Here is the article rewritten in markdown format:
Banks Face Heightened Risk of Fraud as Activity Surges
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As the financial industry experiences an unprecedented surge in customer account and fund movements, banks are facing a heightened risk of fraud and other financial crimes. With the increase in transactions comes the potential for fraudulent activity, including identity theft, phishing scams, and insider trading.
Potential Issues
Banks may see an influx of fake accounts created to misappropriate funds or receive stolen money. Insiders at affected institutions or individuals with access to sensitive information could also be involved in fraudulent activities. Furthermore, banks may encounter transactions that raise concerns about potential money laundering or other financial crimes.
Key Actions to Consider
To mitigate these risks, banks must take immediate action:
- Evaluate fraud detection controls: Review identity proofing, authentication, and rules and models to ensure they can handle the surge in activity.
- Work with commercial onboarding teams for fraud referrals: Identify unusual activity, such as new settlement instructions, and coordinate with incident response teams when necessary.
- Monitor for infiltration risk: Ensure temporary labor is well-vetted and provisioned with minimal user access to prevent insider threats.
- Review transactions for money laundering concerns: Obtain information from customers or public sources as needed and make timely regulatory filings.
Risk Oversight Issues
As banks struggle to keep up with the surge in activity, risk oversight teams must be able to adjust their monitoring frequencies and methods. This includes:
- Increased monitoring frequency: More frequent monitoring of business and operations areas to understand the impact on risk and control environments.
- Evaluating key risk indicators (KRIs): Review KRIs to understand the true state of affairs in the business or operations.
PwC Can Help
At PwC, we offer a range of services to help clients address activity surges:
- Identity proofing and verification
- Fraud alert vetting and review (new account opening, transactional)
- Fraud investigations
- Customer due diligence and enhanced due diligence reviews
- SAR drafting
- Fraud detection rules and model tuning
We specialize in enhancing Fraud and AML programs by advising on design and implementation of organizations, policies, procedures, processes, and controls. Our teams help clients identify and assess regulatory risks, gaps, and controls.
Contact Us
For more information on how PwC can help your bank navigate this critical period, please contact us at [insert contact information].