Traditional vectors of economic crime have gone digital to enable the old and new avenues of financial crime, fraud, money laundering and corruption. A new reality has set in for society as economic crime and technology enabled crime become indistinguishable. The result? Experts battling economic crime face the inevitable challenge of aligning their operational capabilities and defenses.
Doing so will require businesses to improve the classic pillars of financial crime, fraud and cyber security governance, forging for the future a more holistic, overarching approach to economic crime that’s rigorous, comprehensive, effective and resilient. In the face of criminals, endless pursuit of new and creative ways to make money, future operational defenses must also be ever evolving.
While individual cyber security, fraud and financial crime teams have changed with the times in response to unprecedented new challenges, they continue to share similarities in the digital era. Cyber security teams are managing information security, technology resilience and some aspects of data privacy controls. The focus of today’s financial crime teams, predominately, includes anti-money laundering (AML), anti-bribery and corruption (ABC), anti-tax evasion and sanctions monitoring. And fraud’s remit extends to insider threat and financial fraud activities such as social engineering, credit or debit card fraud and money mules transporting currency illegally. Each of these teams are dealing with the same issue: organized crime intent on profiting from illegal activity perpetrated by access to systems, from stolen information and from manipulation of vulnerable people.
In more mature organizations, the operational environments between financial crime (typically regulatory driven), fraud (business driven and concerned with monetary loss and customer security) and cyber are converging, with shared data, analytics, insights and technology being deployed to work on key threats together.
The changing ecosystem
Cyber security governance reflects aspects of both fraud and financial crime. Mirroring financial crime regulations on money laundering, bribery and corruption, regulators are increasingly holding organizations accountable for the cyber resilience and data privacy controls of their supply chains and a growing ecosystem of partners.
Fraud and cyber security, meanwhile, address extremely similar threats and are evolving along similar lines. In both areas, regulators, especially in the financial sector, are increasingly placing the onus on organizations to adequately protect customer finances and access to financial and e-commerce applications.
For all three disciplines, the lines between management of enterprise and supplier risk are falling away as supplier ecosystems grow more complex and interdependent. And as consumer expectations for security grow, all functions are becoming increasingly tied to protecting brands and reputations.
The excerpt was taken from KPMG Thought Leadership, Battling economic crime — and winning together