Australian Superannuation at risk | SAS India

With over $ 2tn available – fraudsters and hackers are circling

By Dominic Frost

The Australian Superannuation industry is globally recognized as a success, and its large size (Australians have over $ 2 trillion dollars in superannuation assets as of June 2015) releases to the world the underlying future provisions that citizens are retiring.

In parallel with this, the Superannuation market is becoming more and more competitive and Australians have the opportunity to select and switch Superannuation providers quickly and easily. This has created more choices and ultimately improved the overall industry for customers.

In the digital age, customers are asking for better access to their accounts and information and the opportunity to shop online. Although Superannuation will never be a transaction account, there are moves in the industry to introduce more automated and straightforward processing in the short and medium term.

However, this flexibility and openness comes at a cost. And that price is risk.

Scammers are looking at the “premium” for Superannuation – the average male balance is just over $ 100,000 – and that’s a big prize. It is worth investing time and effort into it!

They simply cannot ignore it.

Currently, it is difficult to get money from Superannuation, Life and TPD (Total and Permanent Disability) products. There is a lot of paperwork and processes to complete. However, this is changing.

The biggest risks of Superannuation come from:

  • Online fraud – taking over accounts and then falsifying an “exit” or “payment” event (such as a payout or transfer to another compromised account).
  • Insider fraud – employee assistance for by-pass processes and control to extract or redirect funds.
  • Informed third-party fraud – a relative, broker or adviser who knows enough about the account holder to act as an account holder through interaction channels (telephone, email, etc.) as a means of identity theft

While internal processes and procedures can protect, they can still be bypassed. Revisions and studies only see the problem when the money has gone.

However, in almost all usual Superannuation fraud profiles, there were significant early warning signals – employees accessing dormant accounts followed by a transfer or unsuccessful login to online accounts then turn an electronic payment into a postal check.

The early warning signals are there as long as you check for them.

The good news is the combination of big data, predictable behavioral analysis and machine learning can provide fraud protection for Superannuation providers and their customers.

With the Superannuation industry developing and embracing both digital channels and straightforward processing – the risk profile has risen, so protection is needed too. It will not be long before the more progressive organizations announce their opportunities to detect fraud and fraud prevention – just like the banks and card providers.

SAS Australia and New Zealand have a specialist team that advises and protects organizations on the risks of fraud and financial crime – with detailed knowledge of the risks to Super Providers and Administrators.

Author bio: Dominic Frost works for SAS in Australia, which has a specialist team dedicated to fraud and crime prevention and detection.

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