Everything you should know about Financial Crime Management



It is high time for the financial institutions to emphasis on the risk involved in carrying out their business. In the current scenario, the financial firms were under greatest threat of financial crimes. This had led them to have a periodic check over the security controls practiced in their firm on a periodic basis. In this article, we are going to discuss the financial crime management and the ways to overcome the threats faced by the financial institutions.

What is Financial Crime?

This is a type of crime committed related to the financial sector. It is termed as a non-violent offense since it does not involve any bloodshed or any physical violence. This type of offenses targets only the financial institutions. Any crime, which is associated with the financial sector, is termed as financial crime. There will be a great loss in the economy of any firms if they were subjected to financial crime.

Who commits a financial crime?

Some of the financial criminals have been listed below

  • The criminals who were not related to an organization like the terrorists in that country, any frauds who earn money only through this type of crimes, any cyber-related criminals who target the financial network for bulk profits due to their fraudulent activities.
  • The top-level politicians in the country use the wealth of the country for their benefits.
  • The senior-level officials in the organization prepare the financial statements in order to make more profit through their fraudulent activities.
  • An employee within the organization misleads the financial team in order to earn money illegally apart from the firm’s salary.
  • Any individuals who were related to the firm as a customer, contractor, vendor etc also have a possibility to involve in the fraudulent act against the firm in order to make money for their own benefits.

Types of financial crime

There are various forms of financial crime and they are

  • Credit card fraud
  • Identity theft in a firm
  • Tax evasion
  • Embezzlement
  • Cyber attacks in financial firm’s sites
  • Money laundering
  • Corruption at higher official, Political level

Implement practical preventive measures

Some of the practical preventive measures have been discussed below.

  • Risk assessment analysis: The financial institutions should conduct a complete study of the risk, which is present within their firm. It should include working procedure, data handling from high to low level of employee, transaction method etc. The first step to prevent financial crime is to get a wide knowledge about the risk involved within the firm. The better analysis will result in an optimum preventive measure. Forecasting the risk enables the firm to prepare themselves from safeguarding their sources against the financial crimes.
  • Build a team: The financial institution should form a team of members in order to monitor external interruptions. They should be able to sense the attacks immediately in order to prevent greatest financial loss in the firm. They must have a wide knowledge about cyber crimes, money laundering, data theft etc in order to figure out the measures swiftly to avoid the fall of the economy in the organization. Moreover, the team of members should be up to date with technical skills in order to handle the advance type of threats.
  • Improve data handling: The firm should design a systematic approach in handling data. Though the volume of data is enormous, it is a great challenge for the financial institution to structure the data such that it is always safe and under monitor while working on it. In the financial institutions, data theft is the serious problem in the current scenario. The employee should be trained in order to handle the data in a safe and secure manner. Security credentials should be maintained with high-security level to avoid unnecessary hacking activities.
  • Evaluate – The firm should conduct a periodic analysis about the threats they might encounter from the customers, mishandling of data, infected channels and networks, unsecured transactions, unexpected hacking activities etc. This analysis aids to forecasting the future threats and enhances the financial firm to proceed with the preventive measures before they could experience the disaster. This analysis should use advanced methods in order to figure out the threats promptly.
  • Awareness: The financial institutions have the responsibility to develop awareness amongst their working environment. They should conduct awareness programs to the employee on regular basis in order to give updated news regarding the threats faced by the financial world. They should also be educated to handle the situation if they encounter with unexpected threats during their working process. The immediate moves lead to saving the firm from a financial loss to some extent.
  • Collaboration: The organization should take steps to make collaboration with the legal board of the country to safeguard their vulnerable sources from external and internal threats. They must collaborate with other firms who take initiatives against the financial crimes. The team of financial institutions should help one another in order to take preventive measures against this serious problem faced by the world at present situation. The teamwork will give better results when compared to the steps taken by individual financial institutions.


It is really a tough situation for the financial firms to survive in this world of cyber attacks and financial crimes. They are facing great challenges in succeeding with the smooth functioning of the institutions. The financial firms have been encountering a million threats in their working environment on regular basis. Practicing the preventive measures is the only way to get rid of financial crimes. Financial institutions are the backbone of the economy in the country. Therefore, the country should support the financial firms to overcome these types of crimes in order to save the economy of the country. The financial firms should invest a part of their profit for implementing preventive measures against the financial crime. Thus, it is high time for the financial firms to protect their sources from threats to improve the economy of the country.