Financial institutions are struggling to balance rising fraud risks with the need to maintain strong BSA/AML programs, especially as digital channels expand. Effective fraud and BSA coordination—supported by clear communication, strong internal controls, and timely SAR reporting—is essential to protecting customers and ensuring regulatory compliance. This article highlights key fraud trends, including elder exploitation, new‑account fraud, check fraud, scams, and account takeovers, and emphasizes that training and collaboration between fraud and BSA teams help institutions detect issues earlier and respond more effectively.

Our financial economists introduce the first cyber-risk forecasting framework covering nearly all U.S. banks, predicting whether a bank will experience a cyber incident within the next year. Combining cybersecurity ratings, actual incident data, and regulatory reports, the model identifies key risk factors—unpatched software, weak encryption protocols, and specific balance-sheet characteristics—and shows that vulnerabilities are most dangerous when they appear together. For the highest-risk banks, incident probability reaches 90%. The framework addresses a critical gap: although cyber incidents could threaten financial stability, supervisors and banks lack standard measures of vulnerability. It strengthens oversight and risk management using existing data sources without imposing new reporting requirements.