Fighting Fraud with Focus Lists

The role of focus lists

Focus lists serve as an automated early warning system for Client Managers, highlighting potential areas of concern within their client portfolios. While they can detect unusual behaviours, it's important to remember that focus lists are not a substitute for the extensive knowledge and expertise that client managers possess. Rather, they act as a tool to complement their insights by leveraging numerical data and movements.

Focus lists can be established at a global or personal level. Global focus lists have parameters that apply to all clients and can only be modified by admin users. It is recommended to set up a company-wide set of global focus list parameters. Additionally, personal focus lists can be created by individual managers to address specific client needs or unique situations.

Common focus list criteria

• Cash - This focus list flags clients who have not received any cash for a period of 14 days. It serves as a simple but effective measure to identify potential liquidity issues.
• Overpaid - This focus list triggers when a client's facility becomes overpaid by more than £5,000. It helps prevent excessive overpayments and prompts necessary actions.
• Sales Ledger Movement - This focus list detects significant increases or decreases (at least 30%) in sales activity. It allows managers to identify potential fraudulent activities or genuine changes in business performance that may require attention.
• Commitment Recovery / FIU Recovery - By comparing cash received in the last 30 days to the commitment as of today, this focus list helps identify changes in cash collections. It enables managers to monitor if sales increases are accompanied by corresponding cash inflows.
• High Dilution - This focus list looks for instances where the ledger shows more than 10% dilution over a 30-day period. It can highlight potential issues with funded debt, illegitimate sales, or unsatisfied end customers, prompting further investigation.
• No Dilution in 30 Days -  This focus list triggers when there has been no dilution posted to the ledger within a 30-day period. While it may be normal for some clients, it can also indicate unusual activity or a deliberate avoidance of posting credit notes.
• High Risk -  This focus list combines the EQRF Risk Score (normalized) and commitment recovery. Clients with a risk score above 65 and commitment recovery under 45% are flagged as high risk. This focus list helps prioritize attention to clients with potential financial difficulties

Managing focus lists

Focus lists appear on the manager's dashboard, providing an overview of clients meeting specific criteria. From here users can analyse historical data, view charts, and evaluate the client's risk profile. Additionally, managers have the option to suppress focus list entries temporarily to focus on immediate concerns. Suppressed items may reappear if the criteria continue to be breached after the suppression period.

Focus lists are valuable tools in the realm of financial risk management, assisting client managers in identifying potential risks and anomalies promptly. By leveraging system-generated alerts based on predefined criteria, managers can prioritize their time and attention on the highest-risk clients at the right time. It is important to remember that focus lists should be used in conjunction with client knowledge and expertise to make informed decisions