Cross-Border Fraud Prevention Tactics

📈 The latest KPMG briefing on fraud and financial crime outlines significant shifts in enforcement strategy under the current U.S. administration. The message is clear: expect recalibration, not relaxation. Financial crime compliance (FCC) teams must prepare for heightened scrutiny in high-risk areas, tailored regulatory adjustments, and expanding obligations for foreign and cross-border activity. 💸 Fraud Tops the Agenda With fraud losses surpassing $12.5 billion in 2024 (up 25% YoY), regulators are pivoting toward government fraud (e.g., contractor abuse, healthcare fraud), consumer scams, and white-collar crime that undermines market integrity. A suite of executive orders now mandates data sharing, disbursement pre-certification, and digital modernization to close fraud gaps. 🪙 Crypto Enforcement: Strategic Refocus The DOJ has disbanded its National Cryptocurrency Enforcement Team, redirecting resources to tackle fraud with criminal intent—especially where crypto is used to support terrorist financing, cartels, or investor scams. This shift emphasizes risk-based targeting over blanket enforcement, but FCC teams should remain alert to sanctions evasion and illicit DeFi flows. 🛡️ AML/CFT: Narrowed Scope, Sharpened Focus Tailoring is underway. Proposed reforms suggest: • Narrowing Beneficial Ownership (BOI) rules to foreign entities • Expanding cross-border reporting thresholds for MSBs • Increasing FinCEN’s enforcement around geographic targeting orders • Requiring mandatory risk assessments under enhanced BSA/AML program rules For institutions handling cross-border flows or digital payments, these updates signal deeper surveillance and accountability expectations. 🤝 Bribery and Corruption: Repositioned, Not Removed A temporary pause on new FCPA investigations under EO 14209 reflects a realignment toward cartel-linked bribery and national security risks, not a retreat. Internal compliance programs must still uphold robust controls, particularly in emerging markets and high-risk procurement chains. ⚙️ Sanctions: Extended Reach, Longer Records The U.S. Treasury is extending recordkeeping to 10 years, expanding sanctions to support entities (including those indirectly aiding evasion), and disbanding some task forces. Public-private partnerships will drive deeper cooperation, especially on regional evasion networks tied to Iran, Russia, and China. 🧭 What Should Compliance Leaders Do Now? • Reassess exposure to foreign ownership, crypto, and cross-border activity • Update fraud typology libraries with new scams and methods • Prepare for recordkeeping and BOI rule revisions • Enhance screening for third-party enablers and indirect actors • Tighten controls on programs linked to public funding or vulnerable populations #FinancialCrimeCompliance #AML #Sanctions #FraudPrevention #Regulatory

Threat Intelligence is widely utilized in cybersecurity applications like DFIR, threat hunting, and red teaming, etc. However, one often-overlooked but critical application lies beyond traditional cybersecurity: anti-fraud operations. In many organizations, anti-fraud teams operate separately from cybersecurity teams, often with minimal information sharing about cyber threats. This siloed approach can lead to missed opportunities for identifying and mitigating fraud. Ideally, there should be a fusion of fraud prevention and Threat Intelligence to strengthen defenses and improve outcomes. A great starting point to integrate these efforts is by extending your Priority Intelligence Requirements (PIRs) to include the needs of your anti-fraud team. Collaborating with them to understand their requirements is essential for a seamless fusion of efforts. Fraud isn't limited to the banking industry. If you’re in retail, aviation, travel, e-commerce, food services, or any industry with a loyalty program, you’re a potential target for fraud. Fraud has emerged as one of the most critical challenges for businesses worldwide, causing billions of dollars in losses annually in developed economies. Threat Intelligence can bring value to anti-fraud teams by: - Understand which actors are most active and the fraud schemes they commonly employ. - Detect and analyze unique behaviors of threat actors to fine-tune fraud detection systems. - Identify and mitigate risks associated with breached consumer accounts. - Link fraudulent activity to specific groups or actors for better context and response. - Pinpoint merchants whose systems may have been breached and used in fraudulent transactions. - Track and research new platforms used for scams or phishing to preempt attacks. - Study malware to enhance detection capabilities within end-user applications and devices. Fraud detection and prevention should not operate in isolation from cybersecurity. A unified approach that blends Threat Intelligence with anti-fraud strategies can significantly enhance your organization's ability to combat fraud effectively. Start by fostering collaboration between teams and expanding your intelligence priorities to align with the specific threats your industry faces.

🚨 Friday AML & Financial Crime Compliance Tips EDD in Cross-Border Transactions 🌍💰 As global transactions grow in volume and complexity, compliance teams must strengthen Enhanced Due Diligence (EDD) measures to mitigate financial crime risks. Cross-border transactions are a prime target for money laundering, terrorism financing, and fraud. 🔍 Key EDD Measures for Cross-Border Transactions: ✅ Verify Ultimate Beneficial Owners (UBOs) – Always look beyond the immediate transacting party. Hidden ownership structures often mask illicit actors. ✅ Assess Jurisdictional Risks – Transactions involving high-risk countries or those with weak AML regulations demand extra scrutiny. ✅ Monitor Unusual Transaction Patterns – Look out for round-tripping, rapid movement of funds, and inconsistent business activities. ✅ Leverage AI & Transaction Monitoring Tools – Automated solutions help identify anomalies in real time and reduce false positives. ✅ Document & Justify Your Decisions – Ensure audit trails for all high-risk transactions to support regulatory compliance. 💡 Why This Matters: Failing to conduct proper EDD in cross-border transactions can expose financial institutions to hefty fines, reputational damage, and regulatory action. Compliance professionals must adopt a risk-based approach to safeguard their organizations and the financial ecosystem. 📢 What are the biggest EDD challenges you’ve faced in cross-border transactions? #EDD #CrossBorderTransactions #AML #FinancialCrime #Compliance #RegTech #FridayComplianceTips