BioCatch, a digital fraud detection and behavioral biometric intelligence provider, has unveiled the findings of a new study. Titled "Improve Fraud and Anti-Money Laundering Operations With A Proactive And Unified Approach," the research sheds light on the concerns and readiness of major global banks in effectively combating the evolving landscape of fraud and financial crime. The study comes at a time when reports from media and regulatory bodies indicate a worrisome surge in money laundering scams.
Based on responses from over 150 financial institutions in Europe, North America, and Latin America, the research highlights the difficulties faced by banks in detecting fraud and money laundering activities before customers suffer financial losses. The inability to detect customer exposure poses significant financial, regulatory, and reputational risks. Concurrently, the study reveals that banks are grappling with meeting consumer expectations for digital experiences that are both simple and secure.
Key findings from the "Improve Fraud and Anti-Money Laundering Operations With A Proactive And Unified Approach" study include:
78% of global financial institutions express concerns about their ability to respond effectively to emerging fraud threats.
8 out of 10 financial institutions struggle to offer digital experiences that are frictionless and secure.
83% of banking leaders believe that staying abreast of best-in-class approaches for combating financial crime is necessary in the current market environment.
75% of financial institutions report that financial risk increases significantly with each additional day spent investigating cases of financial crime.
75% of financial institutions recognize the criticality of integrating Enterprise Fraud Management (EFM) and Anti-Money Laundering (AML) capabilities for swift responses to financial crime.
Only 8% of banking organizations have successfully integrated people, processes, and tools across EFM and AML.
The survey conducted by Forrester further reveals that financial institutions acknowledge the need for early detection of financial crime and the integration of EFM and AML capabilities. However, only a mere 8% of the surveyed banking organizations have achieved full integration of personnel, processes, and tools across EFM and AML. Most decision-makers are adopting best practices, such as incorporating explainable AI/machine learning (ML) risk-scoring models to ensure transparency in decision-making and provide customers with seamless and secure digital journeys.
The study underscores the value of behavioral biometric intelligence in bridging the gap between EFM, AML, and cyber teams. By leveraging unique data, these teams can collaborate effectively to combat complex fraud types, including social engineering scams. Collaboration among stakeholders, such as banks, regulatory bodies, and law enforcement agencies, is crucial for fraud teams. Financial institutions should leverage collective expertise and resources to adopt innovative fraud and AML solutions that effectively combat financial crimes while offering a superior digital banking experience for consumers.
Gadi Mazor, CEO of BioCatch, emphasized the importance of collaboration amidst increasing consumer demands for enhanced protection and frictionless digital experiences. Mazor emphasized the need for financial institutions to foster internal teamwork, cooperate with other institutions, and partner with technology developers. "As a fraud-fighting community," he said, "we have the opportunity, capability, and duty to fight fraud together."
Peter Tapling, Managing Director of PTap Advisory, a global payments advisory firm, noted the shift required in anti-money laundering practices. He stressed the need for integrated fraud and AML approaches as reimbursement policies for authorized push payment (APP) scams pose significant financial risks to institutions.