Cutting costs in fraud prevention? A bad idea!

The first weeks of 2026 have been very encouraging for us at ICO-LUX: not only are we expanding our new business and helping banks detect credit application and leasing fraud, but we have also further strengthened our market leadership in the private health insurance sector.

In recent years, the private health insurance industry has demonstrated that software-supported fraud prevention works and delivers a sustainable preventive effect—when the topic is taken seriously.

As a provider of highly specialised document forensics software for fraud detection, ICO.Fraud, we naturally advocate the use of such solutions. At the same time, however, it would be paradoxical to try to cut back on staff within fraud departments. Why?

Admittedly, the economic logic is understandable. Personnel and software costs for fraud investigation appear clearly in the accounts, whereas the damage caused by undetected fraud is difficult to quantify. But that is precisely the problem.

What appears on the one hand as a cost factor has, for organisations with a consistent verification strategy—combining highly skilled fraud teams with the right software as a supporting tool—proven to be one of the most effective levers in claims management. Automated document verification reduces manual workload in claims assessment by up to 70 per cent—and, when intelligently integrated into a broader digitalisation strategy, can improve detection rates by up to 90 per cent.

Insurers that adopted this approach early are now better equipped to deal with current waves of AI-manipulated documents and have long recognised the value of its preventive effects. After all, most fraudsters are repeat offenders.

Those who have not yet strategically optimised their fraud detection capabilities should do so by 2026 at the latest. Fraud methods are evolving rapidly—regardless of whether private health insurers, supplementary insurance providers, or lending banks keep pace.

The key question for decision-makers in the financial sector is therefore no longer whether to invest in better fraud detection—but whether they can afford to delay it any longer.

Image source: prompted by ICO-LUX, provided by Perplexity.io