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What we learned at the 13th Anti-Fraud Congress

organized by the Association of Financial Enterprises in Poland (ZPF) and EY Polska

As we begin 2023, we can reflect on another memorable year. Companies, governments and other organizations that have built remote processes in response to the COVID-19 pandemic have spent the past year optimizing and strengthening these systems to ensure a positive and secure customer experience. Whether it's identity theft, payment fraud or other types of fraud and financial crime, the work of detecting financial fraud never ends. Fraud experts are looking to the future to find new ways to protect their customers and their organizations from fraud and cybercriminals.

According to EY Poland's report "Fraud in the Financial Sector. Edition 2022," which was presented at the 13th Anti-Fraud Congress organized by the Association of Financial Enterprises in Poland (ZPF) and EY Polska.

(For more information on the report:

In 2021, none of the surveyed institutions participating in the report declared fraud losses of more than PLN 10 million. In 2022, 8% of banks and 7% of lending institutions declared such losses. Organizations operating in the financial industry indicate that the biggest threat to their business is fraud related to defrauding credit products and loans.

The highest rated threats in each sector are, according to respondents:

  • Banks: unauthorized transactions on customer accounts

  • Leasing companies: extortion of credit products and loans, and falsification of financial statements

  • Lending institutions: extortion of credit products and loans

The most common source of information about irregularities at a financial institution is its employees. Research clearly indicates that fraud reporting systems are the most effective way of detecting irregularities. 33% of reports come from employees.

It is worth noting that 71% of surveyed financial institutions have implemented solutions to protect whistleblowers. RAALS WBL is a powerful solution that enables named or anonymous reports. The software includes a variety of features, including anonymous two-way communication, visual case management, an easy-to-use interface, encrypted data, multiple language options, custom dashboard settings, and many others.

During conversations with experts in the field of fraud detection, I could notice that a lot of specialists point out that financial crime prevention technologies generate too many false positives.

Fortunately, advances in fraud detection technologies are giving financial institutions a more accurate and effective arsenal than ever to combat fraud and financial crime.

It is worth noting that with artificial intelligence, we can achieve incredible precision and we increase the efficiency of operations.

What can we do to effectively fight fraud?

Machine learning - a form of artificial intelligence (AI) - comes to the rescue, a powerful force for increasing both the accuracy and efficiency of fraud detection.

Supervised machine learning algorithms can learn from the data on their own, flag anything that doesn't fit the observed norm, and then, based on the knowledge gained, pinpoint anomalies that occur. A machine learning algorithm running in the background discovers potentially suspicious threats that you are not even aware of, it works even if it has not been programmed to react to this specific event.

It is worthwhile to organize training sessions that teach employees how to detect fraud, what to look for, how internal controls work and how to report fraud. Organizations that use proactive detection methods catch fraud much earlier.

Comprehensive fraud prevention and detection software can act as a strong audit team and act as internal controls. Your audit team should have the resources and authority to operate effectively and without undue influence from senior management. A 2018 ACFE study found that weaknesses in internal controls were responsible for nearly 50 percent of all fraud cases!

The most cost-effective way to reduce fraud losses is, of course, to prevent them from occurring.

If you're not sure where to start, start with a fraud risk assessment to identify and mitigate any detected weaknesses.

If you'd like an experienced team of industry people to help you create a fraud shield so that you can detect fraud faster and more effectively, contact us.

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