Financial crime: a call for collective action

Fraud has today made its way into every aspect of modern life, infiltrating both our personal and professional worlds. Whether you’re an individual shopping online or a CEO managing multimillion-euro transactions, no one is immune.

Today’s cybercriminals are not physically robbing individuals or bank branches but are sitting behind screens, hidden by layers of digital anonymity. Their weapons are no longer guns but advanced algorithms, phishing e-mails, and deepfake technology. The battlefield is everywhere.

Fraud targets everyone

Fraud does not discriminate. It affects people across all walks of life. From young people to executives, anyone can fall victim to a cleverly disguised scam. Cybercriminals are more organised, more aggressive and more technologically advanced than ever before. They use artificial intelligence to come up with sophisticated phishing e-mails, fake websites and even deepfake videos to copy the tone, branding and language of familiar and trusted institutions or individuals.

These criminals often pose as government bodies, banks or reputable companies to gain people’s trust. They use publicly available information – like social media posts and e-mail signatures so that they can adapt their scams and make them very convincing.

From romance scams to ransomware

Fraudsters target the more emotionally vulnerable and disregard the impact on people’s lives. Typical fraud types include:

Romance scams: This is when criminals create fake identities to connect with others, eventually manipulating their victims into sending money to presumed loved ones.

Ransomware attacks: These attacks are primarily targeted at businesses and revolve around malicious software that compromises systems and data, and ask for a ransom to unblock them, negatively impacting operations and causing financial damage that sometimes runs into millions.

Cyberattacks: These are deliberate attempts to breach security networks that can result in stolen data, service outages and long-term reputational harm.

The goal of these schemes is always the same: to make money by cheating someone else.

The power of preparedness

Notwithstanding the growing threat, there is still hope. Businesses and individuals have some very powerful tools and methods to protect themselves from fraud, including:

Education and awareness: Regular training and awareness campaigns help people recognise and respond effectively.

Fraud does not discriminate. It affects people across all walks of life- Kenneth Farrugia

Technology investment: Using advanced threat detection systems, AI-driven monitoring tools and robust cybersecurity practices can help identify and fight attacks before damage is done.

Personal vigilance: Always verify the source of e-mails and calls. Do not click on suspicious links or share personal information by text or e-mail. Legitimate institutions will never ask for passwords or sensitive data in this way.

The main thing to keep in mind is that if something sounds too good to be true, then it probably is, as success in life or business always needs some effort. Be careful of “once-in-a-lifetime” offers or a sense of urgency to make a transaction.

An important call for a united front

The fight against fraud cannot be won alone. It requires a united approach across sectors that brings together financial institutions, telecommunications providers, law enforcement agencies, government bodies and representatives of private businesses.

Cybersecurity is no longer just an IT issue but also impacts all aspects of business and society at large. The question is no longer if an attack will happen, but when. How well prepared we are can mean the difference between impact and resilience. In a fast-moving world, it is very easy to overlook the basics.

Now more than ever, we must stop and think about the protection of our assets, whether they are personal information, financial assets, business operations, employees and equally important, particularly when it comes to the corporate world, reputation.

As fraud is rapidly evolving, so must we. So, my final note revolves around a call to action for the setting up of a National AFC Coordination Committee. This committee would be entrusted to facilitate collaboration and information-sharing among banks, law enforcement bodies, FIAU, key telecommunication operators and regulators. Their work can be supported through the setting up of task forces or working groups to address specific threats.

Only by working better together can the current and upcoming battles be won. The war against financial crime will unfortunately never end and we need to continuously keep raising our defences for many years to come.

Kenneth Farrugia is the CEO of Bank of Valletta.