A country being added to the FATF grey list can have far-reaching ramifications. Any country being considered as a new addition to the grey list will try desperately to ensure they’re not added. Showing up on a FATF grey list can adversely impact investment into the country, overall growth, and it can affect the country’s currency—making goods and services more expensive. Heavy Financial Impact to Financial Institutions To third parties, risk heightens significantly dealing with a country on the grey list or any entities operating within that country.  Any organization, especially in fina ..read more

In the tragic aftermath of 9/11, Section 314(a) and (b) of the USA PATRIOT Act were introduced to help combat money laundering, terrorist financing, and other financial crimes. These provisions require financial institutions, including credit unions and small banks, to share information with law enforcement agencies and other financial institutions in order to identify and prevent illicit activities. Failure to comply with these provisions can lead to legal liability, reputational damage, and missed opportunities to contribute to national security efforts. Fortunately, a unified fraud and AML ..read more

In the recent blog “Payment Systems Regulator (PSR) Responds to Increasing APP Fraud with Mandatory Reimbursement Proposal for Fraud Victims”, we discussed the changes to regulation for fraud liability in the U.K. and diffusion of regulation to new countries. Financial institutions not only have to contend with the harsh realities of customer attrition following fraud events, but also navigate the treacherous regulatory waters of who will bear the ultimate liability. With regulatory bodies opining on the financial institution’s responsibility and position in the aftermath of a fraud, the stake ..read more

In this article, we explain how machine learning techniques can help achieve complex tasks, such as tuning thousands of parameters at once, with great results. When tuning transaction monitoring rules, like those used by SAM, there are two aspects to consider: Detection Thresholds and Scores. Detection thresholds define the pattern of activity you are trying to detect. For example, a high transfer rule will have a high wire amount threshold that matches what is considered ‘high’ by the business. Scores are meant to be a representation of the level of risk a particular pattern represents. The ..read more

A Quick Look Back on 2022 2022 was a year of change that took the financial crime and compliance industry on a roller coaster ride. The U.K. pushed through the Economic Crime Act at lightspeed, and the sanctions landscape changed overnight with the Ukraine and Russia conflict. There was political uncertainty both in the U.K, with the constant Prime Minister changes, and in the U.S. thanks to midterm elections. Potential leadership changes could have significantly impacted the focus and direction of financial crime. But safe to say, we made it to the end of this tumultuous year with our strateg ..read more

In the U.K. last year, authorised push payments (APP) fraud reached £583 million ($706 million), a 39% increase from 2020.[1] APP fraud represents the most significant fraud threat in Britain and accounted for more than half of the £1.3 billion in losses due to scams in 2021.[2] The pandemic-prompted shift to online platforms is one of the main contributors to the surge in APP fraud. With a range of tactics that include investment scams, romance scams, malicious ads on social media, and purchase scams, APP fraud continues to inflict devastating consequences. APP fraud has gained notoriety for ..read more

Rampant inflation, unprecedented energy bills, rising interest rates, and now, at least in some markets like the U.K., rising taxes—to say that many businesses and individuals are feeling the squeeze is an understatement. Many developed economies are either in a recession, or on the brink of it, and the ongoing geopolitical tensions only add to the uncertainty. This is very much on the minds of bank executives as they look ahead to 2023. At Celent, we recently published our technology trends “previsories”—forward-looking reports outlining bank imperatives in 2023. To help inform these, we ran ..read more

As the blockchain industry matures, cryptocurrencies are becoming a legitimate asset class that’s getting the attention of traditional financial institutions (FIs) that want to become part of this new economy and expand their revenue streams.       These institutions come to Chainalysis to get advice on how to engage with crypto. What’s the main reasons behind a hesitation to enter the space? Lack of regulatory clarity and not having the tools needed to mitigate the risk associated with offering crypto. Dipping toes into the infinite ocean of blockchain can be overwhel ..read more

Buy vs. build debates have reignited as financial crime becomes more complex. So which approach is best? The biggest drivers to determine if you should buy or build a case management system for your financial institution (FI) actually comes down to three questions: Is your current system(s) impacting the efficiency or effectiveness of your financial crime risk management programs? Does your solution need to accommodate fast future expansion, new tech, or retain intellectual property (IP)? Do you need standard features or require a higher level of customization based on business needs?  ..read more

Is your newsfeed oversaturated with fraud stories lately? This year was a frenzy of fraud with bold criminals who aggressively construct a risk landscape reflective of the technology-forward mindset of today.  Digital fraud losses are anticipated to surpass $343 billion globally between 2023 and 2027. With a fresh crop of fraud trends gaining momentum—including synthetics, insider recruitment, lending fraud, and social media scams—mid-sized financial institutions (FIs) must rethink their approach to fraud prevention.  Customer loyalty and brand reputation is on the line. The stakes c ..read more