How To Become a Fraud Analyst
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Fraud analysts are in high demand right now. In fact, vacancies for fraud analysts have an average growth of 4.84% per year. Fraud analysts must have a specific skill set, relevant education, and technical knowledge.
There are many routes to becoming a fraud analyst, but all require mastering certain skills and technical knowledge. Here is a comprehensive guide with 3 steps to help you become a fraud analyst—including key skills, job roles, and responsibilities.
How To Become a Fraud Analyst in 3 Steps
Get a degree
Gaining hands-on work experience
Obtain useful certifications
Becoming a certified fraud examiner requires hard work, but it’s worth it. There are four main steps you can take toward getting your dream job in this profession.
1. Get a degree
The education requirements to become an entry-level fraud analyst aren’t too demanding. You’ll typically only need a high-school diploma or equivalent education. Only 43.4% of fraud analysts hold a bachelor’s degree. However, since you’ll be ensuring the safety of people’s assets during transactions and monitoring fraudulent activity, most employers prefer that you have a bachelor’s degree in a related field before they hire you, according to the U.S. Bureau of Labor Statistics (BLS).
As you consider how to become a fraud analyst through pursuing higher education, make sure your coursework and qualifications are focused on:
- Accounting and auditing
- Criminology and sociology
- Fraud investigation
- Data Analytics
- Data engineering
- Business administration
- Loss prevention
Depending on the industry you’re working in, you could also take advantage of vocational schools and community college programs. For example, if you’re interested in working with auto-damage appraisal, you could find an autobody repair degree program to learn how to estimate the costs of repairing a damaged vehicle.
The BLS states that some insurance companies might even hire people who have previously worked in criminal justice as private investigators or law enforcement officers because of their interviewing and interrogation skills.
2. Gaining hands-on work experience
As mentioned above, earning relevant work experience could also help you get your desired position. Finding an internship or entry-level job will give you the skills potential employers are looking for. Most entry-level fraud analysts work under the supervision of employees with more seniority and progress from small claims to more complex ones as they learn about investigation and settlement. In certain circumstances, a fraud analyst may be required to collaborate with data analysts in order to reduce the risk of all potential fraud. Fraud analysts can grow to become:
- Financial analysts
- Risk analysts
- Finance managers
Gaining professional experience as a fraud investigator is a process that requires patience. But the experience you earn as an entry-level fraud analyst will give you the foundation to move on to higher-ranking positions.
To land a job as a fraud analyst, you could benefit from having a background in:
- Computer science
- Programming languages (like SQL)
3. Obtain useful certifications
According to the National Insurance Producer Registry, some states expect their fraud analysts to be licensed before they can start working. While some states have minimal requirements, others ask candidates to complete prelicensing education and receive a certain score on their licensing exam. A few states offer a waiver for fraud prevention professionals and let them work under their employer’s license.
Keep in mind that some territories within the U.S. also require proof of continuing education credits before fraud analysts and claims adjusters can renew their licenses each year. To meet this requirement, you can attend workshops, lectures, and courses in your area of expertise. For example, if you work for a life and health insurance company, you must earn credits to keep up with medical procedures, prescription drugs, and other related topics.
You can also earn other types of relevant credentials. To become certified by the Association of Certified Fraud Examiners, you’ll need to have at least two years of relevant work experience and pass the Certified Fraud Examiner Exam. Or, you can bypass the CFE Exam if your education qualifies to take its place. The CFE Exam consists of four sections:
- Financial transactions and fraud schemes
- Investigation and fraud prevention
Required Fraud Analyst Skills
Fraud analysts are often ambitious individuals with an adventurous mindset. To be a good fraud examiner, you must have strong interpersonal skills as well as persuasion and negotiation abilities. Some other important skills to have as a fraud risk analyst are:
1. Communication skills
On the job, you’ll be getting tons of information from claimants, witnesses, medical experts, and others involved in a claim. Effectively asking questions and efficiently gathering information will help you to be a successful fraud analyst.
2. Analytical skills
Once you’ve collected the necessary information, you’ll have to determine the type of investigation you’ll need to perform. Your analytical skills are vital to identifying potential fraud risks and deciding what steps the company must take.
3. Attention to detail
As a fraud and risk analyst, you’ll have to review numerous documents. Even the tiniest details can have massive financial consequences when overlooked or misinterpreted. That’s why you must be detail-oriented and organized when performing risk analysis.
Fraud analysts need to assess the costs and benefits of the actions their clients must take. Having good judgment and decision-making skills will help you select the best available options.
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Fraud Analyst Salary
The job of a fraud analyst is crucial to a lot of industries. That’s why the services of these professionals are in high demand, and the salaries remain competitive in the U.S. market. According to Career Explorer, the median annual salary for fraud examiners is roughly $70,280, but it can range from $38,030 to $123,360 depending on geographical location, level of expertise, employer, and other factors.
The average fraud analyst wages depending on seniority are:
- Top-level: $123,360
- Senior-level: $94,580
- Mid-level: $70,280
- Junior-level: $51,100
- Entry-level: $38,030
Fraud Analyst Job Description
Fraud analysts investigate theft and fraud within transactions on behalf of a company or a financial institution. They also perform surveillance and risk management services for their customers and monitor the most recent fraud trends to stay on top of any suspicious or high-risk activity that could jeopardize their client’s assets.
Credit card fraud prevention analysts, for example, know that most customers have established banking patterns they rarely change. Recognizing their clients’ regular activity helps them identify if there are any red flags that could indicate fraud. When suspicious transactions occur, the examiner will take the pertinent steps to ensure the account is safe.
Fraud and risk analysts have the obligation of keeping all information they collect safe and confidential to prevent further criminal activity. They must also keep models and databases for evaluating fraud risks to identify holes in security and suggest improvements. Fraud analysis is, therefore, an important and necessary occupation to keep risk-prone interactions running safely and smoothly.
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