Financial crime risk management and compliance

Financial crime risk management is the practice of attempting to identify and prevent financial crime—for example, fraud or money laundering. While financial crime is a reality for all businesses, financial services providers such as banks, credit unions, investment firms, and insurers are the primary targets—and attacks are becoming increasingly sophisticated.

FCRM often includes setting up financial crime prevention systems, ensuring continual regulatory compliance, and flagging suspicious activity. But so far, financial services organizations haven’t managed to keep up. Criminals have grown more adept at hiding their crimes in the boom of digital transactions. And despite the best efforts of financial analysts, very little of what is stolen is ever recovered.

To gain a true strategic advantage and reduce financial risk to their organizations, financial institutions and insurers need to reevaluate every aspect of their business. This begins with identifying vulnerabilities, then implementing fraud protection, anti-money laundering, and cybersecurity technologies that can keep pace with criminals.

Financial crime risk management systems are vital to ensuring that financial resources and data are safe from cybercriminals. But for a financial crime risk management system to be truly effective, it needs to both mitigate the risk of threats to the organization and provide benefits like greater operational efficiency or an improved customer experience.

An effective financial crime risk management system should be:

There are many hurdles that can keep financial services organizations—and those in other industries—from implementing financial crime risk management solutions, not the least of which is feeling overwhelmed in the face of increasingly sophisticated attacks. Also, as financial transactions continue to shift online, protecting against attacks requires increasingly complex technological know-how.

But while it can be tempting to wait for a problem to arise before addressing gaps in security, cleaning up an attack is always more costly than preventing it in the first place. The reality is that all financial services organizations will experience a cyberattack at some point—but some will be more prepared to handle it than others.

Here are a few common challenges preventing organizations across industries from taking the necessary steps to guard against financial crime:

There are many reasons to create a financial crime risk management system. It can help prevent noncompliant activity, help your organization respond to active threats, boost regulatory compliance, improve business continuity, and build trust with customers. Fortunately, this can be accomplished in a way that also maximizes resources.

To reduce costs and save time:
 

• Take a proven, integrated approach to avoid wasting resources.
• Rationalize compliance activities that are already taking place across the business.
• Implement processes comprehensively across the organization.

Choose integrated financial risk management technologies that address multiple concerns at once, like  Microsoft for Financial Services.

Through Microsoft for Financial Services, Microsoft and its partners provide financial services companies with a trusted platform that makes it easier to:

• Manage financial services data at scale.
• Protect against fraud and other forms of financial crime.
• Stay on top of evolving regulatory compliance requirements.

Among other benefits for retail banking, Microsoft for Financial Services helps prevent fraudulent digital account creation and takeover through proactive fraud detection and biometrics. It also gives merchants the tools they need to safeguard purchase transactions, improve revenue, and boost customer retention.

Microsoft for Financial Services does more than specifically protecting against fraud. Through the Compliance Program for Microsoft Cloud, it also supports risk, audit, and compliance teams in assessing and addressing compliance, security, and privacy concerns.