Rise of Cybercrimes and Anti-Fraud Efforts

In July 2024, the Association of Certified Anti-Money Laundering Specialists (ACAMS) issued a white paper titled "Cyber-Enabled Fraud and Illicit Money Flows”. This paper outlines some startling statistics related to the growth of global fraud and steps financial institutions can take to tackle cyber-enabled fraud and its related financial flows.

First of all, let’s all get on the same page. Fraud is growing by leaps and bounds and being perpetrated not only by some random guy still living in his mother’s basement, but more and more being conducted by organized crime groups. These crime groups have existed for years but now with access to the Internet, faster payment systems, generative AI, social media, and messaging apps these groups and the crimes they perpetrate have caused fraud to become a primary national security threat. Additionally, organized crime groups also rely on human trafficking and modern slavery by using these victims to conduct their fraud schemes.

The 2023 annual report issued by the FBI’s Internet Crime Complaint Center reported a 38% increase in investment fraud losses which amounted to more than $4.5 billion. But more shocking than that is a 2024 report issued by Nasdaq Verafin which indicates fraud scams and bank fraud schemes resulted in global losses of $485 billion for 2023. And these numbers are only for the fraud crimes we know about – an FTC report issued in early 2024, suggests that only 5% of fraud losses are actually reported.

As the ACAMS white paper points out, it’s imperative for there to be more integration between cybersecurity, financial intelligence, and anti-fraud measures within the banking system. This means not only within each organization but within the banking community as a whole. Report the fraud you see, get involved in local anti-fraud groups, reach out to local law enforcement, and build expertise among subject matter experts to help prevent cybercrimes and fraud. Gone are the days of simply writing off small fraud losses; financial institutions owe it to their customers, shareholders, and every victim of a fraud crime to focus their efforts on fighting back and establishing strong cybersecurity and anti-fraud programs.

To read the white paper in its entirety, click here:
https://www.acams.org/en/media/document/37742.

Authored by: Joann Lang, CIA, CAMS, CCBP