Are Banks Bringing Fraud and AML Departments Closer Together?

Fraud management and AML compliance are both about tackling financial crime, but often they are managed by different teams, each with their own processes and technology. For many years the idea of convergence in managing financial crime at banks has been under discussion — but is this a meaningful trend or simply wishful thinking?

When it comes to the technology to support financial crime specialists, we estimate that there is an overlap in their requirements of around 85%. Certainly, fraud and AML compliance teams need almost identical information about their customers at the same points in the customer lifecycle, and they look for the same types of suspicious behaviour that indicates criminal activity. It’s also true that fraudsters do not operate in siloes when they transfer the money from their frauds into cash by laundering it through a network of money mules.

So why do those fighting financial crime generally have two departments?

On the surface there are clearly reasons why the fraud and AML compliance departments should work together. We wanted to test this hypothesis to find out if financial crime convergence was desirable, if it was actually happening and what plans banks have to bring the two functions closer together.

To find out, FICO commissioned Ovum to carry out an independent study. Ovum interviewed senior managers with responsibility or financial crime management from over 100 banks across 10 countries, and have written a whitepaper on the results of their research where they uncover:

• The motivation behind moves to make financial crime departments work more closely together
• The factors that prevent banks from achieving their financial crime management goals
• The likely benefits of convergence
• The plans and timelines banks have for building more integrated financial crime functions

Read the results of the study in Ovum's white paper, Adopting an Integrated Approach to Fraud and AML Compliance download here.