Special Report: Convergence of Fraud and Compliance | Risk Management
A new special report from Raconteur, published in today’s edition of The Times in London, calls out the growing trend of convergence of fraud and compliance. FICO’s Matt Cox discusses why this trend is pressing.
Here’s an excerpt from the article:
“Taking a more holistic approach to fighting financial crime is challenging. Many organisations, particularly those that have grown through acquisition, struggle with a legacy of multiple-point solutions that are embedded into core business systems. This results in silos and a lack of visibility across the financial crime life cycle; criminals take advantage of this.
“A typical enterprise has both fraud and compliance departments. The fraud team is primarily responsible for fraud losses, while the compliance team helps the organisation to stay on the right side of financial crime legislation, most notably the regulations that govern money laundering and tax evasion.
“The departments require much of the same information and both must take appropriate action when financial crime is suspected, but if they don’t share information then neither has a full picture of the customer. Numerous systems are maintained, which means maintaining multiple teams with their own skillsets that are not transferrable.
“Customers can become frustrated with the inconsistency, such as having to provide the same information twice, and cases are often progressed inadequately when information is not available when needed. Running in silos makes the departments more costly to run, increases losses and prevents less financial crime, all impacting the bottom line.
” ‘The fraud and compliance functions need to come together and take a holistic approach to the people, processes and solutions they use,’ says Matt Cox, senior director of fraud, cyber and compliance, Europe, Middle East and Africa (EMEA), at FICO. ‘Then when the customer opens an account, or spends or moves money, the bank can check for money laundering and potential fraud at the same time. If something suspicious happens, the customer doesn’t want two different phone calls from the fraud and compliance teams. Too often that happens these days, so convergence is a must.’ ”
Read the full article
Download the full report
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