In recent times, many financial organizations are integrating many technologies to manage compliance and anti-money laundering frauds. With increasing demands in risk management, many businesses face new challenges. For instance, there is a lot of new software and technologies in the market to combat such risks; hence it’s difficult for banks to scrutinize them and consider their specific requirements. This is where AML, cybersecurity, and anti-fraud systems are converged together to streamline detection management from suspicious transactions.
Battling financial crime is challenging, hence fraud and anti-money laundering functions need to be integrated for a holistic approach to the solutions and users. For instance, if a customer opens an account with a bank, the bank can check for fraudulent activities, cybersecurity, and money laundering activities simultaneously and not separately. If there is any suspicious activity, the customer will end up receiving three different calls from the AML team, cybersecurity team, and fraud team, hence convergence of all three is a must.
Typically, any financial institution has a fraud and compliance segment. The fraud team is responsible for fraudulent activities and losses whereas the compliance team is responsible for the legal processes, government regulations, and tax evasions. If there is any suspect or any financial crime detection both the departments may have captured similar information and will have to take the right action. But in most such cases, both these departments do not share such information which doesn’t provide full proof information and a picture of the customer, leaving investigations incomplete. This means multiple systems are maintained in the same company, but the information is not transferable. Imagine such scenarios can be frustrating for customers as they will get calls from different departments asking for the same information repetitively when the pool of information is available with the Bank. To streamline investigations, they’ll need to converge their cybersecurity, AML, and anti-fraud solutions.
Challenges in CyberSecurity, Fraud, and AML
The road to convergence is quite challenging and tough, depending on the nature, size, and complexities of the organizations. Many factors must be focused such as which areas can be integrated now or in the future; some areas could be kept separate and combined at a later stage, some segments can be quickly converged, some segments can be added at a later stage. Another challenge is one solution will not be suitable for all organizations, it must be tailored for organization-specific needs like demographics, nature, and type of company, client type, legal rules, etc.
Increasing demands of customers, expecting payments, and other requests grow swiftly, hence converging has become a necessity. As to perform this, banks will have to detect behavioral patterns and assess them quickly, so converging is crucial as it will lead to faster payment processing and quick services.