Case Studies on Fraud and AML Collaboration

Fraud management and anti-money laundering represent two distinct disciplines in financial crime prevention. While AML primarily is a compliance-driven function, fraud is a risk management function driven by the organization’s risk appetite for fraud, said Ian Mitchell, co-founder of Mission Omega. These differences stem from each team’s distinct goals, oversight requirements and operational frameworks.

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“AML tends to focus on ticking the boxes to meet regulatory requirements, which sometimes misses the dynamic aspect of risk. Fraud, however, is more about managing within a defined risk tolerance, understanding you cannot stop all fraud but must protect customers and maintain a seamless experience,” he said.

Mitchell shared case studies on how fraud and AML functions have occasionally converged, reporting to a single leader for efficiency. Several organizations that have combined fraud and AML functions have benefited by sharing data. But interestingly, in many cases, these functions have since been reorganized back to separate teams, he said.

In this video interview with Information Security Media Group, Mitchell also discussed:

• The shared infrastructure and tools used by fraud and AML teams;
• Key use cases where fraud and AML collaboration is critical, such as combating investigations of scams and human trafficking;
• Challenges posed by differing operational timelines and customer interaction levels.

Mitchell, who leads fraud prevention at Mission Omega, also founded The Knoble, a nonprofit global network of experts dedicated toward fighting human crime. He is also a financial crimes advisory board member at the American Bankers Association. Mitchell previously led PwC’s Financial Crimes Unit and fraud management practice.