Financial Mecca Tightening The Screws On Anti-Money Laundering!

“Breaking News: Singapore to use data tracking against money-laundering”. What bearing does this headline have on a safer and more secure banking system?

The 1MDB fiasco

Let’s rewind to 2015 and 1Malaysian Development Berhad – a Malaysian fund set up in 2009 by the Prime Minister of Malaysia, with the intention of turning Kuala Lumpur into a financial hub, much like its neighbour, through strategic investments, to help boost the economy.

The Wall Street Journal broke a story in 2015 and reported a paper trail of alleged misappropriation of funds in 1MDB to the tune of US $ 700 million, traced to the PM’s personal accounts.

All hell broke loose and investigations by the US Department of Justice revealed that the quantum of laundered money is actually US $3.5 billion!

Since then, multiple foreign authorities have been involved in the investigations of this scam – something so massive that it has thrown open a Pandora’s box on the prevalent AML security systems in banks.

In May, earlier this year, Singapore, South East Asia’s leading financial centre ordered the Swiss bank BSI to shut down on charges of “suspected corruption of public foreign officials, dishonest management of public interests and money laundering”.

MAS (Monetary Authority of Singapore) and its role in banking regulations

A brief perspective on MAS and its scope of authority – states, “As Singapore’s central bank, the Monetary Authority of Singapore (MAS) promotes sustained, non-inflationary economic growth through appropriate monetary policy formulation and close macroeconomic surveillance of emerging trends and potential vulnerabilities.”

“It manages Singapore’s exchange rate, foreign reserves and liquidity in the banking sector. MAS is also an integrated supervisor overseeing all financial institutions in Singapore — banks, insurers, capital market intermediaries, financial advisors, and the stock exchange. ”


“With its mandate to foster a sound and progressive financial services sector in Singapore, MAS also helps shape Singapore’s financial industry by promoting a strong corporate governance framework and close adherence to international accounting standards.”

“In addition, it spearheads retail investor education.”

“MAS ensures that Singapore’s financial industry remains vibrant, dynamic and competitive by working closely with other government agencies and financial institutions to develop and promote Singapore as a regional and international financial centre.”

“Given the nature of its position and authority, one of its functions is to “conduct integrated supervision of financial services and financial stability surveillance.”

“Moreover with Singapore being a key financial mecca in the South Asian region, it plays an active role in international fora and is a key contributor to shaping financial regulatory norms.”

In this context, given the nature of the 1MDB scandal, Singapore’s MAS has been probing different banks for any breach of security and money laundering activities while handling transactions linked to 1MDB.

To quote a report in Shanghai Daily, “The Monetary Authority of Singapore is looking at several aspects of the UBS and DBS Group Holdings’ operations including whether they were diligent enough in knowing who their customers were and what the source of their funds was, and whether they were particularly careful in screening politically-exposed persons such as government officials, banking and legal.”

The investigation by MAS could lead to hefty fines and various other penalties if the banks under question were found to be non-compliant with the very stringent anti-money laundering rules, policies and measures.

In the past, the US has imposed hefty penalties on banks found to have lapses with money-laundering activities, tax evasion and international sanctions, but Asian regulators have found to be slow to act.

Given this context, it was incumbent upon Singapore to act tough and prove that banks in the city-state are complying with anti-money-laundering rules.

Given this back story it is but natural for the central bank of Singapore to clamp down heavily on any fraudulent activity that jeopardizes the reputation of Singapore as a mecca for banking not only in Asia but globally.

“We will make more robust risk assessments of financial institutions’ business activities, client profiles, geographical connections, transaction volumes and quality of controls,” Ravi Menon, the MD of MAS said.

According to the UN Office on Drugs and Crime, the estimated amount of money siphoned off globally in one year is 2 – 5% of global GDP, or $800 billion – $2 trillion in current US dollars. Money laundering is an epidemic and must be curbed – no question about it.

Advanced tech to the rescue

With escalating frequency and complexity of financial crimes, it is imperative for banks to pay greater attention to fraud prevention not just from a regulatory compliance perspective but for better operational risk management.

They must understand that if their systems are not preemptive in nature, then ‘post-incident’ scenarios are going to be quite common.

Banks need to work in partnership with solution innovators to combat the menace.


Given the sophistication of large-scale economic fraud., there is a need to move away from conventional channel-centric AML approaches and consider real-time, cross-channel solutions that have the capability to analyse big data and provide real-time intelligence covering Suspicious Activity Monitoring, Customer Risk Categorization, Entity Identity Resolution/Watch List Filtering, Regulatory Reporting (CTR/STR/SAR), Case Management and Entity Link Analysis.

Banks must understand the gravity of the situation and begin evaluating solutions that can quickly enable a strong and strategic fraud prevention framework to pro-actively thwart potential threats from sophisticated money-laundering syndicates.


The Rise of Cybercrime in Indian Banks

Cybercrime is a relatively new term in the lexicon of criminal terminology. Cybercrime came about after the financial sector especially banking introduced technology for its banking operations in the late ‘90s. This infographic throws light on the current scenario of cybercrime across different sectors in India, as well as answers how and why banking in India is so prone to cybercrime.


Nigeria – Online Fraud

Internet Technology for banking: A Boon or A Bane?

Internet Technology has opened up new scope for the banking systems .It has enhanced our lifestyle up to some extent and it made our lives easier. But at the same time it comes with some risks because of its associated fraud.

According to NIBSS, increasing use of ATM and E-Platform has contributed to accelerated growth of fraudulent activities. According to latest figures, the volume of fraud is going up but actual loss from the attempted fraud is reducing. To know more check out this below info graphic which reflects the fraud data related to Nigeria.


Banking Fraud in India

Banking Fraud have been in existence  from a long time in the form of insider trading, stock manipulation, accounting irregularity etc. But now-a-days the fraud in this sector has become more sophisticated and the Indian banking sector is overwhelmed with more advanced frauds.

There are many other scams prevailing like ID theft, fraudulent documentation and diversion of funds etc., but the leading scam among all of them is Non Performing Assets (NPAs).

This info graphic below reflects increasing percentage of banking fraud in India year after year.



By Priyanka Gautam 

Reach her at

CustomerXPs offers real-time, intelligent products that empower banks with instant insights enabling influenced outcomes of deeper customer engagement and fraud-free transactions.

Learn more about CustomerXPs Clari5

The carding scene of India is a topic that has been talked about for years. There are many misconceptions about carders and carding in general, but the truth is that carding is not always bad. In this blog post, we will discuss what carding actually means in the country of India, how to understand it better, and what you can do to fight against it.

5 Min Guide to Data Breaches

5 Min Guide to Data Breaches

So, how far is your data protected??

Percentage of Data breaches is enormous & this fraud increases exponentially in developed countries. As there are so many types of data breaches and it is difficult to monitor all breaches in real time because of which consumers feel insecure at the time of financial transaction. We use technology to prevent information from fraud but in such cases technology is incapable in making our payment safer. Data breaches strike the people of all ages either intentionally or un-intentionally.

According to Federal Trade Commission Consumer Sentinel Network Data Book, globally total data breaches were 1541 in 2014 & at the same time, the total data records lost or stolen were 1023,108,267 that emerged as the largest form of fraud worldwide.

This infographic below reflects this global fraud scenario.


By Priyanka Gautam 

Reach her at

CustomerXPs offers real-time, intelligent products that empower banks with instant insights enabling influenced outcomes of deeper customer engagement and fraud-free transactions.

Learn more about CustomerXPs Clari5

Essentials for Banking Fraud Management

Banking Fraud today is a wave after wave of multi channel onslaught on banks. It can strike a bank anywhere and any time-through internet banking fraud, ATM fraud, credit card fraud, insider fraud, core banking fraud, money laundering and countless other forms of fraud.

The threat of fraud keeps on growing even as banks try to curtail it by taking silo based single channel approach. If banks try to cut off card fraud by going for EMV card, a newer threat emerges in form of CNP fraud. If banks try to combat internet banking fraud, fraudsters move to stealing from mobile wallet.

Meanwhile fraud losses keep on piling, not only denting the profitability of banks but also their reputation as trustworthy institutions among their constituent customers.

We dedicate the month of August 2015 to the discussion on the shifting challenges for the banks, the efforts to curb this menace and how cross channel is the only way to fight fraud

Join the conversation with @customerxps on twitter with #starfishbanks with your views.

CustomerXPs hosts “Secret Sauce for Fighting Financial Crime” in association with CISCO

“How can I make my bank safe and keep those fraudsters out?”, “What are the latest approaches to enterprise fraud management in banks?”, “How can I pro-actively & quickly be compliant to ever changing regulatory norms?”, “Can compliance to regulations & enterprise fraud management go hand-in-hand?”

These are some common questions baffling bankers not just worldwide but especially in India, where the fraud scenario is pretty grim. According to the latest statistics published by Deloitte, 93% of bankers in India indicated that there has been an increase in fraud incidents in the last two years. Majority of the respondents also stated that the average time taken to uncover a fraudulent transaction was a little less than 6 months while they were only able to recover less than 25% of the lost amount.

In order to provide feasible solutions to such challenges, CustomerXPs, in association with CISCO, recently hosted an event “Secret Sauce for Fighting Financial Crime” at Hilton Mumbai on June 25, 2015. Senior bankers hailing from multinational banks as well as cooperative banks were amongst the invitees. The objective of the event was to discuss and exchange views on the recent trends and developments in Enterprise Financial Crime Management space.

Eminent speakers from the banking industry were invited to share their experiences on their fraud management journey and emphasize on the role of technology in combating enterprise financial fraud. Top-level executives from CustomerXPs and CISCO also spoke about the challenges faced by bankers in India and elaborated on building the bank of the future by implementing enterprise wide, cross-channel fraud prevention technology.

The event not only served as a great learning platform but also helped leaders from across the banking and technology industries to network and share ideas.

To know more about the event and its takeaways, email us at

Understanding Financial Crime, its Implications & How to Combat it

Financial crime is a serious criminal offense that is escalating at an alarming rate. Worldwide losses due to financial crime have been estimated to have crossed 3 Trillion USD. Banks worldwide have been struggling to identify and combat financial crime in order to minimize risks.

Let’s have a look at the most common kinds of financial crime prevalent today and their magnitude of threat:-

Account Takeover: Account takeover involves having a fraudster take over another person’s account, first by gathering personal information about the intended victim, then contacting their card issuer by impersonating the genuine cardholder, and asking for mail to be redirected to a new address. As per a study conducted by Phishlabs in 2013, account takeover fraud grew annually by 69% worldwide.

Application Fraud: Application fraud takes place when a fraudster uses stolen or fake documents to open an account in another person’s name.

Check Fraud: Check fraud involves making use of checks unlawfully in order to acquire or borrow funds that do not exist within the account balance. As per a report released in 2014 by JPMC, 82% of bankers surveyed reported that checks were the primary target for fraud attacks at their companies.

Internal Fraud: Internal fraud is broadly defined as an employee’s misuse or misappropriation of an employer’s resources or assets for personal gain. 72% of organizations worldwide are said to have been plagued with insider fraud sometime or the other.

Money Laundering: Money laundering is the process of creating the appearance that large amounts of money obtained from serious crimes, such as drug trafficking or terrorist activity have originated from a legitimate source. According to a recent report released by KPMG, 88% of bankers globally see AML as a priority.

Phishing: Phishing is the attempt to acquire sensitive information such as usernames, passwords, and credit card details (and sometimes, indirectly, money) by masquerading as a trustworthy entity in an electronic communication. Reports suggest that an estimated 5.9 Billion USD was lost to phishing in 2013 alone with North America being the most targeted geography.

Skimming:  The theft of payment card information is called skimming. The thief can procure a victim’s card number using basic methods or more advanced methods such as using a small electronic device (skimmer) to swipe and store hundreds of victims’ card numbers. In Europe alone, cash losses owing to skimming incidents exceeded 248 Million EUR in 2014.

Implications of financial crime are extensive. High-profile frauds & money laundering not only cause massive monetary losses but often lead to litigation costs due to non-compliance of various regulations. Apart from financial damages, organizations face irreparable blow to their reputation and hence end up losing potential customers. The only viable solution lies in implementing a strong combat mechanism that protects organizations against multi-channel fraud in real-time.

Combating Financial Crime

Initially, fraud was mostly an opportunistic crime committed by small-time fraudsters. But today, the banks and their customers face a very different world. As the size and sophistication of products, channels and services have grown, so have the types of fraud. Money laundering is also proving to be one of the most prevalent kinds of financial crime today. Therefore coming up with a robust combat strategy is essential for the management of financial crime. It involves the following:-

Alignment of Anti-money laundering & Anti-fraud efforts: Both fraud risk and money laundering are key containment areas within an organization with respect to operational risk management. It makes sense for the banks to implement a unified platform for both anti-fraud & AML that will facilitate optimization of the efforts of investigation teams.

Enabling customer state view: The new age fraud monitoring systems go way beyond fraud detection, they essentially provide fraud prevention and transaction decline solutions. For this to happen, the solution should be able to view the customer state view within the duration of the customer action completion.

Influencing outcome in real-time: Financial Crime has traditionally been detected through an array of post facto analysis software. While these systems are immensely effective in all the regulatory reporting, the one thing they fundamentally lack is to influence an outcome at point of interaction. Though most of the current generation fraud detection systems work in near real-time for processing transactions, banks need real-time fraud detection systems which can process banking events from core banking systems within milliseconds.

There is more to the ideal combat strategy. To know further, download our e-book ‘Guide to Managing Financial Crime in 2015’ here.

AML as a Service

AML as a Service

Past few months have seen a lot of activity from regulators, bankers and industry bodies alike towards curbing money laundering. Rules are becoming stringent and reporting more accurate. Then there were hefty fines levied on certain banks for non compliance with AML guidelines.

During our conversation with bankers, it consistently emerged that bankers have AML compliance as one of their top priorities. This is a clear outcome of lot of banks having plugged their technology for AML, leaving the banks which have not yet taken solid steps towards AML exposed to becoming a conduit for money laundering leading to take evasions, balck money and terror financing.

However, a major barrier these banks face is that technology investments are CAPEX which means budgeting for these investments at the beginning of financial year. It also necessitates a longer procurement cycle and boardroom discussions with other departments on redirecting budgets towards AML.

Second barrier is diversion of resources from revenue generation towards maintenance of AML technology, annual licenses,a project management team to monitor the technology and additional costs to incorporate the changing regulatory requirements.

Third barrier is upfront purchase of such technology entrenches the bank with the software vendor, making switching costs very high.

Understanding these concerns of our customers, CustomerXPs has launched Clari5 AML-as-a-Service to help them overcome the above mentioned barriers and provide a safe banking environment.

The first barrier of CAPEX is overcome by changing it to OPEX. This means that banks no longer have to make upfront investment in software, but use the ‘pay as you go’ model of monthly payments. This model of payments is more comfortable to the CIO, CRO and CFO.

Second barrier is taken care by the fact that there is no annual license, no maintenance required by the bank and incorporation of all the additional requirements come as part of the subscription.

Third barrier of entrenching with the software vendor is overcome by the fact that the subscription is monthly which means that banks can switch to other models with all risks covered.