Recently, Tesco Bank was fined over 20 million dollars for failing to prevent debit card fraud which affected it and 131,000 of its customers. Although the bank’s controls prevented 80 percent of the attack’s unauthorized transactions, the FCA, the UK’s financial regulatory agency, determined the firm didn’t meet a piece of anti-fraud regulation which specifies banks to “conduct its business with due skill, care, and diligence” to prevent this type of fraud. Though Tesco Bank committed no criminal activity itself, the risk is assumed by failing to prevent the fraud was enough to warrant a fine. The recent example of Tesco bank reflects the regulatory penalties banks around the world face more and more frequently on a regular basis. Fraud itself represents a significant cost to banks every year. According to McKinsey & Companybank losses due to credit and debit card losses amounted to almost $23 billion in 2016 and could reach $44 Billion in 2025. The level of risk banking fraud introduces into a bank’s financial equation is not only dangerous for banks, but for the entire global economy. For this reason, strict regulations have been passed on both international and national levels to obligate banks to reduce these types of risk. To protect against losses due to fraud and regulatory fines, banks must understand the regulations they are subject to and best practices for compliance. Enterprise BPM software can enable banks to meet best practices by automating compliance throughout their entire operations.
