Financial services firms are pumping 3% of annual revenues into financial crime compliance programmes and strategies, equating to almost £60 million a year for the larger banks. In addressing the problem, they also appear to be spending twice as much on human resources compared with technology.

This is according to a study carried out by LexisNexis, which shows that over a third (37%) of banks have been attacked by money mules in the last 12 months, whilst 31% have been victim to trade-based money laundering.

The sheer volume and diversity of attacks is overwhelming for many firms, as cyber criminals appear to be targeting specific weaknesses. In the last 12 months, firms report being exposed to a wave of financial crime methodologies, including the use of money mules (37%); the criminal use of third parties such as law firms, accountancy firms and estate agents (37%); trade-based money laundering schemes (31%); the proceeds of trafficking (27%); the abuse of corporate structures (27%); the misuse of digital currencies (25%); and the misuse of prepaid cards (10%). When viewed across different types of financial organisations, no one crime was mentioned by a majority.

Steve Elliot, managing director at LexisNexis Risk Solutions says: "Businesses require a far higher volume of more sophisticated data attributes that can provide better insight on the individuals and transactions involved in the complex, inter-connected and evolving financial crime ecosystem, as well as the ability to run strong analysis against these attributes. In this way, financial institutions can hope to gain a clearer picture on risks that they may not previously have seen.

"These large datasets then need to be combined with careful monitoring and reverse engineering, using outcome data, taking confirmed crimes and transaction flows and understanding how they occurred, what were the patterns of activity and flows of money, and what can be learnt from this. This type of outcome-based approach to solving problems can already be seen across a wide range of different sectors, including manufacturing and medicine."

Share Story: