Voice of the Industry

Account opening and intelligence sharing: preparing for a new era of money mules

Friday 7 October 2022 09:50 CET | Editor: Alin Popa | Voice of the industry

Pablo de la Riva Ferrezuelo, Feedzai’s Principal SME on Cyber and Digital Trust, outlines how banks can get ahead of fraudsters with shared intelligence to fight money mules.


When the United Nations Secretary-General António Guterres opens a general assembly with a warning that war, famine, and climate change are setting the stage for ‘a winter of global discontent’, you know things are bad. These factors are contributing to soaring inflation and economic instability worldwide. They also create conditions for everyday people to get lured into criminal activity through money mule scams. These events typically precede an explosion of crime.

Unfortunately, fraudsters are the first to innovate during economically uncertain times. For banks, the traditional response has been to react to new fraud schemes and tactics. In this landscape, however, traditional reactive responses aren't enough.

Technology has made it easier for fraudsters to expand their reach and recruit desperate individuals as money mules. The ranks of fraudsters grow with every Google search for ‘how to run a scam’. Fraudsters also stand to profit faster than ever before thanks to the expansion of faster payment systems and person-to-person services like Zelle, Venmo, and WhatsApp. Money moves with the press of a button, leaving banks at a significant disadvantage to stop funds from being lost for good.

Fertile ground for money mules 

The availability of highly vulnerable people, economic uncertainty, and faster payments creates the perfect environment for money mules. Mules managers can use first-party fraud, synthetic identities, and identity theft to get money mules to commit their crimes - and that’s exactly what we’re seeing. 

This is especially true for digital banks and new payment platforms that favour digital onboarding. While these platforms offer a seamless onboarding process to drive business, it also drives an increase in fraud, making it easy for criminals to open accounts and operate money mule schemes. By using witting or unwitting intermediaries to receive their ill-gotten gains, criminals can avoid exposure.

Fraudsters innovate quickly. With a (possible) recession looming, the next few months will be unpredictable. That’s why the best strategy is to prepare for types of fraud you haven’t seen before and embrace new methods of exposing risky behaviour.

Future-proof your fraud and AML operations with shared intelligence

The best way to prepare for the unknown is to move beyond classic fraud prevention approaches, such as the blacklisting devices ID among customers. Instead, embrace a shared intelligence approach that shares risky accounts with other FIs.

Understanding a user’s risk level starts with building digital trust. Digital trust solutions can assign unique identifiers based on a variety of factors (email addresses, device ID, a network, etc.). By linking these attributes to specific identifiers, your bank can quickly detect suspicious activity. But instead of immediately blocking transactions, you can use honeypot tactics to gain more information about the criminal and their activities.

For example, let’s say Peter has an account with your bank and uses his device to transact on a regular basis. But one day, a new device attempts to access the account. That unfamiliar device can be tagged and remembered as being associated with fraud. 

A few weeks later, the same suspicious device is used to open a new account for Steven (a synthetic identity). Your bank now knows this device is linked to fraud. But instead of preventing Steven from onboarding, your bank allows the process to continue. 

Pablo de la Riva Ferrezuelo, Feedzai’s Principal SME on Cyber and Digital Trust, outlines how banks can get ahead of fraudsters with shared intelligence to fight money mules.


This strategy focuses on intelligence gathering. By allowing Steven to onboard, your bank learns more about how the account behaves and interacts - including the networks used to connect, different devices associated with it, and the accounts they engage with most often. These activities can be monitored over several weeks or a month.

Taking the honeypot approach allows your bank to gather intelligence about how criminals operate. This intelligence isn’t just from a single transaction but over multiple transactions following several months. Your bank can share this intelligence with other banks and customers. And because the onboarding process is the same for any single business, this intelligence-sharing benefits all businesses, not just banks and financial institutions.

Detecting and stopping fraud isn’t enough to address today's criminals and their aggressive money mule tactics. The more you learn about a fraudster’s techniques and activities, the better prepared you will be to stop future attacks. Your bank shifts away from a siloed approach to fraud and financial crime towards a new approach based on connection and collaborations. This far more successful approach is known as RiskOps.

Fraud always increases during difficult times. Technology and digitisation will create fraud typologies we can’t even imagine today. Where there’s fraud, there’s money laundering. We expect money mule activity to soar as economic uncertainty becomes more widespread. The best way to defend against this is to use the account opening process to learn about emerging schemes and share intelligence across organisations. 

About Pablo de la Riva Ferrezuelo

Pablo is the co-founder of Revelock, which was acquired by Feedzai in 2021, and underpins our Digital Trust solution. Pablo has over 20 years of experience working to protect financial institutions and their customers from cybersecurity attacks and online fraud. First at Telefónica and then at Deloitte, Pablo gained first-hand knowledge researching malware, tracking adversaries, investigating fraud, and standing up and managing cyber security and fraud operations for some of the largest banks.

About Feedzai

Feedzai is the world’s first RiskOps platform for financial risk management, and the market leader in safeguarding global commerce with today’s most advanced cloud-based risk management platform, powered by machine learning and artificial intelligence. Feedzai is securing the transition to a cashless world while enabling digital trust in every transaction and payment type. The world’s largest banks, processors, and retailers trust Feedzai to protect trillions of dollars and manage risk while improving the customer experience for everyday users, without compromising privacy. Feedzai is a Series D company and has raised USD 282 mln to date. With a valuation of +USD 1.5 bln, the company's technology protects 900 million people in 190 countries.

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Keywords: online fraud, fraud prevention, digital payments, AML, KYC
Categories: Fraud & Financial Crime
Companies: Feedzai
Countries: World
This article is part of category

Fraud & Financial Crime


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