Treat Fraud as an Ecosystem, Experts and Regulators Urge

Interpol warned that financial fraud is among the world’s most severe transnational crimes and that AI-enhanced fraud yields about 4.5 times the profit of traditional schemes. The organisation called for unified regulatory reform and wider industry collaboration to treat fraud as an ecosystem rather than an isolated compliance issue.

Industry leaders, regulators and compliance officers say individual organisations can no longer rely on internal controls alone. Fraudsters increasingly target human vulnerabilities with social engineering, AI-powered impersonation and deepfake-assisted scams, making attacks harder to spot for consumers and institutions. The higher returns from AI-enabled schemes have increased the scale and speed of attacks and put pressure on firms to share information more quickly and coordinate responses across borders.

Multiple oversight bodies have responsibilities that touch fraud prevention, and no single regulator holds end-to-end authority. That regulatory fragmentation complicates cross-border investigations and produces overlapping or conflicting rules for firms operating in several jurisdictions. Limited data sharing between private firms and across industry segments leaves gaps that fraudsters exploit. Many companies have developed proprietary tools and frameworks, which makes it difficult to combine threat intelligence at an ecosystem level.

Participants in the sector point to specific regulatory conflicts that hinder collaboration. Data protection laws can restrict the exchange of personal information needed to detect and block fraud patterns. Different regulators — financial, data protection, telecoms and consumer protection authorities — have distinct mandates and enforcement priorities that can slow joint action. Firms also raise concerns about antitrust exposure and legal liability when sharing data, and smaller businesses cite cost and resource limits that reduce their ability to join collective programmes.

Proposals to address those issues include clearer lines of regulatory responsibility and legal channels for sharing fraud-related data. Suggested measures include harmonised incident reporting, legal safe harbours for sharing anonymised indicators of compromise, and regulatory frameworks that scale requirements according to firm size and risk profile. Advocates stress the need to balance the capabilities of large financial institutions with the practical constraints faced by smaller firms and payment providers.

Standardised fraud processes are under discussion as a way to reduce fragmentation. A common framework could define fraud types uniformly, set standard data formats for alerts and case information, adopt shared taxonomies for risk indicators, and establish coordinated escalation paths between firms and regulators. Expected benefits include faster detection, reduced duplication of effort and clearer metrics for oversight. Potential drawbacks include the cost of implementation, a higher rate of false positives if standards are too rigid, and the difficulty of reaching global agreement on technical and legal details.

Proposals for a single, non-profit system to coordinate activity across the ecosystem face practical and political hurdles. Funding such an entity, setting governance and access rules, and aligning international legal frameworks would be complex. Questions remain about ownership and operation of shared datasets, how to enforce participation and how to prevent misuse of sensitive information.

A webinar hosted in association with Ecommpay will convene a panel of industry experts to discuss regulatory and ecosystem changes needed to improve collaboration. Participants include Willem Wellinghoff, UK Chair and Chief Compliance Officer at Ecommpay; Anne Leslie, Head of Cloud Risk EMEA at IBM; Pallavi Kapale, Senior Financial Crime Officer (FIU) (2LOD) at Bank of China; and Teresa Connors, who will moderate the discussion.

Background: Fraud has shifted from predominantly technical attacks to methods that exploit human psychology. Advances in machine learning make it easier to scale personalised scams, and the global nature of digital payments means incidents frequently cross multiple regulatory and legal jurisdictions. Industry stakeholders call for coordinated regulatory reform, interoperable processes and safe legal channels for data sharing to address the economic and human costs of modern financial fraud.