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Banks Unite Against Financial Crime: Integration Key to Enhanced Customer Experience and Digital Trust

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As the threat of financial crime and cyberattacks continues to evolve, banks are recognizing the importance of integrating their risk management strategies to stay ahead of the curve. A recent analysis has revealed that by combining data from separate functions, both internal and external sources, banks can significantly enhance customer identification and verification.

Leveraging Technology for Enhanced Detection

Artificial intelligence (AI) and machine learning algorithms can also be leveraged to produce rapid insights, enabling banks to better detect and prevent fraudulent activities. For instance:

Real-time risk scoring and transaction monitoring can help identify suspicious transactions and reduce the risk of account takeovers.
AI-powered fraud detection can analyze vast amounts of data in real-time, identifying patterns and anomalies that may indicate fraudulent activity.

Integration Leads to Enhanced Detection Capabilities

The integration of financial crime, fraud, and cybersecurity teams has also led to a heightened power of analytic and detection capabilities. This collaborative approach enables banks to:

Deploy solutions such as real-time risk scoring and transaction monitoring more effectively
Reduce regulatory breaches by combining data from multiple sources and functions

Optimizing Customer Experience and Digital Trust

The integrated approach to fraud risk management can also result in an optimized customer experience. By segmenting fraud and security controls according to customer needs, banks can:

Enhance the overall digital trust with their customers
Provide hassle-free authentication and quick dispute resolution

Unified risk management fosters digital trust, a concept that is becoming increasingly important as a differentiator for banks. Security is at the heart of this concept, but factors such as convenience, transparency, and control also play a crucial role.

A Holistic View of Financial Crime

The transformed operating model requires a holistic view of the evolving landscape of financial crime. This involves:

Integrating business, operations, security, and risk teams for efficient intelligence sharing and collaborative responses to threats
Probing questions about processes and activities, people and organization, data and technology, and governance

By doing so, banks can design a target fraud-risk operating model that enables end-to-end decision making across fraud and cybersecurity.

Leading the Way: Case Studies

Several leading banks have already made significant progress in integrating their risk management strategies. For example:

A US bank has set up a holistic “center of excellence” to enable end-to-end decision making across fraud and cybersecurity, resulting in significant efficiency gains.
Another global universal bank has combined all operations related to financial crimes into a single global utility, achieving a more comprehensive approach.

Conclusion

As the financial services industry continues to evolve, it is clear that integration is key to staying ahead of financial crime and cyberattacks. By adopting a unified risk management strategy, banks can:

Optimize customer experience
Enhance digital trust
Reduce regulatory breaches