Staying Ahead of Financial Crimes: Key Priorities for Financial Institutions in 2024
Financial institutions (FIs) face a growing threat of financial crimes in 2024. To combat this risk, it is essential for FIs to invest in their financial crime program, foster collaboration with regulatory bodies, and continually enhance their risk management frameworks.
Five Key Priorities for FIs in 2024
1. Investing in the Financial Crime Program
Financial institutions should invest in their financial crime program through technology, hiring, and program assessments to ensure they have the necessary resources and expertise to detect and prevent financial crimes effectively.
- Technology: Implement advanced tools and systems to enhance detection capabilities
- Hiring: Recruit skilled professionals with expertise in financial crime prevention
- Program Assessments: Regularly review and assess the effectiveness of the financial crime program
2. Fostering Collaboration with Regulatory Bodies
Collaboration between FIs and regulatory bodies is crucial to stay ahead of emerging threats and ensure compliance with regulations.
- Share intelligence on emerging threats and best practices
- Participate in regular meetings and forums to discuss regulatory requirements
- Engage in joint initiatives to combat financial crimes
3. Continually Enhancing Risk Management Frameworks
Financial institutions should regularly review and update their risk management frameworks to address new risks and threats.
- Identify emerging risks and assess their impact on the business
- Develop strategies to mitigate or manage these risks
- Review and update policies and procedures as needed
4. Deploying Advanced Technology
The use of advanced technology, such as artificial intelligence (AI) and machine learning (ML), can help detect and prevent financial crimes more effectively.
- Implement AI-powered systems to identify suspicious transactions
- Use ML algorithms to analyze data and predict potential threats
- Continuously monitor and update these systems to ensure effectiveness
5. Addressing Insider Threats
Financial institutions should take steps to prevent insider threats, including requiring IT administrators to sign in with their own credentials and regularly reviewing user access profiles.
- Implement multi-factor authentication for sensitive systems
- Regularly review and update user access profiles
- Provide training on cybersecurity best practices
Employee Compliance and Internal Controls
To ensure the effectiveness of financial crime prevention measures, FIs should also focus on employee compliance and internal controls, including:
- Employees with access to sensitive information logging out and preventing misuse
- Password protection policies to prevent sharing of login credentials
- Regularly checking and updating user access profiles
By following these key priorities and best practices, financial institutions can stay proactive in addressing the growing threat of financial crimes in 2024.