Fintech Fraud Prevention: Automating Financial Crime Effectiveness Testing with Cable

How Treasury Prime partner Cable helps banks and fintechs collaborate and comply with financial crime requirements
May 25, 2023

With the proliferation of digital banking and electronic payments, customers have the ability to leverage traditional banking products and services with the touch of a button on a smart phone. However, this increased flexibility and digital innovation has precipitated new and emerging risks for financial crimes and money laundering. Indeed, financial crime is rising sharply as fraudsters are becoming increasingly sophisticated, and efforts to fight this surge need to advance in lockstep. At the same time, harsh regulatory scrutiny is forcing banks and fintechs to upgrade their compliance oversight capabilities. 

This is where new automated solutions to fight financial crime and test fraud controls are increasingly important for banks, fintechs, and embedded finance companies to defend themselves and protect customers. We are spotlighting our partner Cable and their innovative all-in-one financial crime effectiveness testing platform that helps ensure compliance with financial crime requirements and prevent fintech fraud. 

Filling a gap in the market: fintech fraud prevention and fincrime controls testing

The questions that keep crime fighters up at night: Are my financial crimes controls working right now, not last week, or last month? Are there important trends showing up across my entire compliance program, and how can I see them in real-time? 

Up until now, these questions have been difficult to answer. Manual compliance processes, from testing to risk assessments, tend to be painstaking and involve long spreadsheets and significant effort to coordinate input across multiple sources, and what’s more, they aren’t updated in real time. This was the industry norm, but automation is changing the game, according to Cable CEO Natasha Vernier. 

“Let’s be honest — even with ever-increasing compliance spending, there’s a massive verification gap,” says Vernier, who knows firsthand that it’s not enough just to implement measures to detect fraud, money laundering, and other risks. Companies also need to test how well those efforts are working.

“In today’s regulatory environment, banks and fintechs now have to actually show their controls to handle their risks are effective — cutting corners is just asking to be shut down,” adds Vernier.

As the former head of financial crime at a bank in the UK, Vernier was tasked with building crime controls such as KYC and KYB checks, sanctions screening, transaction monitoring, and more. Though these solutions cost millions to build, she soon discovered how difficult it was to test whether those expensive controls were actually working.

“Testing our controls meant periodically manually reviewing just a handful of accounts out of millions, to try and see how well those controls were working,” Vernier says. “But dip-sampling, even though it only covers a fraction of accounts, is just the norm for testing, because there hasn’t been any ability to do more than that.

“So the idea for Cable came from that problem that we saw, that there was no technology to test the effectiveness of financial crime controls, and we can address that,” she says. 

 Automated effectiveness testing as solution

This insight prompted Vernier and the Cable team to build a next-gen platform that enables automated effectiveness testing of financial crime controls and offers a suite of related tech-enabled compliance products. 

“Banks and fintechs need tools to understand their risks and controls better. We've built a proprietary platform that allows banks and fintechs to centralize their compliance, by connecting and analyzing their data automatically and using a customizable database of checks that we run,” Vernier says. 

Cable has 5 main products: automated assurance, quality assurance, management information and reporting, automated risk assessment and Partner Hub. Here is a quick breakdown of each:

With these tools, companies can automatically test all of their fintech fraud prevention controls and regulatory requirements on a real-time basis. Firms aren’t reliant on manual dip-sampling of a handful of accounts.

“We help banks and fintechs know how compliant they are at any time by monitoring 100% of accounts. We flag any single instance of regulatory breaches or control failures or any time that we think that controls might not be working effectively, and we provide operational workflow tooling around those flags,” says Vernier.

Together, Cable’s products provide complete compliance infrastructure for banks and fintechs to manage their relationships easily. The rich data from Cable’s ongoing monitoring feeds into Cable’s other tools, giving firms continuous feedback about the state of their entire compliance program with automatically generated data analytics and performance metrics.

“So customers will see their risk assessments and other data update automatically in-app, which we believe is a first-of-its-kind capability for compliance teams,” says Vernier. 

Bank fintech partnerships and escalating regulatory pressure

The tool becomes particularly useful for transparency in bank-fintech partnerships because Cable flags issues for both the fintech and their bank, allowing both parties to quickly resolve risk concerns. 

“Given the complexity of bank-fintech partnerships, compliance teams will very quickly drown in operational work without automation. Cable helps banks have oversight across the risks and controls of all of their fintech partners in one place,” Vernier says. “We also enable fintech partners and banks to communicate about and quickly fix compliance issues in a collaborative way.”

Working with Cable through Treasury Prime

Companies that work with Treasury Prime can take advantage of the API pre-integration with Cable to get their automated financial crime effectiveness testing up quickly. Company account-level data can be automatically fed into Cable’s platform without any additional integration work. 

“So customers will just be able to turn Cable on and we'll be able to receive the data that we need to make these products work. The data linking will be seamless,” Vernier says. 

Wondering how embedded banking could help your business? Contact Treasury Prime — we have a true multi-bank network, the deepest bank core integrations, and extensive compliance experience. Read more about our $40 million Series C Funding and why Tearsheet named us the Best Banking as a Service company for the second year in a row. Talk to the best embedded finance team in the industry.

Related fintech fraud prevention content:

Creating a Culture of Compliance at Your Company

Managing Risk with Enhanced FDIC Insurance

Why Every Fintech Needs Its Own Dedicated FBO Account

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