quinlan recounted a meeting with the CFO of this company, who stated, “Our margins are screwed because as we continue to grow, so do our software costs with every single bit of infrastructure that we’re using in the market. We don’t know how to control our costs in this environment. Nothing is fixed; it all floats with the rise in our customer base and our performance.” This case illustrated the challenges of hyper-scaling without internal development and the obstacles of managing technology expenses.  

Quinlan pointed out that while new technologies offer exciting opportunities, they also bring significant risks. For instance, Generative AI, while useful in enhancing productivity and content creation, also poses threats such as deep fakes and voice mimicking. Quinlan shared a disturbing case where deep fake technology was used to deceive a CFO into transferring $20 million. This highlights the growing threat of AI-enabled fraud, and the critical need for organizations to develop robust awareness and validation mechanisms to combat such risks.  “Generative AI is going to be an enabler of fraud rather than something to protect against it,” Quinlan said.

Human Awareness and Behavior

Quinlan underscored that technology alone cannot address all fraud risks. He stressed the importance of human factors, including awareness and behavioral change, in preventing fraud. Quinlan likened this to a medical diagnosis: “You need to actually diagnose the problem. That’s why we have blood tests or urine samples, X-rays, CAT scans, to finally pinpoint what the issue is, and only at that point do you follow through with the prescribed course of medicine, or treatment or surgery, whatever it might be.” Just as doctors must accurately diagnose a condition before prescribing treatment, businesses must thoroughly understand their fraud risks before implementing solutions.

He provided practical advice for organizations implementing new technologies, emphasizing the need for comprehensive training and change management. Quinlan illustrated this with an example from his own experience, where an attempt to introduce a new Customer Relationship Management (CRM) system revealed that the problem lay, not with the technology, but with the organization's processes and initiatives. Effective change management involves aligning new tools with existing workflows and ensuring that staff are both trained and motivated to adopt new systems.

Humor and Humanity in Professional Settings

Quinlan's unique background as a stand-up comedian also surfaced during this session, offering insights into how humor can be a powerful tool in the workplace. He shared how his comedic skills helped him connect with clients and colleagues, making complex or challenging topics more accessible and engaging. Quinlan noted that while humor should not be overused, it can enhance communication and foster a positive work environment. He suggested using humor strategically, acknowledging that it is important to balance levity with professionalism, especially in high stakes situations. As Quinlan put it, “Bring your full self to work every day. People generally like to work with those who can make them laugh, but remember, timing is everything.”

Lessons Learned: Key Takeaways from Benjamin Quinlan

  • Diagnose the Core Problem: Focus on solving the actual business issue rather than being swayed by new technology.

  • Avoid Overreliance on External Tech: Excessive dependence on third-party solutions can lead to rising costs and challenges.

  • Align Technology with Workflow: Ensure new technology fits seamlessly with existing workflows and is embraced by staff.

  • Address Human Factors: Effective technology use depends on addressing human behavior and reducing vulnerabilities.

  • Stay Updated and Vigilant: Technology evolves rapidly; continual learning and adaptation are essential to stay ahead.

Quinlan’s keynote session provided valuable insights, highlighting the importance of a business-focused approach to fraud prevention, thorough vendor evaluation and the strategic integration of new technologies. As organizations navigate the complex interplay of technology and fraud risk, Quinlan’s expertise offers a guiding framework for developing effective, comprehensive strategies that address both current and emerging challenges.