How to become a fraud analyst

Fraud analysts are financial professionals who find, prevent, and investigate fraudulent activities within an organization. They help protect an organization's financial reputation and integrity from the potential damages resulting from these activities. Becoming a fraud analyst requires education, experience, and continued learning.

Discover what a fraud analyst does and the steps you need to take to become one.

What does a fraud analyst do?

Fraud analysts find, prevent, and investigate fraudulent activities within a financial institution or business. They use data analysis to examine large volumes of data and evaluate patterns, transactions, and behaviors to discover questionable activities that could suggest fraud. These include unauthorized access, identity theft, credit card fraud, and insider threats.

Fraud analysts work across many industries, such as insurance, banking, and e-commerce. Duties of a fraud analyst may include:

• Analyzing large quantities of data — often through data modeling, statistical analysis, and machine learning — to find patterns, trends, and irregularities that could point to fraudulent activities
• Monitoring online and offline transactions continuously to determine signs of questionable activity and flagging transactions that diverge from established patterns
• Investigating incidents when potential fraud is detected by gathering evidence, interviewing those involved, and working with law enforcement, if necessary
• Reporting and documenting their findings, investigations, and actions taken — while adhering to legal and regulatory compliance

Steps to become a fraud analyst

To become a fraud analyst, you must obtain the necessary education, experience, and skills and build a professional network. Fraud analysts continuously learn by staying up to date on the latest changes in regulations, laws, policies, and topics related to data security.

These common steps can help you to become a fraud analyst:

Step 1: Gain relevant education

Most entry-level fraud analyst positions require a bachelor's degree in finance, criminal justice, accounting, or a related discipline. You may take courses in law, forensic accounting, statistics, data analytics, and information technology (IT). You may also take specialized classes in cybersecurity and fraud detection.

Step 2: Develop analytical and technical skills

Technical and analytical skills are vital to a fraud analyst's success. Become familiar with computer programs and systems like Microsoft Excel, SAS, and SQL; learn to use data analysis tools; and improve your knowledge of risk management, anti-fraud controls, and digital forensics.

Attention to detail, problem-solving skills, and communication abilities are important competencies for fraud analysts.

Step 3: Gain practical experience, such as in fraud detection

Internships and entry-level jobs in auditing, banking, compliance, insurance, financial services, and risk management can help to build your practical experience. Become involved in projects or simulations that include investigative research, data analysis, and anti-fraud tactics and techniques.

Professional experience is essential to becoming a fraud analyst.

Step 4: Build your professional network, consider certifications, and create a portfolio

Creating a professional network is critical to a fraud analyst's success. Engage with other experienced fraud analysts in social media networks and online forums. Consider joining a professional association such as the Association of Certified Fraud Examiners (ACFE).

You may also opt to pursue certification as a Certified Fraud Examiner (CFE) through the ACFE. Other certifications that are optional but can help expand you your professional network and gain a competitive edge are Certified Anti-Money Laundering Specialist (CAMS) of the Association of Certified Anti-Money Laundering Specialists (ACAMS) and Certified Financial Crime Specialist (CFCS) of the Association of Certified Financial Crime Specialists (ACFCS).

Start a portfolio to showcase your analytical work and skills as you build your professional network. This should include reports and investigations that you have conducted and their outcomes.

Step 5: Continue learning and refining your skills

Fraud is continuously changing as new methods and techniques are used, so fraud analysts must remain informed about the latest trends in cybersecurity, fraud, and regulatory changes.

You can remain updated on the most recent developments in the field by taking continuing education classes, attending industry seminars, being active in your professional networks, and subscribing to industry publications.

Get started on edX

Find courses on edX that can help you stay up to date on the latest techniques, technologies, and trends in the fraud detection field. Completing online courses in digital forensics, data analysis, and cybersecurity can help give you a competitive edge.