Case Management: The Fraud and Money Laundering Connection

When it comes to fighting fraud and money laundering, the connection between the two is critical as fraudsters work to find a way to legitimize their illicit funds. Proceeds from criminal activity related to fraud need to be laundered, so money laundering often follows soon after fraud occurs. Typically, following a successful money laundering activity, fraudsters obtain immediate access to the funds and conceal the proceeds, making them appear authentic.

The worlds of money laundering and fraud have grown more intertwined than ever and there is a growing need for financial institutions to follow unified and consistent investigations processes and controls within their fraud and AML programs. Firms can achieve significant business efficiencies with an integrated fraud and AML investigations platform.

Unified Case Management: The Benefits

Bringing together AML and fraud programs offers many benefits, including:

  • Breaking down silos between fraud and AML compliance functions.
  • Gain a holistic, singular view of suspicious customer behavior across AML and fraud.
  • Increase collaboration among all financial crime investigations teams within a financial institution. 
  • Transfer alerts and cases easily when AML and fraud are within the same investigation platform.
  • Alerts can be transferred to the AML or fraud investigations efficiently after the initial triage is complete. This results in fewer duplicate SARs and more thorough SAR filings.
  • Eliminate redundant investigations and display all AML and fraud alert history for the same subject. With access to more comprehensive information, investigators can find resolutions rapidly. 
  • Much of the data required to detect money laundering is the same data that is needed to prevent fraud. A single case management solution enables sharing common data between fraud and AML, such as accounts and subject demographic data, KYC, transactional activities or account closure.
  • The unification of data provides a holistic view of a customer’s relationship with the bank and any concerns involving the investigated entities.
  • Most of the requirements of the fraud and AML investigations functions are similar. Teams can reduce overlapping functionality in IT systems by building once and reusing the same functions across both AML and fraud.
  • Reduce costs by removing redundant processes and systems.
  • Decrease case management software license fees and maintenance costs.
  • Improve controls and consistency by having a single FinCEN SAR filing platform.

Many financial institutions are only now realizing the many benefits of a unified case management solution.

Looking Forward: A Financial Crime Division

There has recently been a growing movement toward combining the various financial crime functions including AML, CDD, sanctions, fraud and cybersecurity under an enterprise-wide financial crime division. This new trend is now encouraged by regulators like FinCEN, who has released a recent advisory encouraging institutions to promote “greater communication and collaboration among their internal AML, business, fraud prevention and cybersecurity units.”

Breaking down the siloed approach to investigations and connecting disparate information with a case management tool can be the first step toward a unified view of financial crime across the organization. A unified case management solution with consolidated alerts and a centralized data model provides the actionable intelligence and insight needed to gain a holistic view of risk, ensure oversight and maximize operational efficiency in financial crime investigations.