Unit21, a global risk and compliance leader that proactively mitigates risks tied to fraud, money laundering, and other financial crimes, announced the findings of its third annual State of Fraud and AML report at Money2020.
“The burden on fraud and AML teams across FIs and fintechs is well known, but what is not discussed enough is how organizations are combating this uphill battle”
The report provides a unique view into the current and future impacts of fraud and AML across banks, credit unions, and fintechs. It also identifies several measures that fraud and AML teams are taking to manage that impact, such as real-time monitoring solutions and faster rule deployment strategies.
“The burden on fraud and AML teams across FIs and fintechs is well known, but what is not discussed enough is how organizations are combating this uphill battle,” said Trisha Kothari, Co-founder and CEO of Unit21. “By publishing this report, we hope to shed light on many of the issues and opportunities so that as an industry, we can have more collaborative, transparent, and frank conversations on how to combat bad actors, together.”
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More than 350 representatives across banks, credit unions, and fintechs were surveyed about their attitudes and behaviors towards current fraud and AML activity over the past year. Participants also responded to questions regarding the financial impact of fraud on their organizations and current and future prevention measures they have implemented. The survey was distributed from June through September 2024, and results were collected and analyzed by Unit21.
Data shows increases in scam activity since last year; outdated detection systems can’t keep up
Unit21’s State of Fraud and AML report found a staggering increase in scams, including check fraud, romance fraud, credit card fraud, and phishing attacks. Respondents agree that time is an issue as well, as fraudulent activity has increased while deploying prevention measures have remained a slow and painful process. Respondents who have implemented real-time monitoring solutions show significant improvements in alerts and investigations. The report also addresses the recent trend of combining fraud and AML teams to reduce operational inefficiencies, and those who have combined teams have seen improvements in overall fraud prevention and detection and shared resources.
Significant findings from the report include:
- Scams: 14% of respondents reported a 50% or more growth in scam detection over the past year.
- Check Fraud: Despite the industry’s view that checks are becoming irrelevant, 30% of banks reported an alarming 25-75% increase in check fraud in the last 12 months.
- Rule Deployment: 32% of respondents report taking more than a month to deploy new rules for fraud and AML detection.
- FrAML: 71% of respondents saw a significant improvement in detection and prevention when fraud and AML is combined into one team with shared resources.
- Alert Investigations: 34% of respondents reported an increase in the time spent per AML alert over the past 12 months.
- Real-Time Monitoring: 51% of respondents reported seeing improvements in fraud detection and prevention when using real-time monitoring solutions.
Unit21 also released an industry roundtable discussion of specific cuts of this data including a deep dive into banks, credit unions, and fintechs featuring industry vets like Jason Mikula, Frank Mckenna, Hailey Windham, Donna Turner, and more.
Unit21 is on a mission to unite the world’s fraud fighters and AML heroes to see the financial ecosystem restored to the pathway of opportunity it was meant to be. We specialize in solutions that don’t just identify but proactively mitigate risks tied to money laundering, fraud, and other illicit activities. Uniquely positioned to solve the problem of financial crime and well-funded, we have raised close to $100 million from Google, Tiger Global, and other leading VCs.
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