The prevalence of fraud has had an impact on most businesses and financial institutions (FIs), and many are looking for ways to combat more sophisticated criminal operations.
The survey revealed that financial institutions (FIs) implementing AI-powered anti-fraud and anti-crime solutions had lower levels of loss from fraud and crime, but it also revealed that 66% of executive respondents find it challenging to adhere to complex regulatory requirements. 95% of anti-money laundering (AML) executives give innovation a high priority, despite the fact that 85% of them find it difficult to incorporate new solutions into their existing systems.
The report “The State of Fraud And Financial Crime In The U.S.” looks into how FIs are impacted by fraud and other financial crimes as well as how they protect themselves from more sophisticated attacks. The study was performed between April 29 and June 3 and involved 200 executives who work for financial institutions with at least $5 billion in assets.
Fear of complex solutions is a barrier to innovation.
Research suggests that financial institutions (FIs) that implement modern anti-fraud and anti-crime solutions avoid the larger financial loss experienced by those that employ outdated methods. However, a number of FIs are reluctant to change their approach. Even worse, many FIs, even those with extensive anti-fraud and AML plans, may struggle to prevent pervasive losses without a contemporary tech solution as criminals step up the intensity and scope of their financial attacks and, in some cases, target customers directly.
Even if the requirement for modernization would seem to force FIs to adapt their approach to securing their business right away, many still embrace employing antiquated technology in spite of the risk.
According to the survey, the most contemporary types of financial crime, such as scams posing as approved payments or new money-laundering techniques, frequently defy traditional defenses. This is why many executives are delaying the implementation of solutions due to the growing flood of fraud. However, research demonstrates that businesses may effectively counter these attacks by utilizing real-time data and analytics powered by machine learning (ML).
Smaller FIs are more severely harmed.
According to the research, fraud and other financial crime assaults frequently target smaller FIs. Because of this, they are not only more vulnerable to losses but also more likely to sustain a financial injury, which they are less equipped to handle due to their small.
We discovered that financial crime increased for 62% of all FIs, and for an even higher percentage of smaller FIs—those with between $5 billion and $25 billion in assets—as well. Additionally, it was more probable for smaller FIs to have seen a rise in the dollar amount of fraudulent transactions.
According to the research, fraud and other financial crime assaults frequently target smaller FIs. Because of this, they are not only more vulnerable to losses but also more likely to sustain financial injury, which they are less equipped to handle due to their small.
We discovered that financial crime increased for 62% of all FIs, and for an even higher percentage of smaller FIs—those with between $5 billion and $25 billion in assets—as well. Additionally, it was more probable for smaller FIs to have seen a rise in the dollar amount of fraudulent transactions.
