Financial frauds and crimes refer to theft or deprivation of an individual’s or enterprise’s money or property by illegal means such as deceit, abuse of trust, or use of misleading information. There are various forms of such crimes. These include forgery, money laundering, embezzlement, or credit card fraud.
With the implementation of technology in every field, financial frauds have been increasingly identified with the help of communication surveillance. It refers to the monitoring and collection of information by a third party. Third parties include private companies or law enforcement agencies or might even be someone with malicious intentions. So, let’s get you started on the types of these frauds and how can such surveillance help in reducing them.
Role of Surveillance in Financial Frauds
The traditional methods of investigations had limited feasible means to detect and prevent financial fraud. But, through communication surveillance, these crimes have the possibility of being prevented before they even occur. The below-mentioned points show how such surveillance methods have helped reduce the rate of these crimes.
- Tracking Internal Communications Platforms
Fraud and crimes require designing plans and carrying out activities with the use of some means of commutation systems. With the help of such surveillance, the communication channel can be tracked beforehand which will, in turn, lead to no occurrence of these crimes.
- Preventing Illegal Transfer of Money
The main objective of financial crimes is to transfer funds. By reviewing communications systems that have been breached, direct access to the channel from where funds are getting transferred can be found which will help in the prevention of transfers.
- Continuous Monitoring System
Multiple monitoring systems can be performed under such surveillance. These include internet monitoring, fixed-line interception, mobile phone monitoring, and intrusion technology. These keep a constant check on all the activities which are carried on inside the organization and aid in assembling evidence in cases of financial crimes.
Types of Financial Frauds and Crimes
There are about 6 types of financial fraud and crimes. These include electronic crime, information security, bribery and corruption, money laundering, market abuse, and insider dealing, and terrorist financing. These are discussed below.
- Electronic Crime
It refers to the illegal activity which involves the use of computers. These activities include theft, alteration, or deletion of information from an electronic database or may even be in the form of unauthorized transfer of money from one source or account to another.
- Information Security
It is often said as ‘infosec’ and refers to procedures or practices which are used to prevent unauthorized access to data and information. These securities when falling into the wrong hands leads to financial frauds and crimes.
- Bribery and Corruption
Bribery refers to the using unlawful means, mostly in the form of money to influence the behavior of an individual. Corruption refers to the illicit use of entrusted power for personal benefits.
- Money Laundering
It refers to the unlawful process of continuously changing huge sums of money obtained by illegal means into appearing as though it were from a legitimate source.
- Market Abuse and Insider Dealing
Insider dealing is a part of market abuse which refers to the use of information that is not public for making personal profits. This practice usually takes place in stock markets where investors at higher positions influence the market prices.
- Terrorist Financing
It refers to the collection of funds or money from different sources for terrorist acts or organizations. This could be done from both lawful and unlawful sources.
Conclusion
With the shift to digitalization, more and more users are shifting to online means for payments and transfers. This is the primary reason for the growth of financial frauds and crimes. The impact of technology is very evident in the field of finance. For instance, with a communication surveillance model which combines data, employees, and the enterprise, the risk of financial crime decreases and a strong cyber security network can be established. Moreover, with such systems the enterprise can ensure smooth functioning of all activities with a thorough verification process. There are many organizations who provide such surveillance services. At Acuity Knowledge Partner, you can get access to top quality services with its global network of more than 400 financial clients!
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