By PETER GRIFFIN
The country's largest retailers are beginning trials of cutting-edge software in a bid to stem multimillion-dollar losses resulting from employee fraud.
The Warehouse and Farmers are among four retail chains that have signed up for trials of NetMap, Australian-made software that is being used by everyone from the
FBI to track criminals, to US insurance companies trying to weed out bogus claims.
The software will be sold in New Zealand by GDC Communications on an application service provider (ASP) model.
It works by detecting "exceptions" in data tapped from store cash registers - patterns that emerge from the mass of processed data and point to fraudulent behaviour.
The head of GDC's iVASP software division, Francis Wynne, said NetMap had tried to enter the New Zealand market a few years ago, but high set-up costs of more than US$500,000 ($909,000) had deterred retailers. Under the ASP model, retailers pay GDC a set monthly fee.
Wynne said the information taken from cash registers was sent to databases housed on servers at GDC's headquarters where it was analysed.
The company has built up a team of seven fraud-detection experts in Auckland and is developing a national retail-fraud register that will blacklist employees busted for theft.
NetMap, the creation of Australian scientist Dr David Holloway, has won recognition for its use in catching backpacker murderer Ivan Milat and Macquarie Bank inside-trader Simon Hannes.
But retail fraud detection is one of the more recent uses for the software. Australian chain store David Jones claims to have saved A$9 million ($9.7 million) in one year and taken action against 200 staff.
The New Zealand Retailers Association estimates the industry loses between $1 million and $2 million a day to shoplifting and fraud. Over a third of that is attributed to employee theft.
New Zealand companies have been sceptical about the effectiveness of fraud-detecting software.
Major software vendor SAS Institute is active in the New Zealand market but this sort of business, which Wynne described as "a science rather than a technology", is in its early stages here.
NetMap
GDC Communications
