Banks Must Rethink Approach to Addressing Financial Crime Amid Rise in Cyberattacks
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In today’s age of cybersecurity, traditional approaches to addressing financial crime are no longer sufficient. Banks must adopt a holistic view of fraud risk management, integrating cybersecurity and fraud units to effectively combat the evolving landscape of financial crime.
The Need for a Unified Approach
Current defenses against cybercrime and fraud often focus on point controls or silos, but these approaches fail to account for how criminals actually behave. To stay ahead of the curve, banks must think like criminals and design a unified operating model that leverages data sharing, intelligence gathering, and collaborative responses to threats.
Key Components of a Unified Approach
- Integrating business, operations, security, and risk teams to facilitate efficient intelligence sharing and response to threats
- Redefining organizational “lines and boxes” and the roles, responsibilities, activities, and capabilities required across each line of defense
- Probing questions such as:
- What are the key processes or activities to be conducted for customer identification and authentication, monitoring and detection of anomalies, and responding to risks or issues?
- Who are the relevant stakeholders in each line of defense? What skills and how many people are needed to support the activities?
- What data should be shared across cybersecurity, fraud, and other financial-crime divisions?
Case Studies
Center of Excellence
A leading US bank has set up a holistic “center of excellence” to enable end-to-end decision making across fraud and cybersecurity. From prevention to investigation and recovery, the bank has attained significant efficiency gains.
Global Utility
Another global universal bank has combined all operations related to financial crimes, including fraud and AML, into a single global utility, achieving a more holistic approach to financial crime management.
The Way Forward
As the threat landscape continues to evolve, banks must stay ahead of the curve by adopting a unified operating model that integrates cybersecurity and fraud units. By doing so, they can effectively combat financial crime and protect their customers and reputation.