As an AML compliance manager, cyber fraud sits right at the heart of your risk framework. Fraudulent activity is often the entry point for money laundering. Dirty money doesn’t arrive with a label. It’s hidden in transactions that look normal, passed through accounts that passed your checks, and carried out using systems you thought were secure.
Fraudsters rely on gaps between systems and teams. So your AML strategy needs to be more joined up than theirs. Fraud teams and AML teams can’t operate in silos. If someone’s defrauded a customer using synthetic identity documents, that’s not just a customer service issue. That’s a potential AML event. You’ll need to assess whether that identity has been used elsewhere in your firm or by connected parties. You’ll also need to work out what the source of funds really was – and who might be benefiting.
This means your controls need to be proactive, not just reactive. You’re not waiting for a SAR to land before you act. You’re training teams to spot inconsistencies, reviewing digital onboarding processes, tightening access to internal systems, and questioning things that feel ‘off’ – even if the transaction values are low.
You also need to keep your data sharp. Fraudsters count on stale or siloed information. If your customer records don’t sync across departments, or if red flags raised by a fraud analyst don’t make it to your AML team, you’re at risk of missing critical links. Simple steps like cross-functional case reviews, unified alerts, and shared risk scoring models can make a big difference.
On the regulatory side, the expectations are rising. UK regulators want firms to demonstrate that cyber risk is being treated as part of financial crime risk – not separately. That means you need to be confident that your fraud prevention systems are feeding into your AML controls, and vice versa. When there’s a breach, you’ll need to show more than just that it was patched. You’ll need to explain what financial crime controls were impacted, what data might have been compromised, and how your risk model has adjusted in response.
Finally, cyber fraud is increasingly used as a laundering method in itself. Think fake invoices, false refunds, and online mule recruitment through fake job adverts. These are indicators that your institution might be part of a wider laundering chain. If you’re not tracking them properly, you’re missing out on critical intelligence that could shape your broader AML response.
Bottom line: cyber fraud isn’t a tech issue. It’s a financial crime issue. And for you, it’s a call to action. Tighter controls, smarter collaboration, sharper data – and a mindset that sees every fraud attempt not as an isolated case, but a signal worth investigating.
