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Survey: U.S. Banks Lag Behind Canadian, U.K. Counterparts in Race to Merge Fraud, Financial Crime Operations

A survey of banks in 10 countries finds that U.S. banks lag behind global counterparts in integrating functions

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Fraud Protection & Compliance

SAN JOSE, CA. – September 11, 2019


  • Only one quarter of retail banks have adopted an integrated approach to financial crime systems, but active collaboration between functions is now the norm
  • Two-thirds of banks take a strategic approach to integration, driven by detection and scalability benefits, in addition to cost synergies
  • 72% of banks are looking to get integration synergies and the majority are seeking to do so within three years

A new independent survey by research firm Ovum, on behalf of global analytic software firm FICO, has found that most banks plan to integrate their fraud and financial crime compliance systems and activities in response to new criminal threats and punishing fines, with the U.K. leading the pack.

Responses show that U.S. systems are less integrated than Canada's – only 25 percent of U.S. banks have a common reporting line for both fraud and compliance, versus 60 percent for Canada.

More information: https://www.fico.com/en/latest-thinking/ebook/usa-banking-survey-2019

The survey also found that 72% of U.S. banks surveyed have strategic plans for further integration. Worldwide, 71% of banks across the regions surveyed have integration strategies, to either fully integrate functions or share resources where synergies exist with the U.K. leading the way, followed closely by the U.S.

These goals are driven by considerations both financial and strategic: Since the 2008 financial crisis, regulatory fines for the global banking industry for compliance breaches related to compliance or sanctions failures now total more than $28 billion (all figures USD), with some single fines as high as $8.9 billion. However, this regulatory ‘stick’ is only one driver for banks to tackle financial crime — banks also wish to protect their customers and themselves.

“Banks are asking a fundamental question: Is the current approach to tackling financial crime sustainable or should they seek a more integrated approach between fraud and anti-money laundering (AML) compliance?” said TJ Horan, vice president of fraud solutions at FICO. “U.S. banks are all too familiar with the challenges presented by a disconnected approach, but struggle to manage high workload volumes and ensure detection rates are high.”

Though the world’s banks appear united in their pursuit of integration, FICO’s survey found significant differences between approaches among the ten countries studied.

Top pain points in meeting financial crime compliance objectives

Rank U.S.Rest of the World
145%: Ensuring detection rates are high42%: High levels of false positives
242%: Managing increasing levels of alerts38%: Ensuring detection rates are high
336% (tie): Disconnected approach to managing financial crime; Managing high workload volumes due to defensive approach (e.g. SAR filings)35% (tie): Managing high workload volumes due to defensive approach (e.g. SAR filings); Speed in responding to new financial crime threats


Main technology-related challenges for anti-financial crime

Rank U.S.Rest of World
148% (tie): Performance of technology platforms; Cost of technology systems47%: Performance of technology platforms
239%: Use of multiple systems across operational processes43%: Use of multiple systems across operational processes
338%: Low integration between technology systems38% (tie): Speed to change technology systems; Ability to support management reporting


Current level of integration between fraud and financial crime compliance functions



U.K.All Respondents
1Data: 27% very integratedInvestigation systems – 53% very integratedData: 29% very integrated
2Investigation systems: 24% very integrated (tie)Detection systems – 35% very integratedInvestigation systems: 28% very integrated
3Controls: 24% very integrated (tie)Controls – 25% very integratedControls: 25% very integrated


U.S. banks reported lower levels of integration than their U.K. counterparts in six out of seven areas. Even at their highest levels of integration, data and investigation systems, just over half of U.K. banks said their fraud and financial crime compliance systems were very integrated. Worldwide, it’s clear the banking industry has only started the process of bringing these functions closer together.

Ambitions for integration between fraud and AML compliance functions

Strategic plan to fully integrate functions24%47%29%
Strategic plans to share resources where synergies exist48%35%42%

Tactical approach to sharing resources where synergies exist, with active drive for this

Tactical approach to sharing resources where synergies exist, but no active drive for this15%6%11%

No plans for integration



Most respondents received high marks when it came to strategic planning, with most having strategic plans to either fully integrate their functions or share resources where synergies exist.

“Convergence is a hot trend in the fraud and financial crime compliance space,” Horan said. “Overall, our survey shows that banks are moving in this direction, though the U.S. is further behind than most countries surveyed.”

Ovum surveyed over 100 retail banks on their priorities, challenges, and plans for financial crime, looking to assess the maturity of the sector in tackling financial crime, and ambitions towards integration. In addition to the U.S., Canada, and the U.K., respondents came from South Africa, Scandinavia, Germany, and Austria.

About FICO
FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956 and based in Silicon Valley, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 195 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 100 countries do everything from protecting 2.6 billion payment cards from fraud, to helping people get credit, to ensuring that millions of airplanes and rental cars are in the right place at the right time. Learn more at http://www.fico.com

FICO is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.

About Ovum
Ovum is a market-leading data, research, and consulting business focused on helping digital service providers, technology companies, and enterprise decision-makers thrive in the connected digital economy.

Through our 150 analysts worldwide, we offer expert analysis and strategic insight across the IT, telecoms, and media industries.

We create business advantage for our customers by providing actionable insight to support business planning, product development, and go-to-market initiatives.

Our unique combination of authoritative data, market analysis, and vertical industry expertise is designed to empower decision-making, helping our clients to profit from new technologies and capitalize on evolving business models.

Ovum is part of Informa Tech, a B2B information services business serving the technology, media, and telecoms sector. The Informa group is listed on the London Stock Exchange. Find out more via: ovum.informa.com

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Greg Jawski for FICO
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