Fraud outbreak threatens banks in Brazil, USA, UK and Germany

Rising levels of fraud and financial crime during the pandemic threaten to overwhelm bank employees who work from home with disconnected internal systems, according to new FICO research. The predictive analytics firm commissioned a survey by Omdia, which heard 110 senior executives responsible for security and combating financial crime at banks in the United States, the United Kingdom, Brazil, Germany, the Nordic countries and Canada.

In the UK, the vast majority (79%) of respondents cited remote work as having a “high” or “major” impact on the effectiveness of their financial crime prevention efforts. The lack of resources for cloud protection for those working from home, in addition to low levels of automation, inflexible systems and low levels of integration have aggravated the challenges of maintaining productivity levels across the remote workforce, the report concludes.

Lack of integration seems to be the key: half (49%) of respondents in the UK cited having multiple software systems for fraud management and financial crime compliance as a major challenge.

Toby Carlin, senior director of fraud consultancy at FICO, explains that while 80% of the functions shared between fraud prevention software and anti-money laundering software are the same, these systems and the teams that operate them are almost always separate. .

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Nearly two-thirds (64%) of respondents in the UK said that these teams do not report to the same person at the bank. “Just as the pandemic put a lot of pressure on the health care system, it also put a lot of pressure on fraud and financial crime management teams,” explained Carlin to Infosecurity.

“Teams that collaborate in person and work with large software systems with restricted access have found that working from home impaired their productivity. This was aggravated as the volume of fraud attacks increased ”, he added.

As a result, 69% of global financial institutions surveyed for the report now have plans to integrate functions or share resources between anti-money laundering compliance and fraud. Half (50%) said they will do so within three years.

The findings are in line with a report by BAE Systems Applied Intelligence published last year, which revealed frustration among banks’ AML team about outdated technology and lack of resources. He also says that most customers now expect their banks to do more to prevent money laundering and related crimes.