Fraudsters and cybercriminals are maturing their approaches, fortified by a threat environment that encompasses increasingly accessible intelligent technology and compute power, data breaches and easily available personally identifiable information (PII) that can be cheaply procured through online sources like the dark web.
Circa late 2010s, the banking industry was seeing an approaching trend on how their business models were going to change due to evolving technologies available on both the financial institution (FI) side, as well as the consumer side. Not wanting to be left behind by the larger players, community banks and credit unions put five and 10 year plans in place to smartly implement these new technologies into their own models.
Over the span of the last decade, there has been a seemingly unstoppable growth in financial crime and the predicate crimes that feed it. This has caused anti-money laundering (AML) efforts to become a top priority for financial services organisations (FSOs). However, financial crimes and money laundering techniques have become far more sophisticated and continue to evolve. The stakes for FSOs have never been higher.
In an era where diverse digital payment methods are proliferating, data breaches are more frequent. With intelligent technologies rapidly advancing, the nature of payment fraud in the EMEA region is becoming increasingly complex and pervasive.
Following years of exponential developments and delays, ISO 20022 is finally experiencing more pervasive adoption. This global standard for financial services-related messaging is already live in many global payments systems, including The Clearing House’s (TCH) Real- Time Payments (RTP) rail in the U.S., and the Real Time Rails (RTR) in Canada. It is also being implemented in Target2 and CHAPs systems, and numerous market infrastructures, such as SWIFT, have deployed multi-year migration strategies.
When thinking of all the necessary pieces that comprise a functional risk-based AML process, one would be shocked to find Customer Due Diligence (CDD) not on that list. Yet, how important is CDD in the overall view of AML?
Shatter your mental image of a financial criminal hunched over in a dimly lit room, chugging energy drinks as they work tirelessly to breach your system. In today’s world, the criminals on the other side of the transaction are as professional in their work as the crime fighters.
In the fraud prevention world, the terms ‘validation’ and ‘verification’ can become somewhat synonymous with each other. Validation is the determination of legitimacy, while verification is the matching of information to a trusted source. When assessing third-party data sources, it can be profitable to be aware of the difference.