The Financial Crime Law Enforcement Network (FINCEN) released a guide Friday (September 5) that aims to encourage appropriate voluntary sharing of information between financial institutions, including appropriate foreign institutions.
The Financial Crime Law Enforcement Network (FINCEN) released a guide Friday (September 5) that aims to encourage appropriate voluntary sharing of information between financial institutions, including appropriate foreign institutions.
Fincen said in a press release on Friday that the information sharing could help financial institutions combat money laundering, terrorist financing and illegal financial activities involving drug trafficking organizations, foreign terrorist organizations and fraudsters.
“The guide clarifies that while financial institutions are prohibited from sharing Suspicious Activity Reports (SARSs) and information that will reveal the existence of SARs, the Bank Secrecy Act and its implementation regulations generally do not prohibit cross-border information sharing.”
Fincen said in the guidance that financial institutions can better detect and combat illegal financial activities if they share information rather than keeping them isolated.
According to the guidelines, this information may, where appropriate, include transaction history, customer and account information, and survey material.
Fincen said in a press release Friday that it issued guidance in consultation with the Office of the Master Calculator of Currency, Federal Deposit Insurance Corporation and the National Credit Union Administration.
PYMNTS reported in December that companies in security areas such as banking and payments are involved in the benefits of data sharing across the ecosystem to combat fraud.
Combining anonymous data from multiple sources can allow the consortium to discover suspicious patterns that would otherwise fly under the radar.
Meanwhile, data sharing comes with its own headaches, from privacy issues to regulatory barriers, so financial institutions must ensure data is clean, safe and compliant with regulations.
Pradheep Sampath, chief product officer of Entersekt, told PYMNTS in August that while traditional historical data remains the cornerstone of fraud prevention, financial institutions also need updated “radars” such as transaction-driven insights, behavioral signals, device fingerprints and geolocation patterns.
“Looking back in the past can't always give you the evolving threat vectors,” Sampath said. “You need accuracy and speed – protecting legitimate users while quickly identifying emerging fraud patterns.”
The PYMNTS Intelligence Report “State of Fraud and Financial Crime in the U.S. in 2024: What FIS Need to Know” found that 40% of financial institutions reported that fraud-related losses increased over the past 12 months.
