The Fraud Landscape
In 2019, the number of Banking Fraud and Identity Fraud complaints in the UK rose to an all-time high. This year, we’ve seen numerous news stories about criminals using the Covid-19 pandemic to target people who are fearful about the safety of their money in an uncertain time. Away from the consumer world, sophisticated cyber-attacks on multinational companies are becoming more frequent and more costly with cybercrime predicted to cost approximately six trillion dollars a year globally by next year.
The most recent PwC Global Economic Crime & Fraud surveys have shown nearly half of all respondents had suffered a fraud committed against their business within the last two years, and that number is expected to rise in 2020. The need for businesses to adapt and change in response to Covid-19 has, just as in the consumer world, created new risks. The European Financial Action Task Force has published multiple guides this year, warning businesses that criminals were utilising the rapid business changes around Covid-19 find new vulnerabilities and encouraging organisations to update and enhance their AML and Counter-Terrorism Financing approaches accordingly.
These sophisticated attacks by organised cyber-criminals and the scams faced by everyday people should be of equal importance to any Finance or Banking organisation right now, with the Global Economic Crime & Fraud survey showing customer fraud making up 35% of threats faced, followed by cyber-crime at 34%. All together these frauds and attacks have cost businesses somewhere in the region of 42 billion dollars across the last two years.
Laws & Losses
As well as the direct harm done by these attacks, regulators are levying much greater fines on businesses that fail to properly protect against crime, with the FCA issuing a £38 million fine right at the start of the year to Commerzbank after they were found to be lacking proper Anti Money Laundering protections. This is one of the largest AML fines ever and other organisations are working hard to avoid falling foul of regulators in the same way.
Businesses need an appropriately cutting-edge response to these types of crime, with new attack and defence techniques being developed at higher and higher speeds. And while the technical side of these incidents generates a lot of press, it is important to remember that the backbone of any response to fraud in the Banking and Financial services world is a strong Financial Crime function.
Any problem is also an opportunity and while there is a lot to be concerned about in the current Financial Crime landscape, there is also a lot of work to be done. It is a good time to be working in AML, and we’ve seen a steady increase in the number of businesses coming to us to discuss the provision of contract AML talent, especially in large organisations that are regularly fending off cyber-attacks there is a huge amount of data to process and analyse to enable them to build up a full picture of their strengths and weaknesses and see where work needs to be done. Many in the industry are hoping that we will soon see a much greater cross-business effort to share the data on financial criminals and their attempted attacks, enabling other organisations to avoid falling foul of a fraud that has been previously attempted on someone else.
There is also the preventative work of screening and assessing new customers and transactions – all tasks that require truly exceptional attention to detail as well as a deep technical knowledge. Alongside KYC professionals, AML staff are the foundation of a secure business with a robust approach to Financial Crime. All of these factors add up to create a landscape where AML expertise is in high demand and businesses recognise the benefits of bringing in contractors and contract teams to avoid reputation-damaging failures and expensive regulatory fines. There’s a clear value in investing in strong AML resource and protecting your organisation from the large losses that can arise from transactional fraud.
At Kind Consultancy we’re very proud to work with some of the UK’s very best AML contractors, and through our Kind Agile Solutions service, we’re able to have them on-site for clients much faster than with a traditional recruitment service. Contact us on 01216432100 or info@kindconsultancy for a confidential discussion of how Kind Consultancy can help you with your AML resource needs, or if you’re an AML contractor in search of your next challenge.