Financial Crime World

New Zealand Grapples with Surging Financial Crime: Banks Take Action

Financial Crime on the Rise in New Zealand

A recent surge in financial crime and fraud has left New Zealand’s economy and financial stability under pressure. According to a Ministry of Justice survey, the annual count of fraud and deception crimes jumped from 288,000 to 510,000 cases over the past year.

Examples of Notable Financial Crimes

  • Cybercrime: Phishing scams have become increasingly common, with the NZTA being targeted in 2023.
  • Investment Scams: Investment scams are on the rise, with individuals lured into high investment returns or cryptocurrency opportunities.
  • Anti-Money Laundering (AML): AML remains an issue within the financial system, with perpetrators adapting to digital banking.

Financial Crime Statistics

In the second quarter of 2023 alone, New Zealand recorded 1,950 reported scams, resulting in losses totalling NZ$4.2 million according to data from the government’s Computer Emergency Response Team.

Why is Financial Crime Escalating?

  • Global Interconnectedness: Online financial transactions, digital banking, and e-commerce have created opportunities for cybercriminals.
  • Economic Pressure: Financial stress has made individuals more susceptible to fraudulent schemes.
  • Cryptocurrencies: Anonymity makes them attractive to money launderers and fraudsters.

Underreporting: A Significant Issue

Underreporting is also a significant issue, with as few as 7.5% of fraud and cybercrime incidents being reported to the police.

New Zealand Banks Take Action

In response, New Zealand banks have announced new measures to combat scams and protect customers. These initiatives include:

  • Establishing a National Anti-Scam Centre: A centralized hub for combating financial crime.
  • Pooling Resources to Combat Money Laundering: Collaborative efforts to enhance AML capabilities.
  • Enhancing Public Awareness: Raising awareness among the general public about the risks of fraud and scams.

Raising Awareness: Key to Prevention

Raising awareness among the general public about the risks of fraud and scams is crucial. Organizations like the FMA are actively engaged in educating citizens.

The Future of Financial Crime Prevention

The surge in financial crime and fraud in New Zealand is a multifaceted issue driven by global integration, economic pressures, technological advancements, and regulatory complexities. Consequently, this sector is experiencing remarkable growth in the realm of Risk & Compliance. Teams dedicated to fraud detection in banks and cybersecurity are expanding, with a growing demand for individuals who excel in problem-solving, possess exceptional analytical skills, and can communicate complex topics effectively.

If you are a financial institution looking to expand your expertise in this space, consider reaching out to Hunter Campbell to source the right people for your team.