Fraud, in the financial crime context, refers to any deliberate deception carried out with the intention of obtaining an unlawful financial or personal gain — or of causing unlawful loss to another party. It is one of the most prevalent and economically damaging categories of financial crime, encompassing an extraordinarily wide range of conduct: from simple payment fraud and identity theft, through to complex investment fraud, insurance fraud, mortgage fraud, procurement fraud, and large-scale accounting fraud. Anti-fraud refers to the policies, controls, detection systems, and investigative capabilities that organisations put in place to prevent, identify, and respond to fraudulent activity — whether perpetrated by external parties against the institution, by customers against each other through the institution’s platforms, or internally by employees or management.
Fraud and money laundering are deeply interconnected: fraud is one of the most significant predicate offences for money laundering, meaning that the proceeds of fraud frequently become the subject of subsequent laundering activity. Despite this, anti-fraud and AML functions have historically operated as separate disciplines within financial institutions — using different data sets, methodologies, and reporting lines — which has created significant blind spots. There is growing regulatory and industry recognition that a more integrated approach, in which fraud and AML intelligence is shared and analysed together, produces materially better detection outcomes. At EU level, the PIF Directive criminalises fraud affecting the EU’s financial interests and establishes minimum standards for fraud offences across Member States, while the European Public Prosecutor’s Office (EPPO) — established in 2021 — has jurisdiction to investigate and prosecute fraud against the EU budget, representing a significant step toward supranational fraud enforcement within the EU.
