The Evolution of Financial Crime Rings: Basement Dwellers No Longer
July 8th, 2021
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.
Attacks Scale with the Growth of Their Organization
Traditionally, when investigators work to detect fraud and money laundering, they see it as transactional, because that’s the tools investigators are working with. They only look at it by recording how much money went through a certain account at a particular time, which is a very limiting way to conduct investigations. The recidivism rate, or the rate of repeat offenders in the BSA, the AML space and in the fraud space, is near 100 percent. This means if you catch one person one time, it is almost guaranteed that they have previously done hundreds or thousands of illegal transactions, either against you or another financial services organization (FSO).
It’s Time to Go After the Team, Not Just the Individual
Criminal organizations tend to operate in patterns. By running a specific type of fraud, they target at-risk demographics, such as the elderly, college students and even medical workers, due to inability to regularly monitor their own accounts. Once the pattern is identified, the next stage is investigating the relationships and preventing fraud before it even happens. Unfortunately, this is easier said than done.
The biggest difference between a successful and unsuccessful investigation is how the data is presented to the investigators. Are they getting the full story in one location or is it a scavenger hunt? Imagine if you picked a DVD off your shelf, fast forwarded 10 minutes in, watched 30 minutes, took the DVD out and smashed it over your knee. You’d have no idea what the full story is. That’s how a consultant or analyst receives information on a case. Unless you’ve centralized data intelligence, investigators tend to handle their cases in isolation. By centralizing the data, investigators can move away from cases that used to take days even weeks to conclude. With all the information in one place, they can complete investigations in record time.
Investigators can greatly enhance efficiency once they can see the whole story from start to finish, without any useless data slowing the investigation down. A holistic view of patterns means seeing how the criminal team is operating their fraud scheme, and once you understand that, FSOs can better protect themselves and their customers by preventing the fraud before it even happens.