The Growing Case for Fraud and AML Convergence

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13 January 2021
Neil Katkov

Financial institutions maintain two large and complex operational regimes dedicated to fighting financial crime. Both are laden with technology operated by armies of professionals dedicated to rooting out criminal activity. Why not combine them and reap the benefits in increased efficiency, lowered costs, and improved analytical insights?

Convergence of fraud and anti-money laundering (FRAML) technology and operations has been somewhat of a Holy Grail for financial institutions for at least a decade. While the concept has its promoters and detractors, FRAML makes sense to many in the industry. A number of technology providers have offered FRAML features in their financial crime solutions for some time already.

Now is a good time to take stock of where we are with FRAML. Regulators have come to understand that fraud and money laundering are intrinsically connected and are starting to ask financial institutions to coordinate their fraud, AML, and even cybersecurity efforts. The pandemic year has seen significant increases in fraud volumes and a proliferation of new laundering techniques. This has all played out against a backdrop of increasing technological sophistication on the part of fraudsters and money launderers to exploit the criminal opportunities that abound in digital financial services channels.

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Insight details

Industry
Capital Markets, Corporate Banking, Life & Health Insurance, Property & Casualty Insurance, Retail Banking, Wealth Management
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Risk & Compliance, Operational Risk
Insight Format
Blogs
Geographic Focus
Asia-Pacific, EMEA, North America