Money Laundering: How to Plug Gaps Between Banks, TelcomsSaudi Fraud Supervisor on How Telecom Firms, Banks and Regulators Can Work Together
How are money launderers exploiting the various gaps in the telecom and banking industry? Hesham Sayed Shoeb, fraud supervisor with Saudi Telecom Co., shares his experience on fighting money launderers and how to improve systems and tools to catch more fraudulent transactions.
Money launderers typically follow a three-stage process of placement for avoiding detection, beginning with placement, which involves the purchase of prepaid cash vouchers and prepaid mobile numbers. Next, fraudsters use layering techniques such as selling prepaid cards on the market at a discount and asking buyers to transfer the money into bank accounts of shell companies. Lastly, the money is integrated through mobile wallets or bank accounts to hide their activities.
These tactics succeed because telecommunication companies and banks are regulated by different entities in most countries. "Both regulators function independently, which gives the fraudsters the ability to pass the money without any type of control from both industries," Shoeb says.
In this video interview with Information Security Media Group, Shoeb discusses:
- The various tactics money launderers use to make transactions look legitimate;
- Strategies for improving enforcement such as better training and information sharing and the creation of an anti-money laundering commission across all industries;
- The use of business intelligence tools to quickly identify fraudulent patterns and spot suspicious accounts.
Shoeb, who manages the anti-fraud program at Saudi Telecom Co., has more than 20 years of experience fighting fraud, with 17 years in the telecommunication industry. He is also a certified fraud examiner.