Enterprise-wide – scaling up fraud risk management

An increasing number of financial institutions are starting to address fraud risk management at an enterprise level. Tom Salmond of Ernst & Young examines the drivers, benefits and implications.

Tom Salmond is a manager in Fraud Investigation & Dispute Services, Ernst & Young Financial Services. Specialising in fraud risk management and financial crime systems, Tom has worked on numerous projects involving data analytics and transaction monitoring systems and advises clients on strategy development, systems selection and implementation.

The fraud landscape is changing rapidly and many financial institutions are seeking to adopt a more proactive, intelligence-led approach to managing fraud risk. In order to cope with increasing business volumes, technology has been used for a number of years to monitor transactions and assist with the prevention and detection of fraud. Such systems have traditionally been designed to cover specific fraud risks, products or delivery channels, although as the demand on these systems continues to increase, a more strategic approach is being called for. This approach increasingly involves implementing systems that operate across the business and provide greater flexibility to integrate new data sources and detection models in response to new threats. At the same time, there is growing interest in being able to take advantage of investments in systems across other risk areas such as filtering payments for sanctions and anti-money laundering to come up with an integrated approach that covers several areas of financial crime.