With the fourth EU Directive on Money Laundering coming into force in June this year and instances of financial crime becoming increasingly frequent, it is more crucial than ever for teams within Financial Institutions (FIs), as well as across the industry, to collaborate to tackle financial crime and fraud. In 2016, more than 75 cyberattacks were reported to the Financial Conduct Authority (FCA) in the UK compared to just five reports in 2014; the challenges of managing and combatting financial crime risk are becoming more and more difficult. The need to mitigate financial crime is particularly prudent given that statistics from CEB Tower Group show that fines from financial crime have increased by 55,000 percent over the past 10 years, thanks to more frequent and higher value attacks.
In order to tackle financial crime and to lessen the impact of fraudulent attacks, organisations need to ensure that they have the correct infrastructure in place. Anti-Money Laundering (AML), Know Your Customer (KYC) and fraud prevention solutions are all key to reducing and managing financial crime risk, yet knowing which one to prioritise can prove a challenge. Financial crime is unpredictable, therefore FIs need to implement prevention strategies and share resources between teams so that comprehensive customer profiles can be created. These profiles can make a huge difference in identifying unusual behaviour indicative of money laundering, tax evasion, human trafficking and instances of fraud. Ultimately such an approach helps FIs reduce the amount of overall investment required to manage financial crime risk whilst enabling more accurate detection of fraud and money laundering.