Written by Guido Ronchetti, CTO at XTN Cognitive Security®
The Money Mule phenomenon is spreading rapidly thanks to the critical job-loss situation caused by COVID 19 and the increase in digital onboarding procedures.
WHAT ARE MULE ACCOUNTS?
Money Mules accounts are banking accounts used to move illicit funds. Those accounts could be related to money laundering.
WHAT IS A MONEY MULE?
A Money Mule is a person who transfers money acquired illegally electronically on behalf of others, obtaining a commission for it. The illegal cash often originates from criminal activities such as phishing, malware attacks, e-commerce fraud, CEO fraud, to name a few.
WHAT IS THE IMPACT ON BUSINESS?
Money Mules represent a critical threat to modern banking institutions, posing on one side compliance issues and, on the other end, causing significant reputational damage. Being involved in a money-laundering operation could force drastic fixes, impacting new customer acquisition rates, shaking shares value, and introducing unexpected costs.
NEW PREVENTION & DETECTION CHALLENGES
Preventing Money Mule activity is a historical issue for financial institutions, but today the problem is spreading more than ever for several reasons. New payment schemes, such as instant payments, reduce the time for fraud checks (or AML) before the cash-out, and untraceable payment schemes such as cryptocurrencies make it more difficult to track money flow.
Today, Mule accounts often leverage digital onboarding procedures and use synthetic or stolen identities under the criminal organization’s direct control. Traditional banks hurry towards digital onboarding procedures, which imply new challenges in identity verification processes and security control procedures. Furthermore, users (and unfortunately also fraudsters) are increasingly using fintech companies that operate on the market with rapid and simplified onboarding procedures and minimal security checks to open new current accounts on traditional banks.
HOW XTN CAN HELP
At XTN Cognitive Security, we believe that converging AML and fraud checks in a single solution offers multiple benefits, especially when dealing with money mules. XTN’s unique holistic approach corroborates the endpoint identity, the user behavior, and the account profile, analyzing the cash-in/cash-out flow historical behavior.
XTN Cognitive Security Platform® effectively spots fraudulent accounts relying on:
- additional fraud checks during the application request phase;
- analyzing incoming funds to accounts focusing on unusual behavior, velocity and relying on multiple watchlists to recognize suspect payer;
- analyzing cash-out transactions originating from an account to detect the account holder’s suspect behavior.
XTN Cognitive Security Platform® lets you secure your high-value online services against Money Mule Accounts. Get started!
