FRAML: The Fusion of Fraud and AML

The Case for Convergence

At the heart of FRAML is a central question: How can institutions better coordinate fraud and AML efforts, each with its own investigative focus, regulatory mandates, and performance priorities, without losing the strengths that make them effective on their own? After all, both disciplines target interconnected criminal behavior – but through different lenses, timelines, and goals.

And yet, despite these differences, their operational realities often overlap; illicit gains from fraud need to be laundered. Money laundering schemes frequently involve fraudulent activities, including identity theft, synthetic accounts, or false invoicing. However, in most institutions, fraud teams and AML units continue to operate with different systems, data sets, and priorities.

How FRAML Promises to Bridge the Gap

Advocates for FRAML argue that this disconnect allows criminals to exploit institutional blind spots. The solution, they say, is a shared platform and strategy that enables financial institutions to:

• Detect threats earlier by consolidating intelligence
• Streamline investigations across functional boundaries
• Cut costs by retiring redundant systems
• Improve regulatory response with a single audit trail

One such solution is RiskShield by INFORM, an integrated platform that unifies real-time fraud detection, AML transaction monitoring, sanctions screening, and customer onboarding into a single AI-powered environment.

The Technology Behind FRAML

Integrated platforms like RiskShield often rely on hybrid AI, combining traditional expert rule systems with machine learning and advanced analytics techniques such as:

• Dynamic customer profiling
• Behavioral anomaly detection
• Fuzzy logic for ambiguous patterns
• Graph-based network detection
• Explainable AI for transparency and compliance

Explainable AI, in particular, helps bridge the trust gap often cited by compliance and audit teams skeptical of black-box machine learning systems. At the same time, these systems aim to provide millisecond-level decisions while maintaining auditability – a critical demand from regulators and internal governance teams alike.

Limits, Risks, and Trade-offs

Despite the appeal of FRAML, not everyone is convinced. Some industry voices raise three primary concerns:

1. Governance Complexity

Bringing together two disciplines with different regulatory mandates and investigative mindsets is no small feat. Fraud prevention prioritizes speed and customer experience; AML programs are designed for thoroughness and regulatory defensibility. Merging them can create conflicting priorities and blur lines of accountability.

2. Data Integration Risks

Unifying data from multiple departments sounds good in theory, but achieving a clean, compliant 360° customer view is technically and organizationally challenging. Poor integration can lead to incomplete risk assessments or excessive false positives, ultimately undermining both fraud detection and AML performance.

3. Vendor Lock-In & Flexibility

Some institutions worry that a unified system reduces flexibility. What happens if the fraud detection engine needs replacing but the AML component is still working? Does one monolithic platform stifle innovation and adaptability?

Balancing Ambition with Caution

To address these concerns, solutions like RiskShield emphasize modularity and customer control. According to INFORM, RiskShield’s architecture allows financial institutions to:

• Configure detection scenarios independently
• Integrate external tools through open APIs
• Manage rules, models, and workflows without vendor dependency
• Deploy as SaaS (or in configurations aligned with internal IT requirements)

Looking Ahead: The Future of FRAML

FRAML is not a silver bullet, nor is it a passing trend. It’s a strategic evolution that, when implemented thoughtfully, can deliver significant benefits – faster detection, stronger compliance, and lower costs. But as with any transformation, success requires more than just technology. It calls for new workflows, shared KPIs, cross-functional teams, and a cultural rethink of how financial crime is tackled.

As the financial crime landscape grows in complexity, with rising threats like synthetic identity fraud, mule networks, and crypto-laundering, the need for holistic, intelligent solutions is clear. Whether institutions choose full FRAML integration or selective convergence, the message is the same: silos are a vulnerability and bridging them is now a strategic imperative.

At events like FCCF 2025, the debate over FRAML will likely continue. But one thing is certain: The institutions that find the right balance between integration and flexibility will be best positioned to outpace both criminals and compliance mandates.