COVID-related lockdowns around the world resulted in changes to the way that we work, study and live. Some of these changes were positive: better access to remote learning and working for those who want it, for example. However, there were other less positive developments, including a huge rise in cybercrime. As more people started to shop and bank online, fraudsters and criminals took advantage. Financial cybercrime, in particular, sky-rocketed.

Financial crime has become a huge problem in recent years, especially in an interconnected world. Companies and governments have all taken steps to try to address fraud and money laundering, with new regulations and requirements. However, as fast as organisations bring in new detection methods, criminals seem to develop new ways around these systems.

It is possible, though, that this could be about to change, with new applications of analytics, including machine learning and artificial intelligence.

Introducing the FinCrime project

Monica Achim is a professor at Babes-Bolyai University in Romania. She is part of the FinCrime project, which formally pursues "Intelligent analysis and prediction of the economic and financial crime in a cyber-dominated and interconnected business world.”

I invited Monica to expand on this mission. “The main objective of the FINCRIME project is to use algorithms to provide a real-time analysis of as many components of economic and financial crime as possible. We want to predict the evolution of risks at the international level, with a focus on European Union member countries.”

Monica adds that the project is founded on artificial intelligence and machine learning.

“The central pillar is the AI structure that we have developed to determine the causes and effects of direct and indirect risks. We have focused on sectors in the list of critical infrastructures, which are defined in legislation. The project\’s results will be available to organisations with responsibilities in the field, as well as to project partners and the general public.”

The program analyses which factors have the biggest impact on risk, as determinants of financial crime. It may also uncover some new relationships between factors.

“There may be underlying relationships between micro-crime and macro-crime, which are difficult to observe without using specific types of analytics and indices, such as the Gini index. Our database contains data at global, regional, national and more local levels, so we can assess risk across a range of levels. This allows us to create a ‘crime score’ for companies, industries or geographical areas.”

Exploring anti-money laundering

Babes-Bolyai University is also part of the partnership with SAS working on a study on anti-money laundering with a focus on Romania. The aim is to explore views in the business world about addressing modern money laundering challenges. Ahead of this study, SAS and the University are also carrying out an exercise to "take the pulse" of the fincrime community about how they feel about the broader range of financial crimes. Monica has been involved in this work.

“We need to know views about behaviour in relation to requirements like paying taxes. We might call this ‘tax morals’, and it is an emerging awareness in Romania. There are several angles: for instance, research shows that women are generally more ethical than men. We also want to know how views change depending on the level of experience within a company. Again, from research we know that if you stay in a company between 6 and 10 years, you know the rules, and you also know how to get around them. This means that the incentives for fraud are very high. Finding out more about attitudes can help us to understand more about risk.”

She adds that it is important that people know how to recognise what we might call fraud ‘red flags’.
“I’d like to know how much people know about the red flags around fraud. Aspects like having a very nice lifestyle, but only seeming to have a relatively small income, for instance. This is the obvious one, but there are others.”

Monica also wants to know about general familiarity with cybercrime and cybersecurity.

“We know that cybercrime is on the increase. I’d like to find out more about people’s general knowledge about cyber-security. For example, do people know that you shouldn’t click on links in unsolicited emails? What about how to keep their card details safe?”

It is fair to say that Monica is unlikely to be out of work any time soon!

“I would say that overall, classical fraud like tax evasion has decreased, but cyber-fraud has definitely increased in recent years, and it’s only going to get worse with digitalisation.”

Will you join us?

Monica and her team are fielding the FinCrime pulse survey during June. If you are a business based in Romania, we hope you take a moment to participate.