Banks Begin Information-Sharing Campaigns Against Fraud

Financial institutions (FIs) in several countries have begun to launch information-sharing platforms in an effort to better spot fraud and money laundering.

Research overseen by the United Kingdom think tank the Royal United Services Institute has found at least 15 information-sharing projects around the world, The Wall Street Journal (WSJ) reported Monday (July 25). And while most countries don’t let banks share information, recent efforts have yielded substantial success in identifying crime.

Among these efforts is Transactie Monitoring Nederland (TMNL), a collaboration launched in 2020 by the Netherlands’ five biggest banks that lets them pool encrypted transactional customer data, according to the report.

Working with banks and their country’s financial intelligence unit, TMNL has created models that let it share data about possible unusual transaction partners that could signal terror financing or money laundering, the report stated. Privacy-enhancing technology allows TMNL to send out alerts from this data while keeping client information secret.

CEO Norbert Siegers said in the report that the platform has generated about 2,000 alerts, which were sent to relevant banks for more investigation.

“We are basically an analytics factory, where we create [anti-money laundering] models to find potential patterns, but the investigation of the alert is still done by the banks,” Siegers said, per the report.

In some cases, alerts generated by TMNL’s models have led to banks filing suspicious activity reports with the Dutch financial intelligence unit, which led to additional investigation by law enforcement, Siegers said in the report.

These collaborations come at a time when several security professionals dealing with fraud say they want to see their employers invest more in fraud prevention and identity protection, as recent research by PYMNTS has found.

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A vast share of these workers — 81% — said they think FIs could do more to fight fraud, and 34% said the most significant investments an FI could make are in new tools to deal with financial crime.