What is the second proactive fraud detection approach?

The identification of analyzing data to find suspicious trends as the second proactive fraud detection approach highlights the significance of data analytics in fraud prevention. This method involves the use of sophisticated analytical techniques to examine large volumes of data for unusual patterns or anomalies that may indicate fraudulent activity.

By leveraging data analysis, organizations can proactively identify potential fraud before it escalates into a significant issue. This approach enables the detection of irregularities in transactions, employee behaviors, or other operating processes, allowing for immediate investigation and corrective actions. The effectiveness of this method lies in its ability to systematically sift through data to uncover concealed or previously undetected fraudulent activities, thus reinforcing the organization’s controls and creating a more secure operational environment.

This is distinct from the other options, which, while beneficial, serve different purposes in the overall strategy of fraud prevention and detection. Stricter hiring policies and background checks focus on pre-employment screening, while reducing employee hours is more about operational adjustments rather than a proactive detection strategy.