Financial fraud is an increasing problem that globally costs trillions for dollars and fuel organized crime from drug dealing to human trafficking. Financial fraud takes many forms from money laundering to social engineering schemes that take advantages of typically weak citizens among many other forms. The fraudsters become more and more advanced and money moves around in patterns that become harder and harder to distinguish from normal behaviour. Fortunately, most financial fraud passes through banks and other financial institutions, which leave digital traces origin from single transactions between a sender and a receiver. Most fraud detection today is conducted within a single bank with too little information to recognise fraud. Information have to be shared across not just the sender and the receiver but the large number of banks involved in the chain of transactions used to disguise fraud. Only strong collaboration across banks, financial investigation units and regulators can address this type of crime – or in other words – it takes a network to beat a network.
Creating strong collaboration throughout the global financial system is, however, where the problems starts. First, the banks are competing companies that are not supposed to share information about customers – the banks themselves as well as the competition authorities are concerned about this. Second, data protection regulations such as GDPR limits the use of personal identifiable information across banks. Third, the regulators are reluctant to engage in a systematic collaboration with banks to maintain arms-length regulation. Fourth, collaboration across national and regional jurisdictions is an additional barrier and may involve conflicting rules and regulation.