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The Future of Financial Crime — Insights from Mark Ghatan

Financial Crime
July 16, 2021

This article is part of Kyckr’s new Future of Financial Crime Series which will feature interviews with leading industry professionals and thought leaders to learn more about the trends that will shape the future of financial crime.

The following is an interview we recently had with Mark Ghatan, Esq., Director of Investigations, Polaris Corporate Risk Management LLC.

The Future of Financial Crime — Insights from Mark Ghatan

What is the state of financial crime today?

While the form and methodology of different criminal enterprises vary from case to case, bad actors overwhelmingly leverage technology today. When it comes to financial institutions, criminals prey on the lagging threat identification capabilities of their victims. By the time an institution identifies an ongoing plot, it is often already too late: ransomware can live in systems for months before being detected and exploited; the plots of rogue insiders often go unnoticed, even as they disseminate valuable IP or trade secrets; and fraudulent gains or embezzled funds can be siphoned off in a million directions through cutting edge Fintech products and cryptocurrency ecosystems. Criminal imitations of your company – often known as “spoofs” – utilise technology to fool even executive-level employees into giving up the keys to the castle. At Polaris, we’ve seen all these trends continually play out – but unfortunately our clients are too often playing catch-up.

How has financial crime evolved over the past 5 years?

Whether you’re asking about the evolution over the past 5 years or any other period, the answer is distressingly similar: emerging technologies prompt swift, dramatic evolutions in the efficiency, traceability, and scale of financial crimes. Consider, for example, the sea change that cryptocurrency represented in the financial world at large; digital currency meant less regulation, more autonomy and irreversible transactions. These same benefits help criminals ensure that laundered money, illicit transactions, or stolen assets/accounts are more difficult to recover. What’s worse is that cybercriminals remain at the bleeding edge of new technologies, while the rapidly-aging infrastructures of financial institutions render them prime targets – as evidenced by the recent, unrelenting string ransomware incidents. These attacks reveal the changing face of the financial criminal, as many have been undertaken by staggeringly capable state-sponsored actors, or smaller, flexible groups that can operate from anywhere in the world with Internet connection. 

What’s the future of financial crime?

There are two branching “futures” in financial crime: the future activity of financial criminals and the future defense of financial institutions, with emerging technology driving both. In the case of the former, criminal enterprises are likely to grow more focused yet decentralised, as tech advances create new opportunities. Cybercrime outfits have also come under scrutiny since the Colonial Pipeline incident, prompting some groups like DarkSide to dismantle, with members breaking off as smaller cells to remain nimble. Though this decentralisation may complicate enforcement actions, financial institutions must invest in emerging technologies like artificial intelligence, while consistently upgrading existing cybersecurity measures to protect against internal and external threats. All too often, organisations see risks like ransomware and insider threats as too obscure or unlikely, and fail to protect themselves. The upside of these investments through the setup and maintenance costs simply cannot be seen until they’re paying for it later.

Financial Crime
July 16, 2021

This article is part of Kyckr’s new Future of Financial Crime Series which will feature interviews with leading industry professionals and thought leaders to learn more about the trends that will shape the future of financial crime.

The following is an interview we recently had with Mark Ghatan, Esq., Director of Investigations, Polaris Corporate Risk Management LLC.

The Future of Financial Crime — Insights from Mark Ghatan

What is the state of financial crime today?

While the form and methodology of different criminal enterprises vary from case to case, bad actors overwhelmingly leverage technology today. When it comes to financial institutions, criminals prey on the lagging threat identification capabilities of their victims. By the time an institution identifies an ongoing plot, it is often already too late: ransomware can live in systems for months before being detected and exploited; the plots of rogue insiders often go unnoticed, even as they disseminate valuable IP or trade secrets; and fraudulent gains or embezzled funds can be siphoned off in a million directions through cutting edge Fintech products and cryptocurrency ecosystems. Criminal imitations of your company – often known as “spoofs” – utilise technology to fool even executive-level employees into giving up the keys to the castle. At Polaris, we’ve seen all these trends continually play out – but unfortunately our clients are too often playing catch-up.

How has financial crime evolved over the past 5 years?

Whether you’re asking about the evolution over the past 5 years or any other period, the answer is distressingly similar: emerging technologies prompt swift, dramatic evolutions in the efficiency, traceability, and scale of financial crimes. Consider, for example, the sea change that cryptocurrency represented in the financial world at large; digital currency meant less regulation, more autonomy and irreversible transactions. These same benefits help criminals ensure that laundered money, illicit transactions, or stolen assets/accounts are more difficult to recover. What’s worse is that cybercriminals remain at the bleeding edge of new technologies, while the rapidly-aging infrastructures of financial institutions render them prime targets – as evidenced by the recent, unrelenting string ransomware incidents. These attacks reveal the changing face of the financial criminal, as many have been undertaken by staggeringly capable state-sponsored actors, or smaller, flexible groups that can operate from anywhere in the world with Internet connection. 

What’s the future of financial crime?

There are two branching “futures” in financial crime: the future activity of financial criminals and the future defense of financial institutions, with emerging technology driving both. In the case of the former, criminal enterprises are likely to grow more focused yet decentralised, as tech advances create new opportunities. Cybercrime outfits have also come under scrutiny since the Colonial Pipeline incident, prompting some groups like DarkSide to dismantle, with members breaking off as smaller cells to remain nimble. Though this decentralisation may complicate enforcement actions, financial institutions must invest in emerging technologies like artificial intelligence, while consistently upgrading existing cybersecurity measures to protect against internal and external threats. All too often, organisations see risks like ransomware and insider threats as too obscure or unlikely, and fail to protect themselves. The upside of these investments through the setup and maintenance costs simply cannot be seen until they’re paying for it later.

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