The ideal method of deterrence is to audit each transaction, but clearly this is not quick, easy or inexpensive. Commonly companies employ random auditing to combat fraud. Random audits are easy, quick, and relatively inexpensive and certainly the fear of an audit can deter the potential fraud, but is the random audit likely to detect actual fraudulent use? Clearly, a random audit though easy, quick, and inexpensive is no more likely than chance to turn up misuse.

A better way to distribute the internal auditors is to audit only novel and rare transactions. This begs the question, how can a company quickly, easily, and inexpensively target the auditing process toward novel or rare transactions?

Answer - Automate the targeting using Adaptive Pattern Recognition.

Why Automate?
The commercial credit industry has established that their customers establish habitual patterns of use and that any substantial deviation from this pattern indicates the possibility of a stolen card or card information.

Procurement card users will logically develop the same habitual patterns, and because the procurement card system captures every transaction electronically, it makes sense that an automated fraud detection method would be feasible.

Automating the targeting process saves time by reducing the number of necessary audits. This reduced number of audits will maintain the same level of deterrence and take less time. Furthermore, if fraud is present, the targeted audits are likely to detect more fraud then random audits.