As cases of fraud and money laundering rose during the pandemic last year, banks in the UK faced unforeseen challenges. In a new study by global analytics software provider FICO and independent research firm OMDIA, 79 per cent of respondents from UK banks said that working from home had a high or major impact on the effectiveness of their financial crime prevention.
“Just as the pandemic put huge stresses on the health care system, it put huge stresses on fraud and financial crime management teams,” explained Toby Carlin, senior director for fraud consulting at FICO. “Teams that collaborate in person and work with large software systems that have restricted access found that working from home hurt their productivity. This was compounded as the volume of fraud attacks rose.”
Challenges with Technology
The impact of having multiple software systems for fraud management and financial crime compliance was also cited by UK respondents. This was the top technology challenge for 21 per cent of UK respondents, which puts it at the top of the challenges. Almost half – 49 per cent – of respondents ranked it first, second or third among their technology challenges, the most of any challenge.
“Banks are feeling the pain of having fragmented software for managing fraud and financial crime,” said Carlin. “Even though some 80 per cent of the functions between fraud prevention software and AML software are the same, the systems are nearly always separate, and the teams are usually separate too. In our survey, 64 per cent of UK respondents said these teams don’t even report to the same person at the bank. The latest systems, such as our FICO Falcon X, provide these technologies in a single platform, which can catalyze an integrated approach at a bank.”
The FICO study consisted of 110 interviews by OMDIA with senior executives driving, managing, or directly supporting financial crime, in the US, UK, Brazil, Germany, the Nordics and Canada. The survey included senior executives responsible for fraud management, financial crime compliance and security/technology. Respondents were roughly equal from medium-sized banks and large banks.
For full survey results, view the report here.