Rethinking financial crime prevention: Building resilience in an unpredictable world
As digital finance expands, so do the risks. Evolving fraud tactics are challenging legacy systems and exposing financial institutions to new vulnerabilities. This report explores how banks and fintechs can adapt, using real-time intelligence, AI-driven detection, and outcome-based metrics to outpace financial crime in an era of unpredictable customers
AI-generated scams. Sophisticated synthetic identities. $485 billion lost to fraud in 2023 alone. The financial services landscape is not just complex—it’s being weaponized. And legacy risk models are struggling to keep up.
This volatile environment is further exacerbated by evolving regulations, technological advancements, and dynamic customer behaviors. As a result, financial institutions often find themselves reacting to challenges rather than proactively mitigating them, increasing the risk of financial crime (FinCrime).
So how can financial institutions build trust in an increasingly unpredictable global financial ecosystem? Savvy institutions are starting to rethink FinCrime prevention. Frost & Sullivan forecasts the Fraud Detection & Prevention market to reach $24.9 billion by 2027, driven by increased investments and recognition of FDP as a critical security layer.
We recently joined industry leaders at the Ecosystm Roundtable to delve into the future of financial crime risk management. You can download the full report for more insights or explore key takeaways from discussion below.
1. The Trust Paradox and shifting consumer behaviour
The number of financial consumers continues to grow, with 53% of the world’s population expected to use digital banking by 2026. However, as digital finance expands access, safeguarding trust becomes harder. The shift towards digital banking has amplified institutions’ exposure to sophisticated financial crimes.
And as financial institutions welcome newer, less predictable customer segments like cryptocurrency users and digital-first borrowers, it becomes more challenging to assess trust. Traditional risk models, relying on static detection rules, often struggle to accurately capture intent or behavior patterns. They may then miss unusual activity or generate false positives—according to a PwC report, 90 to 95% of all alerts generated by transaction monitoring systems (TMS) are false positives.
That’s why institutions must adopt flexible, intent-based risk models that evolve alongside customer behavior. By integrating behavioral analytics, machine learning, and contextual data, these models move beyond rigid rules to understand customer intent. This enhances detection and improves customer experience, safeguarding customer trust in the digital age.
2. Rethinking metrics: From speed to adaptability
In the early days of FinCrime prevention, financial institutions primarily focused on speed and accuracy, aiming to quickly churn through vast quantities of data while adhering to compliance checklists. However, the reality is that these traditional KPIs no longer capture the full picture and are insufficient for increasingly complex and adaptive threats.
Today’s institutions need to go beyond speed and accuracy and analyse whether the right threats are being identified and if their systems can adapt to new typologies and emerging risks. Consider incorporating effectiveness metrics such as: Are we detecting new forms of fraud? How quickly can we retrain systems in response to emerging threats? Are our alerts actionable, or just noise? Only by answering these can institutions build resilient fraud prevention systems.
The power of this adaptable approach is evident in our recent client collaboration.
● Client Profile: World's largest US Crypto Virtual Asset Management Organization, with over $400 billion in assets and 12% of all Bitcoin.
● Challenge: Rising FinCrime risks amid industry consolidation.
● TP’s Solution: Crypto-native fraud experts combined with AI-powered alert triage.
● Outcome: False positives reduced, complex frauds surfaced faster, 24% YoY revenue growth despite market pressures.
AI ≠ Autopilot: The Case for Human-AI Collaboration
Building effective FinCrime systems often hinges on advanced technology. For instance, more firms are embracing AI to reduce manual KYC checks, streamline document verification, and flag suspicious activity in real time. Ecosystm research shows 80% of financial services leaders are actively evaluating advanced technologies for AML and fraud detection.
However, AI tools are not foolproof, and automation alone isn’t enough. Today, fraudsters skillfully leverage synthetic identities, AI-generated documents, and social engineering tactics that bypass even the most advanced algorithms. Without adaptive controls and human oversight, automation can create dangerous blind spots.
This is where TP brings a distinct advantage: a human-in-the-loop approach. By intelligently combining AI-powered tools with highly trained fraud analysts who specialize in domain-specific threats, our method effectively bridges the blind spots of pure automation. Human reviewers contribute essential context and critical judgment, particularly when fraud indicators are subtle or rapidly evolving.
This human-AI synergy is demonstrated by our partnership with a major Middle Eastern financial institution.
● Client Profile: Islamic bank offering a broad suite of financial services.
● Challenge: Manual processes, fragmented compliance, and fraud vulnerabilities hindered scaling operations.
● TP’s Solution: Centralized banking operations team supported by automation.
● Outcome: 99% of payment requests processed in under 2 hours, zero financial incidents, stronger fraud controls.
Rethinking financial crime prevention: Woman securely shopping online using her credit card and smartphone
3. Breaking silos: Why collaboration is the new edge
Fraud doesn’t occur in isolation, and neither should its prevention. As fraud typologies evolve, insights from across the broader ecosystem become indispensable. Yet, threat intelligence is too often siloed within departments or firms, leading to blind spots and delayed responses.
That’s why leading institutions are actively embracing cross-institutional collaboration, informal peer-sharing networks, and regulator-led forums. The faster threat intelligence flows across the industry, the more resilient the entire ecosystem becomes. Institutions that invest in these collaborative models will be significantly better prepared for future challenges and contribute to a more robust global fight against financial crime.
4. Tailoring solutions to real-world complexity
Fraud prevention isn’t one-size-fits-all. The regulatory landscape, business models, customer profiles, and specific fraud vectors can vary dramatically across different regions and organizations.
Frost & Sullivan’s latest report highlights the need for APAC BFSI firms to tailor strategies to regional economic and regulatory differences. With more businesses and platforms involved in transactions—especially driven by trends like open banking and central bank digital currencies (CBDCs)—there is a growing imperative for continuous investment in network security to address new threats.
Hence, banks are increasingly forming strategic partnerships with specialized providers to deploy tailored banking solutions, as suggested by Everest Group. These collaborations aim to enhance process efficiency, bolster user security, and address specific needs such as fraud prevention.
TP, for instance, customizes solutions to each client's unique operating environment, ensuring fraud prevention strategies align with real-world complexity, not just compliance checklists. With operations spanning over 80 countries, we bring deep local compliance expertise and a scalable global footprint. This positions us as a trusted partner for BFSI clients navigating both regional regulatory nuances and global growth ambitions.
Final thoughts: Building resilience, not just compliance
In a world where fraudsters are tapping into increasingly sophisticated tactics, compliance alone won’t cut it. Financial institutions must move beyond checklists to dynamic, context-driven risk assessment. Because in this new era of finance, the ultimate goal isn’t just ticking boxes. It’s building trust that lasts.
Ready to transition from a reactive stance to one of robust resilience?
TP’s integrated FinCrime-as-a-service model offers a blueprint for future-ready fraud prevention. Contact us to get started today.
