Financial institutions

Financial institutions are not using technology enough to fight fraud | News

WASHINGTON, January 13, 2022 /PRNewswire/ — Despite a market saturated with advanced technology tools, many financial institutions struggle to effectively deploy and integrate anti-fraud solutions into their risk mitigation frameworks. As a result, new, evolving, or unforeseen threats continue to pose risks to financial institutions of all sizes. These are the findings of an in-depth survey and new report released today by Guidehouse, one of the world’s leading providers of procurement and commercial advisory services, and conducted by American Banker/Arizent.

Guide to Optimizing your anti-fraud technology The report, based on a survey of 128 senior executives who contribute to anti-fraud strategy in banks, wealth management, or for money transfer or fintech organizations, reveals an overreliance on a “set it and forget it” approach to anti-fraud technology. With limited resources in the age of the pandemic, it has been difficult for financial institutions to continue to combat the innovative new fraud schemes that criminals continue to employ. As a result, these companies face lost profits, an erosion of customer trust and public reputation, and possible scrutiny from regulators.

“This survey and our analysis underscores how critical it is for public and private sector clients to align their technology solutions with broader risk mitigation frameworks across the enterprise,” said Ellen Zimile, Partner and Head of Financial Services Segment at Guidehouse. “In our work with our clients, we leverage the expertise of leading fraud and fraud technology specialists and bring a collaborative approach to risk management that ensures a tailored, flexible and forward-looking approach. fraud prevention.”

A third (33%) of respondents indicated that they were “somewhat” or “not at all” effective in the ongoing maintenance, operation and governance of their fraud mitigation programs assisted by technology; notably, 37% of all financial institutions believe they are not sufficiently prepared to assess or respond to the risks of new and evolving fraud threats to the business. These results come even as 66% of all respondents identify changing fraud patterns as their biggest challenge.

“Some organizations believe that fraud prevention technologies will mitigate most fraud risk, without first understanding their exposure to fraud or the resources they will need,” observed Salvatore La Scala, partner and leader of Guidehouse’s Global Investigations and Compliance practice. “Effective solutions deploy an integrated set of tools that can be adjusted to address the unique vulnerabilities an organization faces at different times, but only when properly aligned with its specific risks.”

Evaluation, investment and coordination essential to success

Technologies of all types, but especially anti-fraud solutions, are considered an effective and sophisticated means of preventing an institution from suffering financial loss due to fraud. Nevertheless, 35% of respondents indicated that they did not have the right level of investment in fraud mitigation tools. Additionally, 38% of institutions say that outdated technology or organizational infrastructure are major challenges to fraud prevention, putting some institutions behind their market counterparts who are also struggling with increasing fraudulent activity.

A better way forward, according to LaScala, would be for those responsible for anti-fraud activity to ensure that well-developed benchmarks are in place so that the effectiveness of technology solutions can be accurately and comprehensively assessed and optimized. .

“A more holistic approach to risk management should encompass anti-fraud technology, ensuring that all the tools available to an organization will also be used in a complementary way,” LaScala said.

In the report, Guidehouse explains that to use technology effectively, organizations need to understand the unique strengths and weaknesses of their internal controls. A thorough, fluid, and ongoing fraud risk assessment process is essential to developing a comprehensive and effective anti-fraud strategy that can combat known and unforeseen risks.

According to the report, organizations that align technology and anti-fraud efforts will benefit from better financial results and customer satisfaction. Fraud risk programs should no longer be a cost center, but rather a competitive advantage.

Late to (third) party

An overwhelming 92% of financial institution respondents said they depend on third-party vendors for the maintenance, operation, and governance of their anti-fraud efforts.

Vendors are more exposed to the threat landscape as they deal with organizations of different sizes and specialties and work with fraud prevention technologies throughout the program, Guidehouse observes. This holistic view of fraud threats gives them a unique perspective to help organizations respond to dynamic threats.

Those interested in learning more about the results can download the report here: Optimization of your anti-fraud technology.

Methodology: Optimizing your anti-fraud technology is based on an online survey conducted by Arizent Research/American Banker on behalf of Guidehouse in July 2021 among 128 respondents who contribute to anti-fraud strategy in banking, wealth management, or for money transfer or monetary technology organizations.

About Guidehouse

Guidehouse is a leading global provider of advisory services to the public sector and commercial markets, with extensive risk management, technology and advisory capabilities. By combining our public and private sector expertise, we help our clients address their most complex challenges and overcome significant regulatory pressures focused on transformational change, business resilience and technology-driven innovation. Through a range of consulting, advisory, outsourcing and digital services, we create scalable and innovative solutions that help our clients navigate complexity and position them for future growth and success. The company has more than 12,000 professionals in more than 50 locations worldwide. Guidehouse is a Veritas Capital portfolio company, led by seasoned professionals with proven and diverse expertise in traditional and emerging technologies, markets and agenda issues that drive national and global economies. For more information, visit

About Arizent Research

Arizent delivers actionable insights through full-service research solutions that leverage their first-party data, industry SMBs, and highly engaged communities in banking, payments, mortgages, insurance, finance municipal, accounting, HR/benefits and wealth management. They have leading brands in financial services, including American Banker, The Bond Buyer, PaymentsSource, Financial Planning, National Mortgage News, and in professional services, such as Accounting Today, Employee Benefits News and Digital Insurance. For more information, visit

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