In Lithuania, financial fraud has escalated alarmingly, with reports increasing by 13% since 2018, while the number of cases resolved has dropped by over 70%.
According to RegTech firm Salv, these statistics, presented by Lithuania’s law enforcement, underscore a grim reality where not only the victims but also the state and public safety are severely impacted.
The Sophistication of Modern Financial Crimes Financial criminals are not only becoming richer but are also investing in advanced technologies to enhance their scams. Artificial intelligence, particularly deepfake technology, has seen a staggering increase in use, with incidents rising by 3,000% between 2022 and 2023.
This surge in technology-driven crimes, especially Authorised Push Payment (APP) fraud, which constitutes more than 60% of financial crimes, poses a significant challenge to both individuals and institutions.
Recently, Greta Bokmotaitė, Head of the Pre-Trial Investigation Coordination and Control Unit at the Lithuanian Criminal Police Bureau, discussed the critical state of financial crime at an event organized by Fintech Hub Lithuania, Revolut, and local authorities.
Salv outlined that the main thrust of the conversation was on the essential role of information sharing among financial institutions and law enforcement to combat these crimes effectively.
Law enforcement agencies are advocating for financial institutions to share critical data about suspicious activities, which could include transaction times, dates, IBANs, and behavioral patterns.
This kind of collaboration, Salv stressed, is set to become easier as new legislation came into effect in Lithuania from August 2024. Tools like Salv Bridge are also mentioned as pivotal in aiding institutions to comply with data sharing norms while maintaining customer confidentiality.
The Lithuanian police suggest that a detailed analysis of suspicious client behaviors and the tracking of money mules could reveal crucial insights. Techniques like “layering,” where illicit funds are moved stealthily across accounts, can be better understood through shared intelligence, again underscoring the value of collaborative tools such as Salv Bridge.
Greta Bokmotaitė highlighted a significant hurdle in solving financial crimes: the use of false identities. Despite stringent Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations, there’s an urgent need for increased diligence among fintechs. Recent clampdowns on non-compliant fintechs, including license revocations, demonstrate the seriousness of this issue.
Scammers use various tactics like grooming and pressure to exploit victims. From romance scams by groups like The Yahoo Boys to time-sensitive APP scams, criminals are diversifying their methods to manipulate victims into quick financial decisions.
Technological solutions play a crucial role in disrupting these scams. For instance, Revolut’s Head of Financial Crime and Compliance, Giedrė Žukauskienė, noted that slowing down transactions with warning messages gives customers vital time to reconsider potentially fraudulent transfers. Such measures can significantly reduce the success rate of APP fraud.
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