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FICO Survey: Canadian banks most mature in tackling financial crime


September 20, 2019
By CS Staff

TORONTO — A new independent survey by research firm Ovum, on behalf of global analytic software firm FICO, has found that most banks plan to integrate their fraud and financial crime compliance systems and activities in response to new criminal threats and punishing fines, with Canadian banks having the highest level of maturity for tackling financial crime for retail banks.

The survey found major differences between Canada and the nine other countries studied in their approach to tackling financial crime. The most notable finding was that Canadian banks sat at number one on the maturity index of countries for tackling financial crime, driven by their high score in technology. The maturity index is based on five key pillars that address how businesses approach financial crime. These include strategy, organization, financial crime operations, technology platforms and data usage.

Key differentiators between Canada and other countries were flexibility, the ability to adapt to new technology platforms and a focus on long-term planning for all their financial crime functions. These factors benefit Canadian banks and help support the high scores across the other pillars.

The survey also found that over 70 per cent of banks globally are actively looking to integrate fraud and compliance, with Canada and the U.K. as the top two most ambitious in moving towards a fully integrated model.

“Financial crime is an ongoing challenge for the banking sector and Canada is at the forefront of tackling this change,” said Kevin Deveau, vice-president and managing director, FICO Canada, in a prepared statement. “In order to continue to address financial crime, banks must focus on working towards an integrated model that includes prevention controls, detection, investigation and the reporting of potential financial crime.”

Reporting of potential financial crime is an institution-specific decision. Currently, only one-third of banks globally have an integrated structure where fraud and financial crime report into the same business executive. In North America, however, there is a notable difference in approach between Canada, where 60 per cent have common reporting lines for both fraud and compliance, and the US, where only 25 per cent do.

Ovum surveyed over 100 retail banks on their priorities, challenges, and plans for financial crime, looking to assess the maturity of the sector in tackling financial crime, and ambitions towards integration. Respondents came from the U.K., the US, Canada, South Africa, the Nordics, Germany and Austria.

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