Asia Pacific banks lag in integrating fraud compliance functions: FICO survey

Chennai: A recent survey by global analytics software firm FICO has revealed that only 18 per cent of Asia Pacific (APAC) banks have a strategic plan to fully integrate their fraud and anti-money laundering (AML) compliance functions, even though 71 per cent say that convergence will improve the ability to stop fraud and financial crimes.

This puts their planning efforts significantly behind that of their Western peers. In an earlier survey commissioned by FICO in 2019, 24 per cent of US banks and 47 per cent of UK banks had strategic plans to fully integrate functions. FICO estimates that 80 per cent of the functionality to do fraud checks and AML checks on a new account opening is the same.

The survey found that most Asia Pacific banks (38 per cent) are instead actively looking at a more tactical approach, actively sharing resources where synergies exist. Examples of this being the sharing of data, controls or staff. Just 12 per cent of banks in both the US and UK said they were pursuing this approach.

‘What we are seeing in Asia Pacific is most likely the fast-follower mentality coming through,’ said FICO’s Compliance Lead in Asia Pacific, Timothy Choon. ‘Many banks in region are closely watching those who are making the change overseas to see what lessons they can learn from first-movers before embarking on a similar program of change.’

When asked about current levels of integration, most banks in Asia Pacific admitted they currently had siloed operations. In terms of which areas currently operated separately or had low levels of collaboration, 95 percent nominated controls, 94 percent detection systems and 91 percent investigative systems, the survey said.

NT Bureau