How to Start Converging Fraud and Financial Crime Management

Here are three practical tips for institutions looking to improve fraud and financial crime management

As I discussed in my last post, the convergence of fraud and financial crime management is finally reaching a tipping point. I discussed this trend in my recent webinar, Fraud & Financial Crime Convergence: Demanding Smarter Decisions and in this post, for those of you that are tired of streaming, I’ll highlight some of the key thoughts that you can speed read. 

Getting Your Feet Wet

With the clock ticking, teams at many institutions are beginning to feel the pressure to figure out just how they are going to make convergence a reality. While many are under the assumption that financial institutions need to fully integrate fraud and AML teams to realize the benefits, they don’t have to fully merge.

In fact, a significant number of organizations are focusing on technology alignment - recognizing that enterprise technology can facilitate more immediate results, better collaboration and budget sharing. Recently, Julie Conroy, Fraud and Financial Crime Research Director at Aite Group, shared in a webinar that 45% of North American institutions recently surveyed were focused on converging technology.

In that same webinar, I shared three practical tactics that will help you get started:

  1. Understand your common data points. Start by ensuring you understand your needs. Evaluating your data can seem overwhelming, but start somewhere simple. Determine where your data is shared, where you can increase data quality among common data assets, and the kinds of decisions you make based on the data.  Identifying commonality in data can help you pinpoint quick wins, for example, sharing common investigative data about transactions that was previously siloed.
  2. Think collaboration. This as an opportunity for partnership, not just internally across units but externally as well. When looking for ways to partner externally, you should participate in data pools and consortiums to help drive convergence. Consortiums, like the FICO® Falcon Intelligence Network, give you access to fraud models based on training from a large number of organizations, in our case more than 9,000 global financial institutions. This access gives you better precision, adaptability and insight into changing fraud patterns.
  3. When it comes to technology, think bigger. You don’t need everything converged on day one, but you will need to ensure that you implement infrastructure that you can grow with instead of relying on solutions that will only serve you for a particular point in time. Here are some questions to consider:
  • What does your long-term plan look like?
  • How will your technology platforms and footprints handle a converged enterprise?
  • What forward-looking capabilities will you require? Contemplate things like real-time payments, machine learning capabilities, access to consortia, process automation and the ability to ingest and wrangle data from multiple sources.
  • What kind of technology investments are needed today to get there?

If you want to learn more about fraud and financial crime convergence, check on my recent webinar, Fraud & Financial Crime Convergence: Demanding Smarter Decisions, which is available on-demand.

Incidentally, if you are looking for something additional to enjoy while self-quarantining, I highly recommend Liz Lasher’s blog post which highlights things to read and watch during these not-so-normal times. And that is only partially a shameless plug, since my book recommendation made the top of her list; her post wasn’t so much a rank-ordering, but anytime I can come in first, I’ll take it. ?

Follow me on Twitter @FraudBird.

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