SNEAK PEEK: Unveiled: Key Financial Crime 360 findings

These results highlight that financial crime, particularly fraud, must remain a top priority for the payments industry. APP and identity fraud challenges persist, and bad actors are continually deploying more sophisticated methods to dupe and exploit firms. Meanwhile, businesses are subject to an increasingly strict AML regulatory focus and a turbulent sanctions landscape. The newly appointed Labour Government will be expected to unveil clear plans about how the regulatory framework will be shaped going forward. This, in turn, will require firms to be agile and adaptive. In addition to keeping abreast of regulatory developments, firms will need to juggle proactive horizon scanning for new trends and risk typologies while exploring and embracing cutting-edge technologies like GenAI to bolster their risk management frameworks. They will also need to proactively collaborate to capitalise on cumulative knowledge and intelligence to prevent, detect and respond to financial crime.

This survey shows that financial crimes, including fraud, remain a key concern for financial institutions worldwide. Although many are planning to invest more in technical solutions, they know that criminal exploitation of technology means a constantly evolving landscape, and they are concerned about getting the best value from their investments. Competition in the payments market is being curtailed by the regulatory demands on smaller firms, which cannot invest in the myriad of necessary data sources and tools accessed by larger firms. Data Analytics and better collaboration (including mandatory data sharing) are critical to greater success in defeating financial crime. Stronger guidance and leadership from government and regulators could transform the market. "The new government could appoint a Minister for Economic Crime, increase enforcement and create a collaborative data analytics eco-system using a multi-disciplinary approach by drawing in expertise from across the business field to include victims, financial crime fighters, data scientists, digital identity providers and data privacy experts. Government should not throw the burden of this solely onto the private sector. These actions could help achieve the economic growth so badly needed at the present time.

The Financial Crime 360 survey results clearly show that this year is all about fraud. The survey shows interesting interactions between fraud and AML risk management, with 59% of firms considering strong AML/CTF programmes a key strategy in fraud prevention—a positive step in bringing fraud and AML risk management closer together. It is also good to see so much investment in AI, digital ID verification, and technology to automate processes, as there is a lot of opportunity here for streamlining operations and identifying suspicion more effectively.

We are witnessing the beginning of AI being used in financial crime. AI is being used to “hack” people, tricking them into transferring money to criminals. The existing technical mechanisms, like MFA and biometrics, will not be able to prevent this type of fraud.  I am encouraged to see that the report recognises authorised push payments (APP) fraud and AI-driven fraud, as well as the need to improve transaction monitoring to identify and stop this type of fraud. The way forward with fraud prevention is the combination of AI (which can detect patterns) and human resources (who can act quickly on new threats).