Industry experts analyse how financial crime dynamics and cybercrimes are becoming more sophisticated with digital disruption and share their views on what banks could do to address the alarming issue
December 13, 2019 | Neeti Aggarwal- An estimated $600 billion, nearly 1% of global gross domestic product, is lost to cybercrime annually
- Frauds and cyber-enabled frauds are growing as the world is changing and becoming more technology-centric
- Regulators are increasingly tightening their stance and bigger penalties are being handed out to banks
Digital disruption has rapidly changed the dynamics of the financial services industry. New players have introduced shared ecosystem-based digital platforms that provide customer-centric digital and instant services that are vigorously acquiring new customers. Banks have quickly expanded their digital channel offerings, opening doors to interconnected world, expanding partnerships with fintech players while investing readily into digital technologies.
With these major industry trends, the patterns of cyber threats and financial crimes are quickly changing.
The losses from financial frauds also continue to escalate. According to a report by The Centre for Strategic and International Studies and US computer security company McAfee, an estimated $600 billion, nearly 1% of global gross domestic product, is lost to cybercrime annually. This is significantly higher than the estimated $445 billion in 2014.
Regulators are becoming stricter by coming up with constantly evolving guidelines and raising penalties. United States handed out the biggest penalties for anti-money laundering (AML), Know Your Customer measures and sanctions amounting to $23 billion in the last 10 years, while $0.6 billion was handed out in the Asia-Pacific (APAC) sector in the same period, according to international lifecyle management firm Fenergo.
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