India to set up data mining unit to fight fraud

Country's Corporate Affairs Ministry is creating a new intelligence unit to improve early detection of fraud and provide assistance to other investigations where needed.
Written by Jamie Yap, Contributor

India's Corporate Affairs Ministry is setting up a new intelligence unit to carry out data mining that will help detection and investigation of fraud.

In a Press Trust of India (PTI) report last Saturday, Indian Corporate Affairs Minister Sachin Pilot said the number of financial fraud cases in the country is increasing and by mining data from all possible sources, company wrongdoings can be detected at the earliest possible stage.

The unit is currently at a nascent stage and will comprise technical people with experience and expertise to mine data, Pilot said. "The idea is to have a set of people to do the data mining, collection and checking of records that is available on various platforms, and then link them with the inputs from investigating agencies."

The information needed to detect possible corporate fraud at an early stage is generally available on various platforms, and what is actually needed is "the sense to mine it", the minister pointed out.

"For any financial fraud, you need to have companies registered, institutions, bank accounts, statements, filing and reporting... Investigating agencies have to find the links and they need to talk to each other," Pilot noted. "Unless agencies talk to each other, you cannot have a smart, proactive machinery to stop things before they go wrong."

In addition, the new division will seek help from various agencies to detect possible frauds as well as provide information to others in their investgations, he added.

Investigations in past corporate frauds, such as the Satyam accounting scandal in 2009, have showed that many such incidents could have been detected at an earlier stage with a stronger oversight mechanism, the report stated.

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