Fraud prevention in banking has never been more challenging. The rapid evolution of digital banking and increasingly sophisticated fraud tactics have forced financial institutions to rethink how they approach financial crime. Aion Bank, a digital-first institution and Banking-as-a-Service provider operating across Europe, has taken a unique approach to combat fraud and money laundering.

In an insightful discussion, Konrad Krupinski, Head of the Financial Crime Prevention team at Aion Bank, shared his team's challenges and the innovative ways they have structured their operations to mitigate risk and protect customers. Their model breaks down traditional silos, integrates fraud prevention with compliance, and leverages real-time monitoring to stay ahead of criminals.

"We do not have within the bank a typical silo approach," Konrad explained. "We have everything combined, whether it’s fraud-related, AML-related, or law enforcement cooperation. We make sure all elements work together."

The Structure of Fraud Prevention at Aion Bank

Unlike many traditional banks that separate fraud prevention, anti-money laundering (AML), and compliance into distinct teams, Aion Bank has built a more integrated model that handles fraud prevention across all the bank's geographies. Konrad’s team operates as the first line of defence against financial crime. Their remit includes fraud prevention, transaction monitoring, and customer due diligence, all handled by a remote team based across multiple countries.

Aion’s second line of defence is the compliance team, based primarily in Belgium. This team oversees the first line, ensures regulatory alignment, and liaises with the National Bank of Belgium, the bank’s primary regulator. Finally, an internal audit department acts as the third line of defence, conducting independent assessments with the support of external consultants when needed.

"For each line of defence—whether it's my team in FinCrime or the compliance team—we serve as a reference point for fraud prevention, detection, and AML operations. This structure helps us react quickly and effectively."

By integrating fraud and AML efforts into one team, Aion Bank ensures a holistic approach to financial crime prevention. Whether dealing with fraud cases, responding to law enforcement requests, or implementing new regulations, the structure enables faster decision-making and a more coordinated response.

Challenges in Fighting Financial Crime

The financial crime landscape is constantly evolving. Konrad highlighted several key challenges that his team faces:

1. Social Engineering and Investment Scams

One of the biggest fraud trends observed by Aion Bank has been investment scams, particularly those targeting customers in Poland. Fraudsters convince victims to open accounts and unknowingly transfer funds to criminals. Unlike traditional fraud, where stolen credentials are used without the victim’s knowledge, these scams involve customers voluntarily making transfers under false pretences.

"The biggest challenge we’ve seen is fraudsters using social engineering techniques to convince victims to transfer money themselves," Konrad notes. "They manipulate people into believing they are making legitimate investments, when in reality, they are funding fraudsters."

2. Banking-as-a-Service Risks

Aion Bank provides banking-as-a-service (BaaS) to fintech partners. In some cases, these partners who operate under Aion’s banking licence, serve end customers. One of the biggest risks has been fraud occurring in these ecosystems, particularly when Aion does not have direct relationships with end customers.

"For our white-label customers, we provide fraud prevention, financial crime compliance, and monitoring all bundled together," said Konrad. "However, when we don’t onboard the customers ourselves, it creates challenges in ensuring all fraud risks are mitigated effectively."

3. Real-Time Fraud Mitigation

Fraudsters operate quickly, and financial crime teams must detect and block suspicious activity in real time. Krupinski emphasised the importance of automation and real-time monitoring systems to identify abnormal transaction patterns and prevent fraudulent payments before they are processed.

"If you want to be efficient in fraud prevention, real-time monitoring is a must," he states. "We cannot afford to react to fraud after the fact. Prevention has to happen in the moment."

4. Cross-Border Risks

As a pan-European bank, Aion must navigate regulatory and fraud risks across multiple jurisdictions. Criminal tactics vary by region, and regulatory requirements differ, making it essential to customise fraud prevention strategies for each market while maintaining a unified approach.

Tackling Fraud with a Proactive Approach

To combat these challenges, Aion Bank has implemented several key strategies:

1. Automation and Real-Time Fraud Detection

Aion Bank has developed real-time fraud monitoring systems that analyse transaction patterns and flag suspicious activity. By setting dynamic rules and thresholds, the system can detect anomalies such as high-frequency transactions or unusual transfers from new accounts.

"We implemented specific rules that check the frequency of transactions, the cumulative amounts, and other risk indicators," Konrad explained. "By collaborating with our partners, we managed to significantly reduce fraudulent transactions."

2. Eliminating Siloed Fraud Prevention Teams

Traditional banks often separate fraud, AML, and compliance into distinct departments, leading to slow decision-making and disjointed responses. Aion Bank merged these functions into a single team, ensuring that fraud investigators have access to AML data and vice versa.

"This approach gives us a wide overview of financial crime," says Konrad. "We don’t have separate teams dealing with AML, fraud, and law enforcement requests. Everything is managed within one integrated function."

3. Customer Authentication and Security Measures

Aion Bank has designed its online banking services to minimise fraud risks. Unlike traditional login methods that rely on usernames and passwords (which can be stolen in phishing attacks), Aion requires customers to generate a one-time code from their mobile app to access online banking.

"This is a very solid anti-phishing and anti-fraud measure," Konrad notes. "It makes it much harder for fraudsters to gain unauthorised access."

4. Enhanced Monitoring of Banking-as-a-Service Partners

To mitigate risks from banking-as-a-service partners, Aion has implemented strict monitoring measures for transactions processed through these partners.

"We introduced automated checks for account age, transaction volume, and customer demographics," Konrad explains. "If we see a new customer making large transactions in the first few days, we flag and investigate immediately."

The Future of Fraud Prevention

Looking ahead, Konrad sees real-time fraud prevention and automation as essential for the industry. While AI has become a popular buzzword, Aion Bank currently relies on supervised models rather than full AI-driven fraud detection.

“AI can bring value, but at the end of the day, you need humans to review alerts," he says. "We rely on supervised models where we validate and refine the outcomes rather than letting AI make all the decisions."

He also stressed that while technology plays a critical role in fraud prevention, humans remain the weakest link. Many fraud schemes still rely on social engineering, tricking victims into voluntarily transferring money.

"Always, the human is the weakest element," Konrad concludes. "That’s why customer education is just as important as technology when it comes to preventing fraud."

Conclusion

Aion Bank’s innovative approach to fraud prevention demonstrates that breaking down silos, integrating teams, and leveraging automation can significantly enhance financial crime mitigation. As fraud tactics evolve, banks must stay ahead by continuously improving their defences, fostering cross-team collaboration, and maintaining real-time vigilance to protect customers and financial systems.

Join us at our flagship conference in Brussels on May 22 where our dedicated Fraud stage will feature insights from industry leaders on the latest trends in anti-money laundering, fraud prevention, PSR & IPR, digital identity, adaptive risk management, the latest technologies to help you balance risk, fraud and cost management effectively and more.