A form of identity theft where a bad actor gains unauthorized access to an existing user’s account by stealing credentials through phishing, credential stuffing, social engineering, or malware.

Unauthorized or deceptive transactions conducted through the Automated Clearing House (ACH) network, which processes electronic fund transfers between banks.

The process of monitoring and analyzing news sources, public records, and online media to identify negative information about customers or prospective clients that may indicate involvement in financial crime, fraud, corruption, or other illicit activities.

The set of laws, regulations, and organizational procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income.

A scam in which a victim is manipulated into voluntarily sending a payment to a fraudster’s account, typically through social engineering, impersonation of trusted entities, or fake invoices.

A United States federal law enacted in 1970 that requires financial institutions to assist government agencies in detecting and preventing money laundering.

The practice of analyzing patterns in user behavior—such as typing cadence, mouse movements, navigation habits, session timing, and device interaction—to build a dynamic risk profile.

A security method that uses unique biological characteristics—such as fingerprints, facial geometry, iris patterns, or voiceprints—to verify a user’s identity.

A first-party fraud scheme where a customer builds good credit history, maxes out every available line at once, then stops paying.

Also known as friendly fraud or first-party fraud abuse, chargeback fraud occurs when a consumer makes a legitimate purchase and then disputes the charge with their card issuer, falsely claiming the transaction was unauthorized or that goods were never received.

An automated cyberattack in which stolen username-password combinations from data breaches are systematically tested against multiple online services, exploiting the widespread practice of password reuse.

The process of evaluating a borrower’s creditworthiness and determining loan terms using data-driven models.

A statistical method of quantifying a borrower’s likelihood of repaying debt, typically expressed as a numerical score.

A report that U.S. financial institutions must file with FinCEN for each cash transaction exceeding $10,000, or multiple related cash transactions that total more than $10,000 in a single business day.

The process financial institutions use to verify the identity of their customers and assess the risk they pose.

The process of augmenting raw transaction or customer data with additional context from internal and external sources to improve the accuracy of risk decisions.

A software system that automates complex decisions by evaluating data inputs against a configurable set of rules, models, and policies.

The use of artificial intelligence—specifically deep learning techniques such as generative adversarial networks (GANs)—to create highly realistic but fabricated audio, video, or images for fraudulent purposes.

A technique that collects and analyzes a combination of attributes from a user’s device—including browser type, operating system, screen resolution, installed plugins, time zone, language settings, and hardware characteristics—to create a unique identifier.

The process of identifying when a user is accessing a digital service through software that simulates a mobile device or browser environment rather than a genuine physical device.

An elevated level of customer verification and monitoring applied to higher-risk individuals and entities, such as politically exposed persons (PEPs), customers from high-risk jurisdictions, and those involved in complex or unusually large transactions.

Artificial intelligence models and techniques designed to produce human-understandable explanations for their predictions and decisions.

A legitimate transaction or customer activity that is incorrectly flagged as suspicious by a fraud detection or compliance system.

A bureau of the U.S. Department of the Treasury tasked with safeguarding the financial system from illicit use, combating money laundering, and promoting national security through the collection, analysis, and dissemination of financial intelligence.

Fraud committed by the actual account holder using their own identity (or a manipulated version of it) to deceive a financial institution.

The use of technology, data analytics, rules, and machine learning models to identify potentially fraudulent activities in real time or near-real time.

A type of first-party fraud where a legitimate cardholder makes a purchase and then disputes the charge, claiming it was unauthorized.

A data analysis technique that models relationships between entities—such as customers, accounts, devices, addresses, and transactions—as a network graph to uncover hidden connections and patterns indicative of fraud or money laundering.

The process of confirming that an individual is who they claim to be, typically by validating government-issued identification documents, biometric data, and personal information against authoritative data sources.

The analysis of Internet Protocol (IP) address data to derive risk signals such as geolocation, proxy or VPN usage, hosting provider classification, and historical association with malicious activity.

The due diligence process used to verify the legitimacy and ownership structure of a business entity before establishing a commercial relationship.

The regulatory requirement and operational process by which financial institutions verify the identity of their clients and assess their suitability, risk profile, and potential for involvement in money laundering or terrorism financing.

A biometric security technique that verifies a user is a real, physically present person rather than a spoofing attempt using a photo, video replay, mask, or deepfake.

The application of machine learning algorithms—including supervised, unsupervised, and deep learning models—to detect fraudulent patterns that rules-based systems cannot capture.

An individual who transfers illegally obtained money on behalf of criminals, often through their personal bank account.

A security mechanism requiring users to provide two or more independent verification factors—something they know (password), something they have (device or token), and something they are (biometric)—before granting access.

Adherence to the rules and operating guidelines established by Nacha (formerly the National Automated Clearing House Association), which governs the ACH network in the United States.

The examination of relationships, connections, and communication patterns between entities to identify suspicious structures, hidden relationships, and organized criminal activity.

A division of the U.S. Department of the Treasury responsible for administering and enforcing economic sanctions programs against targeted foreign countries, regimes, terrorists, international narcotics traffickers, and proliferators of weapons of mass destruction.

The risk of fraud, identity theft, or compliance violations that arises during the customer or merchant onboarding process.

The process of checking individuals and entities against PEP databases to identify politically exposed persons and their associates during onboarding and on an ongoing basis.

A social engineering attack in which a fraudster impersonates a trusted entity—such as a bank, employer, or government agency—through email, text message (smishing), or voice call (vishing) to trick victims into revealing sensitive information, clicking malicious links, or transferring funds.

An individual who holds or has recently held a prominent public function—such as a head of state, senior government official, judicial authority, or military leader—along with their family members and close associates.

A model's estimate of how likely a borrower is to fail to repay over a set period, usually 12 months.

The capability to evaluate risk and make automated approve, decline, or review decisions on transactions, applications, or events within milliseconds of their occurrence.

The process of making automated, data-driven decisions about whether to approve, decline, or escalate a transaction, application, or customer interaction based on its assessed risk level.

A software component that executes predefined conditional logic (if-then rules) to automate decisions in real time.

The process of checking customers, counterparties, and transactions against government-maintained lists of sanctioned individuals, entities, and countries.

A risk-based security approach where additional verification is required only when a transaction or action exceeds a defined risk threshold, rather than applying the same level of friction to every interaction.

A regulatory requirement under the EU’s Revised Payment Services Directive (PSD2) mandating that electronic payments use at least two independent authentication factors from three categories: knowledge (password/PIN), possession (device/token), and inherence (biometric).

The illegal practice of breaking up large financial transactions into multiple smaller ones to avoid triggering regulatory reporting thresholds—specifically the $10,000 CTR filing requirement in the United States.

A regulatory filing that financial institutions must submit to FinCEN (in the U.S.) or equivalent authorities when they detect transactions or behavior that may indicate money laundering, terrorism financing, fraud, or other financial crimes.

A sophisticated form of identity fraud in which criminals fabricate a new identity by combining real and fictitious personal information—such as a legitimate Social Security number paired with a fake name, date of birth, and address.

Fraud committed by an external bad actor who uses stolen or fabricated identity information to impersonate a legitimate individual without their knowledge or consent.

The continuous, systematic surveillance of customer transactions—including transfers, payments, deposits, and withdrawals—to identify patterns indicative of fraud, money laundering, or other illicit activity.

A documented pattern or method of financial crime that describes how specific types of fraud, money laundering, or terrorism financing are carried out.

The natural person who ultimately owns or controls a legal entity, either directly or indirectly, typically defined as anyone holding 25% or more of ownership interest or exercising significant control.

Fraud detection rules that measure the frequency, count, or cumulative value of events within a defined time window.

The process of checking individuals, entities, and transactions against regulatory and law enforcement watchlists—including sanctions lists, terrorist financing lists, and most-wanted lists—to ensure compliance and prevent dealings with prohibited parties.

The use of electronic communications—including email, phone, internet, or wire transfers—to carry out a scheme to defraud.