TD Bank’s $3.09 billion penalty in 2024 didn’t stem from a lack of awareness. It exposed a deeper vulnerability: the company’s fraud and anti-money laundering (AML) system couldn’t scale. The penalty highlighted a broader industry issue — the tools and processes designed to protect against fraud and stop financial crime often collapse under growth. What once worked in isolation no longer suffices when threats converge. As companies expand into new markets, onboard more users, and face increasingly complex risks in high-stakes environments, internal systems are showing their age.
This wasn’t just a missed suspicious activity report (SAR) or two. It was a very public demonstration of what happens when risk perimeters are managed by infrastructure that wasn’t built for velocity, volume and regulatory change. Operational cracks in fraud and AML defenses may form quietly at first, manifesting as alert backlogs, delayed filings and friction-filled investigations, but they never stay hidden for long.
The Startup Mindset Doesn’t Scale
Too often, companies attempt to scale fraud and AML programs with the same bootstrapped mindset that served them in their early startup days. It’s an understandable instinct; in-house tools offer initial control and customization and seem cost-effective in the short term. But this homegrown approach breaks down as fraud and compliance become boardroom-level risks.
Managing these challenges through fragmented systems, siloed teams and outdated tech stacks leads to incomplete customer risk profiles, operational inefficiency, too many alerts and regulatory vulnerabilities. Legacy systems, particularly those built around batch processing, weren’t designed for the speed of modern finance. Transactions happen in milliseconds; money moves across borders in seconds. Yet many compliance teams are still reviewing risks hours — or even days — after the fact. Every lag between detection and action becomes an open door for exploitation.
Fraud & AML Can’t Live in Silos
Fraud prevention and AML efforts share the same mission: reduce risk, protect the business and satisfy regulatory obligations. But in many organizations, these functions operate in separate lanes. They use disconnected tools, analyze different data sets and respond to threats without shared visibility. This division is no longer defensible.
When a fraud analyst flags unusual device configurations, synthetic identities or changes in digital footprint analysis, that context often doesn’t reach the compliance team. Likewise, when an AML analyst spots sanctions exposure or adverse media, they may lack insights into behavioral anomalies. Without a shared risk view, valuable intelligence gets lost in the gap between functions.
An integrated approach empowers both teams to act faster and more accurately while maintaining their distinct roles and responsibilities. Real-time fraud signals weed out bad actors before KYC, reducing unnecessary onboarding costs and manual reviews. Layering fraud insights, such as digital footprint analysis and device intelligence with AML screening insights, creates a richer, more actionable customer profile. This means that if an investigation arises after customer onboarding, it results in faster triage, more precise escalation and fewer false positives — because there is more behavioral context to inform highly advanced rules and machine learning based monitoring systems.
Flexibility Isn’t Resilience
Building in-house systems seems appealing because it promises control. But in reality, most internal builds underestimate the complexity of staying ahead — not to mention the immense time and resources it requires from product an engineering perspective. Teams misjudge how quickly threat patterns shift, overinvest in short-term fixes and underinvest in long-term adaptability. They accrue technical debt, suffer from alert fatigue and create brittle systems that buckle under pressure.
Even companies that successfully launch internal tools soon discover the cost of change. A new product, a new regulation or entry into a new market often requires a complete rebuild. That’s the opposite of resilience, and in an environment where fines are measured in billions and threats evolve daily, fragility is a non-starter.
The Real Cost of Building In-House
The most dangerous aspect of homegrown tools is the illusion of control. These systems often lack the transparency, adaptability and oversight regulators now expect. Most aren’t built with audit trails. They don’t offer service-level guarantees. They can’t adapt quickly to jurisdictional shifts or policy changes without requiring engineering resources. What started as a capability becomes a constraint.
Legacy systems still rely on batch reviews and static rule sets, but modern risk demands real-time detection. While a team sorts through yesterday’s alerts, today’s bad actors have already moved on. In a modern compliance stack, alerts escalate instantly, investigations begin without delay and teams operate with the full context of fraud and AML data together, not weeks apart or in separate dashboards.
Integrated Intelligence Wins
Integration isn’t just about efficiency; it’s also about defensibility. Regulators increasingly expect cross-functional collaboration between fraud, compliance, legal and cybersecurity teams. They look for real-time data sharing, timely filings and documentation that proves end-to-end risk visibility. Operating in silos doesn’t just slow teams down, it can increase liability.
Unified platforms give risk teams a complete picture. When fraud behavior is cross-referenced against ongoing transaction monitoring, alerts are evaluated in the context of user behavior and the result is better prioritization, fewer false positives and stronger outcomes. Suspicious cases close faster. And the system evolves as threats evolve.
Integrated systems also eliminate reliance on sprawling tech stacks. Rather than juggling multiple vendors, disjointed APIs or internal patches, companies can unify risk management within a single platform. This lowers the total cost of ownership, simplifies governance, improves data quality and strengthens the institution’s entire financial crime response posture.
Build for What’s Next, Not Just What’s Now
The question isn’t whether your current system works today. The question is whether it will still work tomorrow under mounting pressure. Whether it can scale across geographies. Whether it can satisfy the next round of regulatory updates. And whether it gives your team the speed, context and control they need to act with confidence.
A fraud system built without compliance in mind quickly becomes a liability. A compliance system built without a fraud context becomes an unproductive echo chamber. But together, they form a symbiotic layer of protection that evolves with the business.
Regulators aren’t waiting. Neither are fraudsters. And your systems — the ones you built in a different phase of your company’s journey — may not be ready for what’s next. If your compliance architecture slows you down, exposes you to fines or fails to protect your business from emerging threats, it’s time to rethink the build-versus-buy conversation. Because in this climate, what you don’t detect in real time will cost you — in revenue, in trust and regulatory risk.
Companies that continue to operate piecemeal will spend more time reconciling internal inefficiencies than defending against real threats. Those that modernize with integrated defenses will move faster, respond smarter and remain compliant under pressure.
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