The convergence of fraud, anti-money laundering, cybersecurity and risk call for a more integrated approach to fighting fraud.

GUEST BLOGGER

Brooke Fortson
Product Marketing Manager for Fraud and Security Intelligence, SAS

Red Rover is a popular children’s game in many English-speaking countries. Kids clasp hands, standing side-by-side to form two lines, each facing the other. One team taunts their rivals, “Red Rover, Red Rover send Chris right over!” Chris rushes the opposing line, trying to break the human chain.

Imagine your bank as one team and fraudsters as the opposition. Would the bank hold strong? Or would the fraudster burst through?

Red Rover, Red Rover, send the fraudster right over!

Fraudsters are exceptionally skilled at finding the cracks and vulnerabilities resulting from siloed business processes and strategies. Keeping them on the other side takes an integrated system with strong connections between anti-money laundering (AML), fraud, cybersecurity and risk systems.

Fraud is changing every day. Attacks are becoming more sophisticated, well-orchestrated and cyber-oriented. At the same time, cybersecurity vulnerabilities are increasingly being identified as the root cause of fraud events — and it becomes a vicious cycle.

Criminals steal data (Cybercrime)

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Criminals use stolen data to steal money (Financial crime/account takeover)

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Stolen money funds criminal and terrorist activities

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Criminals launder proceeds (Money laundering)

Financial crime analytics help analysts piece together that chain of events, ultimately helping them detect fraud earlier and prevent money laundering.

This convergence of financial crimes is leading financial institutions to integrate their fraud and anti-money laundering systems and processes to improve efficiencies and become more effective at combating — and even predicting — emerging threats. They need visibility across all types of risks to accomplish those goals. Having a holistic view of customers and suspicious behaviors can:

Lead to more effective investigations and communications across teams.
Eliminate redundancies in disparate processes making investigators more effective.
Identify risks that otherwise may be missed.

Achieving real-time detection and prevention is a challenge for most banks, though, and the devil is in the data.

Strengthening the connection between departments by combining data sources

Much of the data required to uncover money laundering is similar to what is needed to prevent fraudulent transactions. A major difference is the frequency. Analysts typically see fraud as a single transaction in real-time, whereas money laundering tends to be a pattern or a series of transactions over time.

Although these systems require similar information, if that information isn’t shared, neither can create a holistic view of the customer. By combining data sources, organizations can gain a more holistic view of their risk, and their analysts can access the data they need to make decisions quickly and confidently.

As fraudsters become more sophisticated, so, too, must the systems meant to discover and stop them. With data orchestration, entity resolution and analytic modeling across enterprise-wide data, a system can better spot suspicious activity. Continuous monitoring and adaptive learning can then teach the system how to continuously improve and automatically update strategies for better detection, keeping the organization a step ahead of the fraudsters.

Breaking down silos can establish collaborative intelligence and investigation management. Although processes and workflows may differ, eliminating multisystem queries and providing more context into suspicious behavior boosts the speed and productivity at which an analyst can work an investigation.

Integrating fraud and AML processes is no longer a luxury; it’s a necessity. The link between financial crimes is real — and it’s only getting more complex. A holistic view of suspicious customer behavior across all business lines helps create a strong, reliable defense against fraudsters.

Remember, it’s like a game of Red Rover. A fraudster will be hard pressed to penetrate a united front across fraud, AML, cybersecurity and risk.

Brooke Fortson leads the global product marketing team responsible for the Fraud and Security Intelligence portfolio of solutions at SAS. Follow her on Twitter, @brooke_fortson.

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