By PAUL O’DONOGHUE, Senior Correspondent
NASDAQ CEO Adena Friedman has called on the US to develop a National Fraud Strategy, warning that criminals are using AI to carry out scams at an unprecedented scale.
A key part of the strategy would be encouraging financial institutions to “file joint SARs” (Suspicious Activity Reports) and promoting information sharing, Friedman said.
“Financial crime has become a multi-trillion-dollar global challenge,” she told the American Banker Most Powerful Women in Banking and Finance Conference in New York
“I believe the United States should take the next step. Not by creating a new regulator. And not by imposing a new set of obligations on financial institutions.
“Instead, I believe we should work toward the development of a National Fraud Strategy for the United States.”
Friedman said she envisaged a strategy which would:
- Promotes “responsible information sharing”. It would establish common best practices and create greater alignment around prevention and disruption efforts.
- Invite “all industries impacted by the scam ecosystem” to join the Strategy.
- Provide the “clarity and safe harbors necessary” to encourage broader participation in existing public and private sector initiatives.
- Create a positive feedback loop between the private sector and law enforcement. Friedman also said the strategy would help financial institutions be “further empowered to file joint SARs”. Additionally, the Strategy would get law enforcement to provide “critical feedback that enhances the quality of future reporting”.
“By aligning a new National Fraud Strategy with a modernized AML framework, we have an opportunity to create a more connected, intelligence-driven approach to fighting financial crime, one that protects victims, strengthens institutions, and helps disrupt criminal networks before harm occurs,” Friedman said.
Friedman said the strategy could bring together financial institutions, law enforcement, telecommunications providers, technology companies and payment networks.
“This challenge is simply too large and evolving too quickly for any single institution to solve alone,” she added.
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