Insights on regulatory focus, interplay with consumer protection, and evolving risks
Explore here insights on Fraud and Financial Crime from the KPMG report Ten key regulatory challenges of 2023.
Fraud and Financial crime are on-going risks that financial service providers consistently work to mitigate. Evolving technological developments, geopolitical events, and interconnected and interdependent financial networks may increase these risks, exposures and complexity – particularly as perpetrators become increasingly more sophisticated. Regulators will continue to be concerned around such areas as terrorist financing, beneficial ownership, sanctions/tax evasion, consumer scams, and potential compliance violations.
Continued areas of regulatory focus include:
New areas of expanded regulations will include:
While regulators recognize the fraud controls needed to manage potential losses and identify suspicious activity, they will remain focused on potential violations of consumer compliance regulations, the fair processing and treatment of consumer complaints, claims, and disputes, and the clarity of consumer communication throughout the process.
Regulators will continue to assess companies in such areas as:
To better protect vulnerable populations (e.g., elderly, servicemembers, low- and moderate-income) that are often targets of fraud, regulators expect companies to:
Regulators face the challenge of mitigating complex and evolving risks that may threaten or have been identified by the Administration as issues of national security. Areas of national security risks consistent with FinCen's AML/ CFT priorities, include:
It is important to recognize that fraud and financial crime management is directly within the Governance (“G”) factor of ESG. Companies and their boards will be expected by regulators to enhance these risk and compliance frameworks for effective oversight and governance in areas such as:
With the ever-changing environment—regulatory, geopolitical, economic, financial crime, innovation—fintech and payments companies need to ensure they are protecting their customers by combating fraud, money laundering, and related financial crimes on their platforms. Companies should consider ways to responsibly leverage technology and data to monitor activity, coupled with a deep focus on customer experience—being proactive and identifying trends, and instilling a strong culture of doing the right thing.
Chief Risk & Compliance Officer, PayPal
☑ Add analytics and automation to client onboarding
☑ Eliminate antiquated technology
☑ Establish a mature conduct risk program
☑ Strengthen controls in regulatory focal areas (FinCEN priorities)
Ten Key Regulatory Challenges of 2023
Read our report for client perspectives, regulatory recaps, and actionable steps to help mitigate risk.Download PDF