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The game has changed since the onset of the financial crisis. Governments aiming to reduce budget deficits can only deliver so much through spending cuts. It is now even more vital that tax agencies ensure individuals and businesses pay the tax they owe, and that welfare fraud and error are minimised. Pretty will explain how he helps tax and welfare agencies tackle noncompliance, evasion and error. He will share client stories where billions of euros were saved, generating a return of at least 25 times the original investment. By Ian Pretty, Vice President, Global Tax & Welfare Leader
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Protect Your Revenue Streams Big Data & Analytics in Tax
Ian Pretty
Vice President, Global Tax & Welfare Leader
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AREAS TO BE COVERED TODAY
The challenges facing Tax Agencies
Evasion, Fraud & Error: Our Point of View
Evasion, Fraud & Error: Our Approach
Case study: HMRC Connect
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But first a short animation on Capgemini’s solution
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growing fiscal deficits
new & more data new compliance strategies
growing demand for public services
Why does Fraud Management matter today?
growing use of digital
shorter reaction times industrialization of Fraud
new modelling tools & techniques internal Fraud
growing complexity
identity theft
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What Governments are saying about Evasion, Fraud & Error
Selected examples
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We believe that the answer rests in bringing Big Data and Analytics into a Digital Framework
ITERATIVE TRANSFORMATION ROADMAP
DIG
ITA
L EN
GA
GEM
ENT D
IGITA
L GO
VER
NA
NC
E
TRANSFORMATIVE DIGITAL VISION & OUTCOMES
DIGITAL BUILDING BLOCKS
Customer Insight
E Operational Process E
New Business Model
Customer understanding
Customer touch points
Improved compliance
Worker enablement
Performance management
Process digitisation
Global collaboration
New outsourcing/ partner models
Digitally modified business
Digital Capabilities
TAX INVESTIGATORS
CHANNELS
TAX POLICY
PROCESS INNOVATION
CUSTOMER KNOWLEDGE
CULTURE
PARTNERSHIP NETWORK
BRAND
STRATEGIC ASSETS
DIGITAL INVESTMENT
SKILLS INITIATIVES
TRANSFORMATIVE DIGITAL VISION
Source: Capgemini Consulting-MIT Analysis – Digital Transformation: A roadmap for billion-dollar organisations (c) 2011
Using cross-government & third party data sources
Digital by default – intervention by exception
Mobile access to data & tools
Near real time dashboards
Use of new analytical capabilities & tools
Real time identify verification and data
validation
Bilateral and multilateral exchange of data
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Customer Insight: Compliance Strategies need to understand customer behaviours so that Evasion and Fraud processes respond effective to those behaviours
Compliant Make it simple to get tax right
Value at risk
Ris
k o
f n
on
-co
mp
lian
ce
Low
Low
High
Casual avoiders Risk based campaigns to recover
and deter
High
Deliberate evaders
Full enquiries to recover & deter
Criminals Investigate & prosecute or disrupt
Large Businesses &
HNWI Relationship based monitoring to
protect
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Operational process: And this means a new enterprise tax compliance model based on upstream near real-time risking, analytics & intervention
Information
Management
Business
Intelligence Investigation
Channel
Management
Operational
Management
Common Capabilities
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New Business Model: how do tax agencies embed wider collaboration & data exchange into their business as usual?
Fraud Prevention
Analytics
From doing everything… …to doing some things?
Fraud Prevention
Core
Compliance
capability
Analytics
As a
Service?
As a
Managed
Service?
Core
Compliance
capability
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Our approach: taking it step by step to develop the full capability set
Pilot Phase (6m)
High latency
Single tax
Regime or
segment
Phase 1 Release
(6-12m)
Build core
capability – DWH,
social network
analysis, anomaly
detection, case
management
Phase 2 Release
(6-12 m)
Reduce latency
More data sources,
storage etc
Improved models
Phase 3 Release (12m)
Upstream predictive
analytics
Ability to work with
unstructured data
Text mining
Sentiment analysis
Bene
fit
Investment & time
Increasing capability
Learn the new tools
Develop new rules
Test levels of fraud
Strengthen b-case
New teams established
Automated bulk risking
Trialling campaigns
Initial case mgt system
Extended risk rules
60%+ cases come from
risk engine
Campaign driven
Feedback governance
Restructured risk unit
Upstream check
process in place
80%+ cases from
risk engine
Illustrative road map
Value discovery &
operating model
Shared
Vision &
Strategy
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Each client has a different starting point
Client Situation Client Concerns Method
I need to do something Requirement identified but
there is no clearly articulated vision or high level design
Value Discovery
I have a Vision Vision and High Level design
exist – unsure of where to start and in what order
Target Operating Model and detailed Roadmap
Am I on the right track? Concerns remain about
clarity and progress Business Assurance
Show me it works Will it work at all and if so will
it be scalable Proof of Concept / Pilot
I get it. When can we start? Desire to start to build initial
components quickly Design & Build Fraud
Management System
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Case Study: HMRC’s Risking tool - Connect
• Capgemini supported UK Tax Agency (HMRC) to design,
build and deploy their strategic risking tool - Connect
• Takes information from 30 different data sources
• Cross-matches one billion internal and third party data
items
• Uncover hidden relationships across organisations,
customers and their associated data links (bank interest,
lifestyle indicators and stated tax liability)
• Connect analytical and ‘spider diagram’ visualisation tools
• HMRC analysts produce target profiles and models to risk
assess transactions and generate campaigns and cases
for investigation.
• Automated feeds into HMRC’s case management system
In total HMRC has recovered £1.4bn additional tax yield
to date, through the use of Connect
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Case study – State of Maharashtra project in progress
Capgemini has been selected in 2012 by the
Maharashtra Sales Tax Department (MSTD) in India to
implement a Business Intelligence and Data
Warehouse solution
Solution will enable MSTD to:
• analyze economic parameters to set targets for revenue
collection
• help the department to expand its existing taxpayer base
• prevent revenue loss through tax evasion
• provide decision support across divisions of the MSTD
These initiatives will result in significant optimization
of resources, time and effort, thus bringing in
considerable business benefits to the department.
Our industry experience from HMRC and strategic
partnership with SAS was key for winning this
project
SAS
Enterprise Business Intelligence
Planned
Internal Sources
Current Internal Sources
File Landing
area
Enterprise Data
Warehouse
Staging Area
SAS Enterprise Data Integration, SAS Data QualityData Sources
eAnnexure
Border Check Post
MAHAVIKAS
MAHAVAT
External Sources of Data
Analytical Reporting•Dealer Profiles
•Risk ratingDashboards•MIS
•Metric Track
Web based Reporting•Advisory Visits
•Audit Findings
Ad-hoc Analysis•Dealer Category Trend Analysis
Performance Management•Score Carding
Native Connectivity Integrated Data Quality Data Transformation
Sybase IQ
AMO Outlook Integration
Project Governance –Standard BI Processes and Methodologies
Application Security
Integrated Metadata Management
Data
Analytical and
Reporting Data Marts
•Multi dimensional marts for
Reports and Analytics
•Data Mining Models
•Forecasting
E miner + ETS
HP DL 380 G7 4 Core, 40 GB
RAM
HP DL 180 G64 Core, 16 GB
RAM
Load Balancer
Rack 1 Rack 2
Non Production Deployment
Production Deployment
Linux Cluster Suite
SAN – 27 TB
(Data
Warehouse)16 TB (Clone for BackUp)
HP EVA 6400 Storage Array
HP MSL 8096 Tape Library, 4xLTO5FC tape
drives
Backup ServerDL 380 G7
4 Core, 32 GB RAM
DMZ
Internal Firewall
Internal Firewall
External Firewall
App Tier
DB Tier
Web Application Services Node 2
HP DL 380 G74 Core, 32 GB RAM
Web Application Services Node 1
HP DL 380 G74 Core, 32 GB RAM
Web Server
Farm
SAS Compute Server 1
HP DL 580 G7 12 Core, 96
GB RAM
HP DL 380 G7 6 Core 48 GB
RAM
SAS Compute Server 2
SAS Modeling
ServerHP DL 380 G7 12 Core 96 GB
RAM
HA Node
HP DL 380 G7 4 Core, 32 GB
RAM
Sybase IQ Writer Server
HP DL 580 G7 28 Core, 224 GB
RAM
Sybase IQ Reader Server
HP DL 380 G7 12 Core, 128 GB
RAM
HA Node
SAN Switch SAN Switch
App Tier
Linux Cluster Suite
HP DL 180 G62 Core, 16 GB
RAM
Sybase IQ –Dev & Test
Sybase ASE-SBE Non Prod
HP DL 180 G64 Core, 16 GB
RAM
Sybase ASE-SBE
Prod
Infrastructure Servers
FC Network
EMS ServerDL 180 G6
2 Core, 8GB RAM
SMS GatewayHP DL 180 G6, 4 Core
HP DL 180 G62 Core, 16 GB
RAM
SAS Dev & Test
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Our capabilities
Strategic global partnership with SAS on Fraud management solutions
BIM Centre of Excellence in India
Business & Solution Architects
Local footprint
Delivery capability
Proven success stories in UK, Netherlands and in the Financial Services Sector
£1.3bn additional tax yield to date for HM Revenue & Customs
Proven value
No. 1 system integrator in Tax & Welfare globally
Understanding of the Tax business process
Compliance Framework
End to End solution
World’s foremost provider of Business Information Management (BIM) services
Domain expertise
Register/Change of
Details
ProcessApplication
/Return
EstablishLiability/Benefit
ManagePayments
In/outReconcile
Investigation/Audit/
Enforcement
ReceiveCustomer
Submission
Enforcement/Debt
collection/criminal
proceedings
Prevent Protect Uncover Resolve
Feedback
Prove
An integrated approach takes a holistic approach on which to base a business strategy that develops and deploys common
capabilities actively managed to deliver the best business outcome.
Prevent transmission of incorrect information – either error or fraud
Protect against incorrect /repayments/repayments through the identification and management of risks
Identify that fraudulent or non-compliant activity has taken place
Provide evidence to prove the case so that the authority can take remedial action
Successful resolution through recovering the monies or securing criminal prosecution
Infrastructure
Data Sources
Data Preparation
Data Linking/Networking Creation
Analytical Environment
Network Visualisation
Risk Model Management
Analytical Capability
Execution Ability
Investigative Capability
Case ManagementEnterprise
Compliance
Capabilities
SAS CoE
Dedicated lab for all
SAS products
High performance
servers installed
Hands on experience for
building proof of concepts
Build better
knowledge infrastructure to
share and learn SAS
Premium
partnership
agreement with SAS
Report generation
& delivery
Predictive models,
scorecards,
segmentation, decision
trees, web analytics
Forecasting
optimization,
social media,
solutions
Value Proposition
Skills
Analytical
consultants
Business analysts
Statisticians
Tools experts
BI architects
Data architects
MDM experts
Change experts
Quality experts
Process leads
Domains
Analytics Maturity Assessment
Specialized skill pool
Cloud based offering
Analytics CoE to support the known requirements
of today and the
unanticipated needs of
the future
Easy to use and relevant scorecards and reports
that enable greater
visibility into operating
and financial metrics
Ad-hoc sales, marketing and functional reporting
for a streamlined,
integrated and automated
operation
Solution
Social Media Analytics
Marketing Campaign Analytics
Big Data AnalyticsK
no
wle
dg
e In
ten
siv
e Re
so
urc
e In
ten
siv
e
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The information contained in this presentation is proprietary.
© 2013 Capgemini. All rights reserved.
Rightshore® is a trademark belonging to Capgemini.
www.capgemini.com
About Capgemini
With more than 120,000 people in 40 countries, Capgemini is one
of the world's foremost providers of consulting, technology and
outsourcing services. The Group reported 2011 global revenues
of EUR 9.7 billion.
Together with its clients, Capgemini creates and delivers
business and technology solutions that fit their needs and drive
the results they want. A deeply multicultural organization,
Capgemini has developed its own way of working, the
Collaborative Business Experience™, and draws on Rightshore®,
its worldwide delivery model.
