Why We Need a Leakage Susceptibility Model

A question posed to me is how I came to develop the leakage susceptibility model.

To answer this, I have to go back to the beginning and ask myself what was my driving force and motivation to create it. Going back to basics it was to answer a problem statement I was trying to resolve. That is: why does leakage happen, and is there a good reason for it?

This leads to other questions, such as whether we can disrupt and influence the environment and the force in which leakage occurs. In doing so, can we define the common key factors impacting likelihood of leakage and in that way put together a strategy to reduce both the potential of occurrence (gross risk) and deliver the right counter measures to minimise the impact if it were to occur (thus reduce net risk)?

Simultaneously, can we drive a reduction in leakage risk to enable our organisation to also deliver more innovative products and services at greater speed and quality of delivery? If we can, we have the opportunity to become a strategic partner to the business that enhances growth and services for both the business and customer.

Ultimate success would be to stop and prevent leakage from happening in the first place enabling improved pace of delivery in innovative customer propositions. Now wouldn’t that be a perfect world!

In search of the answers I reflected on scientific and real world examples of theories that existed that could explain the relationship and outcome of relative forces interacting with each other in complex environments. That is when I focused on Einstein’s Theory of Relativity as an inspiration to explain more complex situations into a simple fundamental equation.

Hence with reference to E=MC2 I came up with L=CI3 for revenue leakage susceptibility.

Another key trigger was when I took over a Fraud Management function in 2007. That function incorporated fraud operations, fraud investigations, fraud analytics and intelligence. I was given full reign to make changes to how the function tackled fraud management with the remit not only to protect but to prevent. The mission was also to become a business partner rather than a blocker. The key question I had was, how different was the fraud function from the revenue assurance function? Where could we find commonality to drive innovative thinking for the benefit of both functions for the business and our customers?

As with many fraud functions at the time I found it to be a function of a self-fulfilling prophesy. The function would focus more on finding fraud than putting detection processes in place without truly thinking of why the fraud happened in the first place. This created a vicious cycle. The majority of time was spent protecting from fraud attacks as they were occurring without truly targeting the removal of the opportunity and motivation. Hence I was going back to my original problem statement that I was dealing with in Revenue Assurance.

So I reflected on the model developed for Revenue Assurance that had now been applied to various situations, driving down revenue leakage to minimal levels. Surprisingly it was easy to convert and apply to fraud management. In fact due to the nature of fraudsters’ operating models that impacted many companies, many industries and many country environments, I found that I could use the susceptibility model to delivery groundbreaking results. It was possible to protect my own organisation and customers from fraud attempts by breaking down the business model, opportunity and motive for the fraud attempt in the first instance.

In this case E=MC2 became F=CO2 for fraud leakage susceptibility.

Furthermore, by working together through industry forums to fight fraud, it was possible not only to protect my own organisation’s customers, it was possible to drive results across the whole country and protect the UK society on areas of susceptibility to fraud. This is where I was privileged to work in my role within the Telecoms UK Fraud Forum and the Communication Crime Strategy Group to engage with government agencies and international authorities for the benefit of our UK society with wider cross-country benefits.

Underlying to all this success was this magic formula that kept on working by applying the concept of the leakage susceptibility model and working with talented individuals to define and implement innovative solutions.

So I am openly sharing this model after many years of useful application so that others can benefit from utilising the concept to drive down the susceptibility to leakage in their own companies, industries and countries.

I am also looking for your feedback and responses to the model as with everything in this world, our collective knowledge and information is more powerful than the single mind.

In a paradox world of creativity and logic, there is an art in applying this conceptual model, but by no means is it rocket science.

Members of the Risk & Assurance Group are currently evaluating the BT Leakage Susceptibility Model (version 0.4) prior to its adoption in the RAG Library. They can obtain an evaluation copy by logging on to the members-only area of the RAG website.

Andreas Manolis
Andreas Manolis

Andreas is the Group Head of Strategy and Risk for BT Revenue Assurance. Prior to joining BT, Andreas was the Head of Revenue Assurance & Fraud at mobile operator EE.