It’s getting increasingly difficult to stop financial fraud. According to data presented by Lithuania’s law enforcement agency, while reported fraud increased by 13% since 2018, the number of solved cases plummeted by more than 70%. These statistics are concerning for everyone, not just the victims themselves. Rising crime levels drain resources from the state and threaten our wellbeing.

As criminal gangs become wealthier, they have more money to invest in their scams. Today, fraudsters are leveraging sophisticated artificial intelligence tools, like deepfake technology, to coerce others into sending even more money. Deepfake phishing exploded by 3,000% between 2022 and 2023, according to data from Onfido. But the most prevalent crime is still Authorised Push Payment (APP) fraud, accounting for over 60% according to the Lithuanian Criminal Police Bureau.

The details of the financial fraud were presented to fintech leaders by Greta Bokmotaitė, Head of the Pre-Trial Investigation Coordination and Control Unit for the Lithuanian Criminal Police Bureau. Together with Fintech Hub Lithuania, Revolut and the Police, we recently hosted an event to talk candidly about the state of financial crime, and how we can collaborate for solutions, including through information sharing.

Here are some of my most profound takeaways from the event:

1. Law enforcement encourages information sharing between financial institutions

While financial institutions should rightly be cautious about breaching data laws for customers, they are encouraged to share information about suspicious activity with each other and the police. This can include times, dates, IBANs, behaviour patterns, and other transaction identifiers.

Starting from August 2024, this will be possible in Lithuania.

*You can read more about the upcoming legislation here, or talk to us about how our information sharing tool, Salv Bridge can help your organisation stay compliant. *

2. Behaviour analysis can help to identify criminal activity

Another suggestion from the Lithuanian police is a closer analysis of both suspicious client behaviours and money mule paths. Money mules operate by moving illegal funds from one institution to another, in a process known as “layering”. Understanding more about the routes they take could reveal vital information, helping to break the flow.

Again – and you may be sensing a theme here – this method relies on information sharing between financial institutions. New technology solutions like Salv Bridge can track, flag and share vital information in a fully compliant way.

3. Financial institutions can do more to stop criminals masking their true identities

Greta highlighted that one of the main barriers preventing the police from solving cases is the use of false identities by payees. There are already Anti-Money Laundering and Know Your Customer regulations in place to prevent account holders from laundering money. But clearly, more diligence is needed from financial services. In the past year, authorities have clamped down on fintechs who are not doing enough to prevent money laundering, even by removing their licences.

4. Criminals use grooming and pressure tactics

Scammers have different techniques to coerce innocent victims into handing over funds. Some apply grooming tactics, as in the case of romance scams. For this, they will usually prey on vulnerable people and mimic the victim’s circumstances to establish a connection. From the Tinder Swindler to deepfake con artists, The Yahoo Boys, romance scams are wide and varied.

For APP scams, criminals will usually apply time pressure too, so that the victim panics into sending the funds quickly.

5. Technology can break the scammer’s spell

Technology has an important role to play in dismantling the tactics of scammers. As Revolut’s Head of Financial Crime and Compliance, Giedrė Žukauskienė, highlighted, technology can slow down suspicious transactions with warning messages that customers need to read. This can help break down APP fraud. There are steps that financial services can take to prevent unauthorised fraud, and information sharing is one of them. Collaborative tools like Salv Bridge allow institutions to share investigation conclusions, amplifying the crime-fighting effect by 10x.

Here is our list of the 10 best information sharing tools already available to financial institutions.

Firms like Revolut also use geo-tracking to see if the mobile device is too far away from the bank card, indicating that it could be stolen. And virtual cards which expire help to reduce fraud too.

It’s this kind of creative thinking that can help keep the industry a safe harbour for customers.

I would like to thank Greta, Giedrė, Fintech Hub Lithuania for an insightful and important morning. To join more of our events, and help beat financial crime together, please follow us on LinkedIn.

Or you can book a demo to see how Salv Bridge can improve your compliance.

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