New research from RedCompass Labs reveals that US banks believe they are eight months behind criminals, with the largest institutions believing the gap is as wide as 23 months.
Despite the eight-month head start, 75% of banks feel confident they can close this gap and 25% feel they could “maybe” catch up. The research highlights how banks are drastically underestimating criminals, with respondents believing that criminals take an average of four months to adapt after learning a new financial crime is being detected.
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The research, “Financial crime detection: What holds banks back?”, includes findings from a survey of 300 senior payments professionals at US banks about how financial services are addressing the multi-trillion-dollar financial crime epidemic and why only 1% of financial crimes are brought to justice.
The survey found that banks’ resources are stretched across multiple types of financial crime, as they grapple to keep up with emerging crimes, some of which are now as big a focus as the traditionally bigger ones. For example, pig butchering has become a significant concern, with 27% of banks prioritising these scams, on par with drug trafficking at 28%. The research also revealed that proliferation financing (33%), drug trafficking (31%), and cybercrime (30%) are the three most difficult crimes for banks to detect, citing a poor understanding of the personas involved as a common reason as to why.
To help banks close the gap to the criminals, RedCompass Labs has launched its RedFlag Accelerator Portal, which provides banks and financial institutions with actionable intelligence, red flags and guidance they need to understand, identify and address financial crime. It relies on personas rather than rules to help identify suspicious activity in financial data by looking for patterns in customer behaviour indicative of human crimes while reducing the likelihood of false positives.
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By GlobalData
