The Fraud Hits Keep Coming from Every Direction

Detection rules, combined with machine learning, hit back in real-time to thwart fraud on all fronts. In 2020, the Federal Trade Commission received 2.2 million fraud reports from consumers, totaling $3.3 billion in losses. For 2021, the number of consumer fraud reports to the FTC increased by 27% to 2.8 million. Even more alarming, the losses associated with them soared to $5.8 billion, a 76% year-over-year increase. These are just a few of the statistics that underscore how increasingly prevalent and expensive fraud has become.

Of course, fraud affects more than the consumers in the above-mentioned FTC reports. It also causes significant financial losses and reputational harm for entities involved in the U.S. financial system, which criminals use to perpetrate their fraudulent activities.

Such entities extend well beyond traditional banks and credit unions to all those subject to the Bank Secrecy Act. They face significant regulatory fines due to ineffective or non-existent anti-money laundering compliance programs that fail to adequately detect and prevent fraud. This further exacerbates the financial toll they experience in relation to this crime.

Rising rates of fraud and the corresponding increase in regulatory scrutiny have traditional financial institutions on edge. The CSI 2023 Banking Priorities Executive Report revealed that 91% of bankers participating in our annual survey rated fraud as their greatest compliance risk. Banks and credit unions only represent one segment covered by the BSA, but their concern should be a wake-up call for the rest.

This whitepaper from CSI highlights the massive problem of fraud, identifying its most troubling fronts. More importantly, it explains how your organization can thwart fraud and meet regulatory AML compliance expectation.

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