Fraud levels on the increase as credit crunch hits

8 December 2008

Fraud levels are increasing as the global economic crisis hits, placing additional pressures on financial institutions and law firms to have the proper Know-Your-Customer and Anti-Money Laundering systems in place, according to compliance and screening specialists Datanomic Ltd. Datanomic is seeing escalated demand for its dn:Director Sanctions & PEP (Politically Exposed Persons) Screening software as the need for systematic screening of customer data increases.

According to the National Fraud Strategic Authority, fraud is on the increase in the UK with further rises amid the turmoil in the banking industry. Mortgage frauds rake in around £700 million a year and are linked to the financing of organised crime and terrorist ‘safe houses’. Likewise, analysts cite the economic slowdown and rising unemployment are resulting in increases in crime, placing greater pressure on financial institutions and law firms to screen their customers against money laundering and white collar crime.

“In an economic downturn, the need to have adequate screening systems in place is more important than ever,” said Dr Jonathan Pell, CEO of Datanomic Ltd. “Whilst fraud has always been present, it tends to gather pace in a credit crunch and has much greater impact in an economic crisis as it directly impacts the bottom line. With white collar crime increasing and regulators levying hefty penalties against both companies and individuals for anti-money laundering lapses, the need for systematic, rigorous screening of customer databases has never been more important.”

The legal requirement to continually and accurately screen clients presents companies with new operational challenges. Inadequate information exposes organisations to both financial and reputational risk. Datanomic’s dn:Director Sanctions & PEP Screening software includes bestpractice rules templates for matching against a variety of different lists and works closely with leading legal and financial customers to deliver a highly intelligent client screening solution that is designed for ease of use by non-technical users.

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