Protecting ourselves and our customers in the fight against cyber criminals.
Financial crime is commonly thought to include fraud, money laundering, terrorist financing, bribery and corruption, insider trading, and cybercrime as offenses . In an era dominated by digital technologies, the fight against Financial Crime has become a top priority for organisations and governments globally.
Technology as an enabler
As technologies become more interconnected through cloud services and AI, together with the increasing volume of available data, the threat landscape of financial crime is a huge challenge for all Australians.
One of the most pressing issues in financial crime is the constant battle against cyber threats. Sophisticated tactics, such as malware, phishing, and ransomware are used to infiltrate systems and steal sensitive information. Scammers constantly bombard us with e-mails and SMS’s tempting us to click on links, often using threat tactics or offering deals too good to be true.
Whilst new and emerging technologies like AI and the IoT bring unrivalled convenience and connectivity, they open the door to new security risks, making it vital that fighting financial crime remains a top priority for individuals, businesses, and governments worldwide.
The stats
In 2023, according to an ACCC report “Targeting Scams” Australians made over 601k scam reports which was up by 18.5% on the year before (507k). However, even with more reports lodged, Australians still lost a staggering $2.74b to scammers.
NSW and Vic were the states with the highest reported scams and Jan & May (2023) were the top 2 months where losses occurred. Scams targeting investment is by far the largest type of scam, these are typically targeted through phishing (e-mails and SMS) and unfortunately people over the age of 65 are the most vulnerable and susceptible to fall victim to these scams.
Whilst the financial loss for Australians is huge, for businesses, scams have the additional impact of eroding trust and damaging brand reputation.
Meeting the challenge head on
To address these challenges, organisations and governments are now pushing financial crime as a key strategic priority. This includes implementing robust security measures, such as encryption, multi-factor authentication, and intrusion detection systems, to fortify defences against cyber threats. Awareness training for employees across all lines of defence along with customer education, is crucial in mitigating the risks associated with human error, negligence and ignorance.
The sharing of information and collaboration amongst industry sectors, government and consumer advocates is essential in combating cyber threats effectively. Public-private partnerships enable the exchange of threat intelligence and best practices, empowering organisations to stay ahead of emerging threats and vulnerabilities. Similarly, international cooperation plays a vital role in addressing global cybersecurity challenges.
Protecting against financial crime requires a multi-faceted approach that combines technical measures, user awareness, and organisational policies. It is not only a technology issue, but a fundamental aspect of modern life in the digital age. By investing in robust security measures and fostering collaboration among industry peers, we can build a safer and more resilient first line of defence. Failure to do so threatens the stability and security of our increasingly interconnected world.
Key take-away
As customer advocates, here are a few of my top strategies that can be readily introduced into your day-to-day activities within your organisation:
- Authentication – Utilise strong, unique passwords for all accounts and enable multi-factor authentication (MFA) wherever possible. MFA adds an extra layer of security by requiring users to provide multiple forms of verification, such as a password and a code sent to their mobile device.
- Education – Provide comprehensive financial crime awareness training to all employees and make it compulsory. Cover best practices such as phishing awareness, password protection, and social engineering tactics.
- Educate your customers so they are better equipped to recognise and report suspicious activity and “think before they click”.
- Procedures and Processes – have all procedures and processes mapped out and documented. Identify where the risks are (human, technology, rules based etc..) and either reassess your processes and/or review and test your mitigation controls.
- Risk register – compile a list of all the financial crime associated risks that your team faces. Categorise and describe each risk. Carefully assess the likely-hood and the impact of what would happen if the risk occurred and then reassess against the controls you have in place. What is also important is to assign a risk owner and empower them to ensure controls remain fit for purpose.
- Reward & Recognition – One way to make a positive change is to offer a positive incentive. Once you’ve identified your risks and your mitigating controls you might find some of those controls are reliant on people. Protecting your customers is part of the service, we typically offer up incentives on service so why not include risk-based recognition to compliment what you already have?
- Research & resources – There is extensive research, case studies, white papers and more on this topic. The more you search, the more information you will find. The more you find, the better armed you will be and better equipped to impart your knowledge on to others.
- Reach out – The Auscontact Association is your vehicle to other organisations, industry peers or vendors who provide a full raft of services. There is a wealth of knowledge across the Auscontact Association membership so make sure you take full advantage of yours.
By implementing these strategies and adopting a proactive approach to financial crime, organisations can significantly reduce their risk exposure to financial loss and brand & reputational damage. But beyond that they can protect their customers from the personal devastation that the $2.74b in losses of 2023 delivered.
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