What is FRAML? U.S. mid-sized banks’ new weapon against financial crime

By Gloria Methri

Faced with rising financial crime risks, escalating compliance costs, and mounting resource constraints, mid-market banks and credit unions in the United States are rapidly adopting a converged financial crime strategy, which brings together fraud prevention and anti-money laundering (AML) under a single, unified framework. According to a new report by Hawk, an AI-powered financial crime detection platform, in collaboration with Celent, this shift toward “FRAML” (Fraud + AML) marks a strategic evolution in how community-focused financial institutions manage risk.

The study, ‘Trends in Fraud & AML Convergence at US Mid-Market Banks & Credit Unions,” surveyed risk and compliance leaders at over 100 institutions and found that 100% of respondents have either already integrated AML and fraud operations or plan to do so in the near future. This sweeping trend underscores the urgency and appeal of convergence as mid-sized institutions grapple with overlapping risks, siloed technologies, and a need for faster, more intelligent response systems.

Key findings from the report highlight the motivations and measurable benefits behind FRAML adoption:

• 53% of institutions plan to consolidate their AML and fraud operations.
• 40% are already actively merging systems, workflows, or departments.
• 77% expect to save over $1 million within five years of convergence.
• 36% anticipate savings of more than $5 million.
• Among those further along in the process, 50% have already realised over $5 million in cost savings.

The convergence isn’t just about savings—it is about effectiveness. Disparate systems often create investigation blind spots and duplicated efforts, weakening response times to threats. FRAML, by contrast, enables a unified view of risk, aligning workflows and enhancing operational agility.

“The report underscores what our customers are seeing—that bringing AML and fraud together in one comprehensive solution delivers significant cost savings, better risk coverage and improved investigation capabilities,” said Tobias Schweiger, CEO and co-founder of Hawk. “At Hawk, we have always believed that a holistic, real-time, AI-driven approach is the most effective way to fight financial crime. It’s exciting to see US banks and credit unions embracing this vision.”

The role of artificial intelligence in FRAML frameworks is especially noteworthy. As the volume and velocity of financial crime increase, AI provides scalable, adaptive detection mechanisms that surpass traditional rule-based models. The report reveals:

• At least 57% of institutions are utilising AI to mitigate false positives, a significant challenge in legacy systems.
• Others are leveraging AI to identify emerging threats, cleanse and link data across silos, and accelerate investigation processes.

These gains are crucial for mid-market banks and credit unions, which often lack the in-house resources of larger institutions but still face similar compliance and risk obligations. A converged approach—augmented by AI—not only levels the playing field but often positions these nimble institutions ahead of the curve.

“Mid-market banks have the most to gain from converging AML and fraud detection,” said Neil Katkov, PhD, Director – Risk at Celent. “This explains why every single bank we surveyed is either integrating AML and fraud already or is planning to do so—because they know that a FRAML approach will lead to improved efficiency, better outcomes, and contained costs.”

As regulators increasingly expect a more comprehensive and proactive approach to financial crime, FRAML provides a future-proof model for risk management. For mid-market players under pressure to do more with less, the convergence of fraud and AML-powered by real-time AI insights, represents not just a trend but a fundamental shift in financial crime strategy.