(FS.7.01) Fraud Another way financial institutions will look to lower costs and improve results in 2020 is through the convergence of AML and fraud detection. The ever-worsening crime, weak economic growth and collapsing infrastructure will drive up the costs of living and doing business in South Africa. Malicious apps and websites, social engineering lures and distributed denial of service attacks are all being leveraged for espionage, disruption, financial fraud and extortion. The World Economic Forum has ranked cyber crime as among the top three risks the world will face this year in terms of likelihood, thereby signifying how risks associated with technological advancement have skyrocketed over the years. Regional actors have provided channels for navigating the effects of systemic risks such as broader political and economic trends and global issues such as trade, climate change, transnational crime or terrorism. The increasing complexity of global financial crime regulation-and associated regulatory and reputational risks-has resulted in banks adopting an extremely cautious approach to managing risk and as a consequence are reducing and exiting certain types of business. Cyber crime is currently ranked as one of the top global risks by the World Economic Forum and promises to become an even greater concern going forward. Investment in AI by banks and financial institutions for risk-related functions such as fraud and cybersecurity, compliance, and financing and loans has grown dramatically in the last half-decade compared to customer-facing functions. E-commerce retailers and financial firms will shell out $9.2 billion each year in fraud-reduction initiatives by 2020. Data-mining could be used to trawl through financial records to detect past instances of fraud. More than 70% of all hospital data breaches include sensitive demographic or financial information that could lead to fraud or identity theft. 90 percent of U.S. financial institutions either have begun issuing EMV cards or say they will do so by the end of the year. 3D XPoint technology could enable retailers to more quickly identify patterns of fraud in financial transactions. By 2025, two-thirds of global financial firms will integrate cognitive data from third parties to improve the customer experience through targeted product and service offerings and fraud protection. In 2019, email and stolen privileges will continue to be the primary method of bypassing organizations' security to inhibit services, disrupt productivity, steal sensitive data or conduct financial fraud. The National Crime Agency estimates that total fraud losses in the UK could be as much as £193bn and UK residents are more likely to be victims of fraud than any other crime. Organisations who are members of Cifas prevented over £1 billion worth of fraud last year and Cifas will continue to lead the way in the fight against fraud and financial crime. Within the next two years a major financial fraud will be caused by the spreading of highly believable falsehoods through financial markets. The recent introduction of innovative technology and payment methods has increased the opportunities for bad actors to instigate financial fraud in the UK. The US financial regulator has issued a warning that cryptocurrencies are at higher risks of fraud and manipulation in the market. Financial information such as credit card purchases and ATM use could be subjected to methods that learn and predict who's likely to experience cognitive decline or become a victim of fraud. Deep learning will likely start being deployed at scale in the next three to five years for banks to combat money laundering, fraud, and other financial crimes. CFOs will now be expected to don multiple hats to monitor changing global regulations, drive technology adoption, manage emerging risks and become custodians of sound governance practices. See full forecast Last updated: 26 May 2020 Hi, Would you like a quick online demo of our service from an experienced member of our team? Yes No
