Decoding the Deceit: Essential Terms for New Fraud Analysts 

What is Fraud?

Fraud is defined by the Commonwealth Fraud and Corruption Control Framework "dishonestly obtaining (including attempting to obtain) a gain or benefit, or causing a loss or risk of loss, by deception or other means". 

Fraud involves three core elements, the act of theft itself, the methods of concealment, and the conversion of stolen assets.

AML (Anti-Money Laundering)

AML encompasses the set of procedures, laws, and regulations designed to prevent criminals from disguising illegally obtained funds as legitimate income. Money laundering is a core enabler for many illicit activities, including fraud. Fraud analysts often work closely with AML teams to identify suspicious financial flows that could indicate underlying fraud schemes.

KYC (Know Your Customer)

KYC refers to the mandatory process of identifying and verifying the identity of clients. It's a critical component of anti-money laundering (AML) and anti-fraud efforts. By gathering and verifying customer information (e.g., name, address, date of birth, government ID), financial institutions and businesses can assess risk, detect suspicious activity, and prevent illicit transactions.

Suspicious Matter Report (SMR)

An SMR is a document that financial institutions are required to file with the financial intelligence unit, AUSTRAC, when they suspect that a transaction or series of transactions may involve money laundering or other illegal activities, including various forms of fraud. Understanding when and how to file a SMR is a critical responsibility for fraud analysts.