FinCrime Dynamics’s scientific paper ‘’An approach to benchmark fraud detection algorithms in the COVID-19 era’’ has been published in the Latin American Journal of Economics and Digital Society. This paper was a partial result of the innovation projects CP-Mark and FraudSim, sponsored by Innovate UK.

This paper explores the consequences of the covid-19 pandemic on financial crime control systems and their inability to keep up with the increase in crime and digital consumerism. In this study we focus on the particular case of Mexico and analyze how benchmarking in the control of financial crimes can help create a safer environment that will encourage the use of digital financial services.

Abstract

To address the challenges in the fight against financial crime, particularly in the COVID-19 pandemic context, this paper focuses on financial synthetic data and the use of a reliable benchmark tool to test fraud detection algorithms. Compliance departments at financial institutions face the challenge of reducing the number of innocent people erroneously accused of fraud. To cope with this problem financial institutions are exploring the application of machine learning fraud detection algorithms and data analysis technologies to develop a more accurate and precise fraud detection system. However, approaches to streamlining and automating banks’ monitoring and testing processes is challenging as there is no consensus on a benchmark. We explore the relevance of measuring the applicability of a financial crime benchmark in the presence of a growing digital financial sector, such as in the case of Mexico. This study is particularly important due to serious threats that are faced by a rapidly developing financial system (2019 Mexican Central Bank Report). These risks have been further exacerbated as a result of the COVID-19 pandemic accelerating the shift towards digital payments.

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An approach to benchmarking algorithms for fraud detection in the COVID-19 era