“In March 2006, the Communications Fraud Control Association (CFCA) estimated that annual global fraud losses in the telecom sector were between $54 billion and $60 billion, and the losses continue to be substantial. Many types of fraud have been identified, but by far the most prevalent is subscription fraud.”
“SAP, on the other hand, has had a lot of issues in the past couple of years. They haven’t made a direct MDM acquisition since they acquired A2i years and years ago, which was a PIM vendor and they’ve just been working off of that architecture and been trying to improve it.”
“Data matching is the ability to compare records that are not exactly the same but are so similar that we may conclude, that they represent the same real world object.”
“So now that MDM has been around for a while, and the master data terminology has drifted into our standard vocabulary, it might be worth stepping back and asking a different question: Is MDM the revolutionary approach to organizational data consolidation and enterprise information management or is it devolving into yet another (of many) data management tools?”
In March 2006, the Communications Fraud Control Association (CFCA) estimated that annual global fraud losses in the telecom sector were between $54 billion and $60 billion, and the losses continue to be substantial. Many types of fraud have been identified, but by far the most prevalent is subscription fraud.
A new subscriber signs up for mobile service using false or stolen identification, with no intention of paying the bill. Since new subscribers are given a grace period of one to three months before the account is shut off, the criminal can make thousands of dollars worth of calls before being detected.
Subscription fraud can be difficult to differentiate from simple bad debt when genuine customers are unable to pay. It’s been estimated that 30% or more of all bad debt is actually subscription fraud.
Different solutions have been tried yet fraud continues to be a problem. One common method is to look for patterns of use that suggest potential fraud, but criminals adapt and learn to probe the limits of these fraud detection systems fairly quickly.
Given the industry’s long history with fraudsters, it seems probable that enough is known about them that they could be spotted at the time they subscribe. Using similarity searching technology, would-be fraudsters can be vetted against lists of known bad actors. Using multiple public and private data sources, non-obvious relationships can highlight risky individuals, and they can then be asked to submit to a more thorough qualification process.
Identity resolution is already used across multiple industries to solve similar problems. By matching an individual’s attributes with common attributes associated with those committing fraud, the “bad guys” are being detected in areas like lottery fraud, fusion centers, insider trading, and workers’ compensation employer fraud. Part of finding the bad guys is finding hidden relationships, connections that often uncover rings of criminals.
The “birds of a feather” axiom predicts that subscription fraud criminals often share the same types of social networks. Applying identity resolution to subscription fraud problem may be the way to finally solve it.
“The Dallas police has a high tech fusion center that monitors potential threats in Dallas. They helped foil the plot when a man was planning on blowing up the Bank of America building… Four years ago, Dallas Police put alert on Kimberly Al-Homsi because she was scouting runways at Love Field. On Saturday, she was arrested allegedly with pipe bombs in her car.”
“When a recruiter and/or a hiring manager finds someone for a job position it is basically done by getting in a number of candidates and then choose the best fit among them. This of course don’t make up for, that there may be someone better fit among all those people that were not among the candidates. We have the same problem in data matching when we are deduplicating, consolidating or matching for other purposes.”
“Proposals in Obama’s new proposal with a strong I.T. flavor include… Adopt real-time analysis of claims and payments data to identify waste, fraud and abuse in public health programs… Establish a CMS/IRS data-matching program to match information on entities that have evaded filing taxes against provider billing data to better detect fraudulent providers.”
“We’ve noted several times over the past couple of years how the market visibility of entity resolution has been evolving. Now the consolidation of the master data management (MDM) market is causing even more conjecture about the crucial role of this technology.”
“Lindsey adds that personnel on Joint Terrorism Task Forces, in fusion centers or in other counterterrorism-related positions could benefit from the system by accessing the more complete data source and incorporating information found there into their own analyses and evaluations. ‘We’re out there for the crime fighters, but we’re also out there to prevent terrorism activities,’ he states.”
“The Federal Bureau of Investigation estimates that the total cost of insurance fraud (excluding health care) exceeds $40 billion per year. That means insurance fraud costs the average U.S. family between $400 and $700 annually in the form of increased premiums. In California alone, the Department of Insurance (CDOI) identified the potential loss from fraud in the 2007/2008 fiscal year at $1.2 billion, according to the 2008 Annual Report of the Insurance Commissioner.”
“Some airlines already have moved to a new identification program, called Secure Flight. All domestic carriers are expected to move to the new program by March. The government system will include more details about the passenger in question, including the passenger’s sex, birth date and full name as it appears on a government identification document.”
“The American Recovery and Reinvestment Act of 2009 provides significant cash incentives to physicians who implement electronic health records. However, in order to qualify for these incentives the physician must not only have the proper software but must engage in “meaningful use” of the software. The government plans to publish the criteria for meaningful use in February 2010. ARRA incentive reimbursement to physicians will begin in 2011.”
We’ve noted several times over the past couple of years how the market visibility of entity resolution has been evolving. Now the consolidation of the master data management (MDM) market is causing even more conjecture about the crucial role of this technology.
A few days after IBM’s recent announcement about buying Initiate Systems and a little over a week after Informatica’s acquisition of Siperian, Wayne Eckerson at tdwi wrote an insightful article in which he noted that these acquisitions are about MDM, yet they are also about identity resolution:
“Siperian is well-known for its master data management (MDM) solution… Initiate, on the other hand, is well-known for its identity resolution hub… At this point, I need to cycle back to Siperian and point out that it, too, provides identity resolution capabilities. And I forgot to mention that Initiate also has some MDM capabilities. You could say that Siperian is mostly MDM, but with identity resolution and other capabilities, whereas Initiate is mostly about identity resolution, but with MDM and other capabilities.”
Considering IBM’s acquisition of Initiate Systems, along with Informatica’s purchase of Siperian shortly before that, plus its 2008 purchase of Identity Systems, it’s clear that IdentityResolutionDaily is going to have even more to write about this year than before!
“IBM owes it to its customers to explain if, when and how it plans to rationalize and integrate the overlapping MDM and data quality technology, said Ivan Chong, executive vice-president of the Redwood City, Calif.-based company’s data quality product division. ‘If I were them, I would have the impression that IBM is repurposing the technology for something completely different,’ said Chong.”
“Of the more than 300 law enforcement agencies in Florida, 105 — including the Lee and Charlotte county sheriffs’ offices — are currently sharing information on FINDER. Another 41 are currently utilizing the database, but aren’t sharing information. ‘The more departments we can get involved, the better,’ Weschler said. In the coming months, the Southwest Florida regional fusion center is slated to be operational. As an information hub, the center will gather, digest and compare data from across 10 Southwest Florida counties and 72 other fusion centers in the United States.”
“But as Abbasi and his team at Informatica continue to grow faster than most software companies, and as CIOs continue to realize how valuable Informatica’s data-integration and data-quality tools can be, and as it grows and expands into new areas such as MDM via its Siperian acquisition, Informatica’s value to those big software companies is soaring.”
“‘It’s just a blatant attempt to obtain benefits and money,’ Cosson said. ‘If someone files a false claim or is working while receiving benefits, ultimately that results in a loss of revenue for the insurance company and if they lose revenues, they have to raise rates and then the premiums clearly go up for legitimate businesses all over Colorado.’ The Coalition Against Insurance Fraud says that all insurance fraud costs every family $1,000 a year in higher premiums and it makes goods and services more expensive.”
“In the last post we looked at a formal model for describing entity-based integration. Now let’s turn our attention to how entity resolution (ER) systems are actually implemented. One of the most important design decisions is whether the system will perform entity identity management. Systems perform identity management when they create and store the attributes values for the identities that they process.”
“The two acquisitions focus the spotlight on two of the hottest functions today, in terms of user organizations adopting them, namely: MDM and identity resolution. More than ever, organizations need trusted data, in support of regulatory reporting, compliance, business intelligence, analytics, operational excellence, and other data-driven requirements. MDM and identity resolution are key enablers for these requirements, so it’s no surprise that two leading vendors have chosen to acquire these at this time.”
“Serrao says that in the time he has spent in a dozen different fusion centers in the United States — coupled with his own background in law enforcement — he’s gleaned several ‘best practices’ for consideration. Ideally, he says, leadership should ’set a specific strategic mission before the center is even built. Everything else follows. Determine the role of the center and whether strategic intelligence analysis will be part of the mix. Then, it will be easier to define what processes will be developed, what reporting mechanisms are needed, what technology is appropriate, and what types of personnel are needed.’”
“The state of Kansas has been conducting sting operations to prevent this kind of theft by lottery terminal clerks. Law enforcement agents fanned out across the state and presented ‘winning’ tickets at several retail lottery outlets. In five separate cases clerks told the agents the tickets were worthless and then tried to redeem the ‘winning’ lottery tickets. The undercover investigation led to charges of attempted theft and computer crime against five people across the state.”
By John Talburt, PhD, CDMP, Director, UALR Laboratory for Advanced Research in Entity Resolution and Information Quality (ERIQ)
In the last post we looked at a formal model for describing entity-based integration. Now let’s turn our attention to how entity resolution (ER) systems are actually implemented. One of the most important design decisions is whether the system will perform entity identity management. Systems perform identity management when they create and store the attributes values for the identities that they process. Identity management is necessary for systems that assign persistent entity identifiers, i.e. the system must give all of the references to the same entity the same identifier value from one resolution process to the next.
The most basic form of ER is the merge/purge process. A merge/purge process reads a large batch of references and systematically makes pair-wise comparisons between them. During the process, it assigns a group identifier to all of the references it determines to be for the same entity. However, these identifiers are transient, only existing during the process of a particular batch of references since the end result is to create a single, merged record (called a “survivor” record) in place of each reference group. The result is that references to the same entity occurring in two different merge/purge processes will likely be given different group identifiers from one process to the next. For example, the references for John Doe in the first batch of references processed might given the group ID of 213, but references to the same John Doe in a batch of references processed the next day might be given a group ID of 634. The merge/purge process can still correctly resolve the entity references in each batch, but the values of the group IDs don’t persist or carry over for the same entities from batch to batch.
Another characteristic of the merge/purge ER process is that it is designed to operate in batch mode. However, there are transactional or “on-demand” versions of merge/purge that are sometimes referred to as heterogeneous database join systems. Instead of combining all of the reference sources into a single file for batch processing, each reference source is loaded as a database table. The application is connected to all of the source tables and has metadata that describes the structure of each reference source. This allows a single query or “join request” to be submitted to the application, which then translates the request into an appropriate query for each source. The individual query responses are collected and processed into a single view that is provided as the query result for the initial query. Just as in the merge/purge process, the groups of references brought together for an entity (a query) are transient. These types of query-based ER systems are common in law enforcement and other hypothesis testing applications.
On the other hand, there are other ER architectures designed to retain and manage entity identity information. By doing this they are able to “recognize” references to the same entity over time and assigned those references the same entity identifier, i.e. maintain persistent entity identifiers. In CRM applications these kinds of systems are sometimes called Customer Recognition Systems.
There are two major types of ER system architectures that perform identity management - “identity resolution” systems and “identity capture” systems. In the next post, I will pick up here with a discussion of how these systems manage identity and maintain persistent entity identifiers.
“MDM now creates another competitive front for Informatica against rivals and complicates some partial relationships - notably Oracle, which includes Informatica’s identity resolution software as part of its Siebel Universal Customer Master (UCM) MDM engine, as well as some parts of its data quality software. Informatica also has OEM relationships with IBM and DataFlux for address cleansing that might need revisiting.”
“Being acquired by a large player such as IBM also raises the question of whether Initiate will be able to unfold its potential under the large IBM umbrella, or whether it will wither and sink into oblivion alongside the multitude of applications in IBM’s broad portfolio. This will be a test of how well IBM integrates small but high-performing companies.”
“Electronic health records, or ‘EHRs,’ are the future of medical record keeping. The American Recovery and Reinvestment Act, or “ARRA,” includes incentive payments for hospitals that adopt an EHR, but the timetable for implementation is tight. To qualify for the full payment, hospitals will require proving ‘meaningful use’ by October 2012.”
“Workers’ comp fraud indicators… Frequent additions and cancellations of coverage, especially if several business entities appear to be owned or controlled by the same person or group”
“IBM announced today that it plans to buy MDM vendor Initiate Systems. As hypothesized here in this blog last week, the move was not entirely unexpected, but on the heels of last week’s announcement by Informatica to purchase Siperian, it certainly creates yet another wave in the marketplace. More moves are certain to take place as competing companies align – and realign – their Single Entity View (SEV) strategies. The key to this realignment will be for current industry players to maximize their functionality beyond ‘playing with matches’. That dated view of fuzzy matching is no longer enough. Not for the large data quality vendors. Certainly not for the customer.”
“Noting that Initiate’s product is spefically designed to handle only certain types of data—customer data and product data—Kalido CEO Hewitt says, ‘Where they have struggled is in mastering multiple domains, even though they advertise their products as such. The problem is that as you add domains, the complexity of the data relationships expands exponentially. So one domain might have 100 relationships, two domains 300 relationships, 10 domains 3,000 relationships. So when one master data element changes, hundreds of relationships could change, which requires a governance process to manage it.’”
“Watson called up a contact at the El Paso Intelligence Center (EPIC), a fusion center that combines intelligence from federal law enforcement and state and military sources. Watson also called a friend at U.S. Immigration and Customs Enforcement and asked him to prepare a ’serious incident report.’ ICE mobilized an officer specializing in human trafficking within minutes, Watson said.”
“But the general upheaval in MDM aside, the IBM deal is interesting in another way. IBM has downplayed this as an MDM acquisition, positioning it more as buying into two verticals, health care and a government. Gartner’s Andrew White writes that at one point during the briefing, IBM was asked what the Initiate acquisition meant for MDM. IBM responded it reflects a ‘verticalization of MDM.’ White writes that’s good news for health care customers, but ‘troubling for IBM MDM product strategy.’”
Infoglide Software provides entity resolution and analysis solutions for retail, banking, insurance, government, and law enforcement. Without the need for data cleansing or warehousing, Infoglide Software's Identity Resolution Engine™ (IRE) analyzes all of the information relating to individuals and/or entities from multiple sources of data and then applies...
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