Balancing fraud analytics with legal requirements: Governance practices and trade-offs in public administrations

Fraud analytics refers to the use of advanced analytics (data mining, big data analysis, or artificial intelligence) to detect fraud. While fraud analytics offers the promise of more efficiency in fighting fraud, it also raises legal challenges related to data protection and administrative law. Thes...

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Bibliographic Details
Published in:Data & Policy 2022-01, Vol.4, Article e14
Main Authors: Simonofski, Anthony, Tombal, Thomas, De Terwangne, Cécile, Willem, Pauline, Frenay, Benoît, Janssen, Marijn
Format: Article
Language:English
Subjects:
Administrative law
Artificial intelligence
Big Data
Case studies
Challenges
Complexity
Data analysis
Data integrity
Data mining
Ethical dilemmas
Fraud
fraud analytics
Governance
Intelligence
Mathematical analysis
Organizational change
Privacy
Public administration
Social security
Taxation
Tradeoffs
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Summary:Fraud analytics refers to the use of advanced analytics (data mining, big data analysis, or artificial intelligence) to detect fraud. While fraud analytics offers the promise of more efficiency in fighting fraud, it also raises legal challenges related to data protection and administrative law. These legal requirements are well documented but the concrete way in which public administrations have integrated them remains unexplored. Due to the complexity of the techniques applied, it is crucial to understand the current state of practice and the accompanying challenges to develop appropriate governance mechanisms. The use of advanced analytics in organizations without appropriate organizational change can lead to ethical challenges and privacy issues. The goal of this article is to examine how these legal requirements are addressed in public administrations and to identify the challenges that emerge in doing so. For this, we examined two case studies related to fraud analytics from the Belgian Federal administration: the detection of tax frauds and social security infringements. This article details 15 governance practices that have been used in administrations. Furthermore, it highlights the complexity of integrating legal requirements with advanced analytics by identifying six key trade-offs between fraud analytics opportunities and legal requirements.
ISSN:2632-3249
2632-3249
DOI:10.1017/dap.2022.6