Financial Institutions: Collaborate and Converge or Suffer the Consequences
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Looking to strengthen your financial institution’s (FI) financial crimes initiatives and get ahead of potential schemes and scams? Follow the steps below, and you will be well on your way.
Assess your risk as a group with leaders from different areas of Fraud, Cyber and AML.
Decide on your recipe for countering those risks.
Layer that with a top-level governance structure with all of the people on different teams dependent on each other.
Sounds easy enough, right? Not so fast. This checklist requires patience, fortitude, teamwork, leadership and the expertise of people from every department in your organization. Oh, and executive buy-in and support. But, what is at stake could make it all worthwhile. As Ryan Rasske, SVP, risk and compliance markets at American Bankers Association said, ““If you stand still, you are rapidly going the wrong way.”
In the panel discussion, “The Truth Behind Fraud, Cyber and AML Convergence”, four FI leaders talked candidly about the peaks and valleys of building a truly collaborative financial crimes unit at their organizations. Ian Mitchell, Principal— Financial Crimes Fraud Management Leader, PwC, moderated the discussion with Rasske, Donald J. Good, cyber and financial institution fraud expert; and Jeff Kearney, CFE, CAMS, executive director, enterprise fraud, security and investigations, Ally Financial Inc. Mitchell and Kearney both currently run fusion centers at their respective organizations, and Good previously ran Citigroup’s fusion center.
One way to keep your banking institution’s financial crimes unit moving in the right direction is to strategically and systematically bring your cyber, fraud and AML teams together. And not just at the same table, but as part of a functional and measurable convergence. But as Mitchell pointed out, “Is convergence even the right term?”
Rasske responded by comparing convergence and collaboration to show how even the words you choose to bring people together could hinder building a successful team. He said that earlier in his career, he used the word “convergence” when talking about bringing teams together and it severely backfired. People heard that their roles were interchangeable and dispensable. He said, “As I matured and learned a little bit more, the term collaboration became better to use. What it is implying is let’s not mess with the organization structure at the moment. Let’s learn from each other, let’s start to understand the nomenclature that we use, maybe we can share resources, technology that benefits both of our areas, but the organizational structure will remain the same.” He went on to say that convergence to him shows up in technology that could be used across multiple departments or reporting tactics that could be shared.
Some FIs like Citigroup, PwC and Ally Financial, Inc. make this collaboration happen through fusion centers, while others do it through committees. As we all know, there is no one-size-fits-all approach when dealing with fighting crime. Additionally, there is no one-person approach either. “We all have an area of expertise … but as we look at these centers and as we’ve looked at this collaboration model … we’ve all realized we can’t do it alone,” Kearney said. “If I tackle this with just a fraud lens, I will miss so much of it. I need cyber expertise. I need AML expertise. I need product expertise. All of those things have to factor in … You have got to be the champion and the leader to reach across those silos.”
After bridging those relationships and communication gaps, the biggest question that comes next is, “what exactly are those components of convergence and collaboration?” The panel laid out the following priorities:
Technology: Identify what every team is using and where there is crossover or potential crossover.
Collaboration: To maximize value to all, everyone must feel involved.
Data and intelligence sources: Create lists of sources, and identify how different departments and teams use different data sources.
People from different departments and expertise: This includes IT, HR, Communications departments, in addition to Fraud, Cyber and AML.
They also identified how you can later measure the success of your efforts:
Traditional metrics that address what is important to executive management and the organization
Intelligence that you can act on immediately
Information that helps you get out in front of crimes
Keep the course and share successes to keep everyone on the same page
Measure and identify the customer impact
As anti-fraud professionals, it is easy to work in a silo and focus on investigations day in and day out, but as this panel pointed out in just 80 minutes, the benefits of a collaborative and convergent financial crimes group reaps not just internal rewards. It prevents and detects crimes, improves efficiency and keeps you from standing still.
As Kearney reminded attendees at the beginning of the discussion, “Fraud is a business and [the] business model is a lot more agile than the ships we are sitting in. When we have to steer our ship and change something, it takes an army to do that. If you don’t start moving these worlds together in the speed that your “friends” are [the fraudsters], you will be left in the dark and experiencing significant losses.”
