In 2022, there were an estimated 625 billion transactions done via major general-purpose card companies like Visa and Mastercard. With the global trend toward cashless transactions, there’s been a growing demand for skilled professionals trained in observing and flagging potentially fraudulent activity. These professionals are called fraud analysts.
Today, we’ll explore what is a fraud analyst, the required skills and education, and other essential information you’ll need to dive into the field.
Fraud analysts wear many hats in the industry, but most work towards a common goal: monitoring, flagging, and reducing fraudulent transactions. Detecting fraud involves a wide range of tasks, including:
Becoming a fraud analyst involves a solid educational foundation and relevant work experience. As a field, there’s no set path that you absolutely must follow to secure a role, but most fraud analysts have worked on or studied in areas like finance, criminal justice, and even accounting.
In addition to formal education, many fraud analysts acquire different training and certifications. For example, the Certified Fraud Examiner (CFE) demonstrates a high level of expertise in fraud detection and deterrence. Another common certification is the Certified Information Systems Auditor (CISA), which is especially helpful for those looking to specialize in analyzing and assessing information systems.
Fraud analytics, like any other data career, has plenty of opportunities, but the path will vary depending on your background. While entry-level positions are available, most roles in fraud analysis require several years of experience in a relevant domain like finance, accounting, or banking.
Once you have the necessary education and skills, start working on personal projects connected to fraud analysis. This will help you gain experience and build your portfolio. When you’re ready to apply for jobs, be sure to tailor your resume and cover letter to each position/industry. You can check our job board here for available positions.
Fraud analysts need strong technical and interpersonal skills to be successful in their careers. As a fraud analyst, you should be able to use data science techniques and have a keen eye for details to identify irregularities.
Here are some specific skills that are required for the role:
In addition to these skills, having experience with financial regulations and compliance and a strong attention to detail and accuracy can help you stand out.
Fraud analysis is a rapidly growing field with a wide range of career opportunities. The career trajectory for fraud analysts generally consists of three levels: entry-level, intermediate, and senior.
1) Entry-level or junior fraud analysts typically have a bachelor’s degree in accounting, finance, business administration, or other related areas. Some may also possess internship/work experience in the field. Junior fraud analysts work under the guidance of more senior analysts and are responsible for tasks like collecting data, conducting analysis, and preparing reports.
2) Intermediate fraud analysts usually have a few years of experience in fraud analytics. They may also have a master’s degree in a related field. At this level, their responsibilities include developing and implementing strategies for detecting fraudulent activities and investigating suspected cases of fraud.
3) Senior fraud analysts are at the highest level in the fraud analytics career ladder and usually possess at least five years of experience in the field. They may also have a professional certification, such as the CFE.
Senior fraud analysts are responsible for managing and overseeing fraud detection and prevention programs. They may also be involved in developing and implementing new fraud detection techniques.
Here are some steps you can take to kick-start your career in fraud analytics:
Once you have the necessary education and skills, start working on data science projects connected to fraud analysis. This will help you gain experience and build your portfolio. When you’re ready to apply for jobs, be sure to tailor your resume and cover letter to each position/industry. You can check our job board here for available positions.
There are various types of companies that hire fraud analysts, including banks, credit card companies, insurance and investment firms, retailers, government agencies, and non-profit organizations.
The average salary for a fraud analyst is $44,512 per year in the United States area. However, salaries vary depending on experience, location, and industry. For example, fraud analysts in finance tend to earn more.
Interview Query offers a wide range of questions to help you improve your skills as you prepare for your fraud analyst Interview. Here are some of the topics that you might encounter:
Let’s say that you work at a bank that wants to implement a text messaging service that will text customers when the model detects a fraudulent transaction. The customer can then approve or deny the transaction with a text response.
How would we build this model?
Say you work at a major credit card company and are given a dataset of 600,000 credit card transactions. Use this dataset to build a fraud detection model.
Given a univariate dataset, how would you design a function to detect anomalies?
What if the data is bivariate?
Note: univariate means one variable, while bivariate means two variables.
There was a robbery from the ATM at the bank where you work. Some unauthorized withdrawals were made, and you need to help your bank find out more about those withdrawals.
However, the only information you have is that there was more than one withdrawal, they were all performed in 10-second gaps, and no legitimate transactions were performed in between two fraudulent withdrawals.
Write a query to retrieve all user IDs in ascending order whose transactions have exactly a 10-second gap from one another.
We’re given three tables representing a forum of users and their comments on posts. We want to figure out if users are creating multiple accounts to upvote their own comments.