Jancso 2025 Reinforcement In The Fight Against Online Criminal Activities Affecting The Fi
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Article by Gábor Jancsó, a former Deputy State Secretary for Criminal Legislation at the Ministry of Justice, in Economy and Finance, Vol. 12, Issue 3, September 2025, on fighting online fraud against the financial sector. He writes that online fraud grew exponentially as banking habits changed after the coronavirus pandemic, and that older policing methods could not keep up. The article describes public-private cooperation, which it calls the PPP system, through the KiberPajzs forum and a Ministry of Justice working group. It covers cooperation agreements between investigators and banks, a Central Fraud Filter System, objective reporting and information sharing introduced over the previous year and a half.
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“Jancso 2025 Reinforcement In The Fight Against Online Criminal Activities Affecting The Fi.”
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NEW LEGAL INSTITUTIONS IN THE FINANCIAL SECTOR 301
ECONOMY AND FINANCE • VOL. 12. ISS. 3 • SEPT 2025 • DOI: 10.33908/EF.2025.3.2
REINFORCEMENT IN THE FIGHT AGAINST ONLINE
CRIMINAL ACTIVITIES AFFECTING
THE FINANCIAL SECTOR
Presentation of new legal institutions in cooperation
between the public and private sectors
Gábor Jancsó1
ABSTRACT
Taking advantage of the digital financial habits that have changed in the wake of
the coronavirus pandemic, the number of online frauds affecting the financial
sector has begun to grow exponentially. This has resulted in the emergence of
a qualitatively new criminal phenomenon that cannot be effectively addressed
with the quantitative law enforcement solutions that were typically used in the
past. However, the specific characteristics and capabilities of the financial sector
make it possible to exploit new opportunities for cooperation between the public
and private sectors (private-public-partnership, PPP system), which may be able
to curb this phenomenon. This article aims to present the cooperation forums
that have been established in relation to online fraud (KiberPajzs and the work-
ing group coordinated by the Ministry of Justice), as well as the functionality and
added value of the PPP system. We also describe the results achieved, the meas-
ures introduced over the past year and a half, and the legal institutions: coopera-
tion agreements between investigative authorities and banks, the Central Fraud
Filter System, objective reporting, and information sharing.
JEL codes: G21, K14, K24, K42, O38
Keywords: online fraud, public-private cooperation, PPP system, financial service
provider, crime prevention, law enforcement, cooperation agreement, KVR, ob-
jective reporting, information sharing
1 Gábor Jancsó is a correspondent author and former Deputy State Secretary for Criminal
Legislation at the Ministry of Justice. Email:gabor.jancso@im.gov.hu.
302 GÁBOR JANCSÓ
1. INTRODUCTION – THE BASICS OF CRIMINAL JUSTICE
The author is a practicing criminal lawyer who believes that the state’s monopoly
on the use of force, the state’s criminal law claims, the state’s obligation to pros-
ecute crimes, and the availability of the necessary tools are not a matter of debate
or discussion, but rather an axiom that defines the foundations and framework
of criminal justice. The rule of law and peaceful social coexistence are based on
the principle that the state’s claim in the field of criminal justice is essentially
exclusive, and that the enforcement of individual claims is less tolerated. Justified
self-defence and, in cases of extreme necessity, the enforcement of legitimate or
perceived legitimate claims in an impermissible manner may even constitute a
criminal offense.
Bibó writes in his treatise Ethics and Criminal Law: “The historical development
of criminal law provides the strongest support for this interpretation of the func-
tion of punishment. The appropriation of private revenge by the community was
the path through which criminal law developed. It was not the victims who first
sought public protection against the criminals, but the defendants against the
avenging relatives and the lynch mob. At the forefront of all criminal law dogma
is the legal-historical observation that criminal law came into being whereby the
public gradually took the right of retribution out of the hands of individuals.
(Bibó, 1986, 174).
For criminal law, therefore, the state’s system of tasks and guarantees is an indis-
putable fundamental principle, in light of which the regulatory logic of criminal
law is that the state must provide the tools and resources necessary to perform the
related tasks. Although our criminal procedure law2 tolerates private investigation
(specifically referred to as a defence right)3 within the legal framework, it does not
support it in substance, and there is no question of providing additional resources
or sharing official resources and information. Even within the framework of the
institutional system for correcting indictments, i.e., for correcting any deficien-
cies in the indictment (the victim acting as a supplementary private prosecutor,
or, in the case of recently introduced priority crimes related to the exercise of pub-
lic authority or the management of public property, a supplementary indictment
that can essentially be filed by anyone in a separate proceeding)4 , it is not guar-
anteed that a person who has been granted the right to bring charges alongside
the state will be able to use the resources of the investigating authority. The state’s
2 Act XC of 2017 on Criminal Procedure (hereinafter: Be.)
3 Be. Section 42(2)(c).
4 Be. Chapters CV and CV/A.
NEW LEGAL INSTITUTIONS IN THE FINANCIAL SECTOR 303
monopoly on prosecution therefore allows the victim or other authorized person
to bring (supplementary) charges based on their different legal position or other
information at their disposal, but the use and utilization of the investigative tools
and the applicability of state coercion are no longer guaranteed. With the filing
of charges, court proceedings and the adjudication of the matter by the court can
therefore be “enforced,” but the enforcement of the investigation and the use of
the investigative authority’s powers, tools, and resources for private purposes are
not tolerated. Even in private prosecution proceedings, the use of the investigative
authority’s resources for extremely limited purposes is only conceivable for the
purpose of establishing the identity of the person reported and exclusively under
the supervision of the court.
It is therefore clear that the criminal justice system does not traditionally consider
victims or other “civil” actors as partners.
In recent years, however, social trends have emerged that are fundamentally
changing this operating mechanism. Advances in information technology and
the challenges facing the financial sector have led to the development of new reg-
ulations and working methods in the field of law enforcement, with the criminal
justice system beginning to view the private sector as a partner and the sharing of
available resources becoming a requirement.
2 FORMS OF COOPERATION IN THE FIELD OF
LAW ENFORCEMENT
Cooperation between law enforcement agencies and criminal sciences in the
broader sense with other agencies and fields is not unprecedented. The use of
criminal data and experience in urban architecture, for example, or cooperation
with civil defence forces are not new forms of cooperation. Architectural crime
prevention (Barabás ed., 2023) involves the criminological analysis of crime and
the use of crime data – essentially data of public interest, crime statistics, and the
scientific findings derived from them – so the “cooperation” and use of informa-
tion is fairly one-sided. Cooperation with civil guards5 and local civil initiatives is
less strategic in nature and more a matter of supplementing the law enforcement
capacities of the police (primarily in the areas of crime prevention and deterrence
of offenders caught in the act); the institutionalized sharing of specific informa-
tion from police criminal resources is not possible. At the same time, there is no
5 Act CLXV of 2011 on the Civil Guard and the Rules of Civil Guard Activities.
304 GÁBOR JANCSÓ
doubt that, in line with its objectives, this cooperation is capable of functioning at
an excellent level and with great efficiency.
In our opinion, even these limited and very briefly presented cooperation solu-
tions show that law enforcement agencies consider cooperation to be possible only
at a general level, distancing themselves from individual criminal phenomena. In
contrast, however, the forms of cooperation that have developed or are developing
in the financial sector are qualitatively different, and we can speak of a real divi-
sion of tasks and mutual sharing of resources/information.
3 CONDITIONS FOR THE DEVELOPMENT OF COOPERATION
NEEDS IN THE FINANCIAL SECTOR
In order to bring about a qualitative change of approach in the financial sector in
relation to public-private partnerships (PPP systems), the prevailing combination
of several specific compelling circumstances and conditions was required.
3.1 Online fraud, a qualitatively new phenomenon in crime
First, it was necessary to recognize that online fraud represented a new social and
criminal phenomenon. In previous years, when certain types of crime (mostly
property crimes) were on the rise, it was found that certain phenomena could be
dealt with relatively effectively by applying appropriate administrative and work
organization solutions and by appropriately reallocating official capacities. For
example, the proliferation of pickpocketing in the 2000s was successfully ad-
dressed by the establishment of a special police unit within the Budapest Police
Headquarters, followed by an increase in the number of surveillance cameras; Car
theft and the manipulation of car mileage were addressed by tightening the rules
on origin checks, technical inspections, and registration6; the recent increase in
grandparent scams7 was addressed by awareness campaigns and increased police
action, resulting in the arrest of the organizers.
A common feature of crimes that proliferated in space or time was that their
spread was ultimately limited by physical constraints. Committing multiple
crimes required more resources, mostly human resources, on the part of both
the organizers and perpetrators. In addition, the resources used to commit the
6 https://www.mgoe.hu/nem-csak-magyar-betegseg-az-oratekeres-de-javul-tendencia.
7 https://vansegitseg.im.gov.hu/idosek-celkeresztben-igy-vadasznak-aldozataikra-az-unokazos-
csalok.
NEW LEGAL INSTITUTIONS IN THE FINANCIAL SECTOR 305
crimes “only” proportionally increased the achievable “results.” With the change
in methods of committing crimes, the increase in crime primarily resulted in a
quantitative change, which basically required a quantitative response (additional
resources), and with appropriately innovative administrative solutions, it was
even possible to achieve resource savings by making certain phenomena impos-
sible (e.g., technical and administrative solutions that make it impossible to ma-
nipulate car odometers).
In contrast, in the case of online fraud, we are faced with a new type of crime, a
qualitative change. On the one hand, in this case, the quantitative change in crime
is essentially independent of the number of people involved in the commission of
the crime. With IT solutions, an infinite number of attempts can be made to the
detriment of an infinite number of victims, which does not require an infinite
number of human resources, and the activity is not limited by space (Kovács–Ter-
ták, 2024). On the other hand, it can be said that it is difficult to imagine a system
that cannot be circumvented, especially if the crime is committed by deceiving
the victim, i.e., with the active participation of the victim (Biró–Kiss, 2024).
The “administrative” solutions that have proven useful in the past are thus less ef-
fective. Of course, it would be conceivable to tighten security measures (by shift-
ing them to the offline space) to a degree that minimizes the risk of abuse, but this
would undermine the essence and convenience of the current financial system
and would not be compatible with the results of the digital revolution (Schenk,
2018). This path therefore does not seem viable; it is difficult to imagine a simple
method that would make online fraud impossible from one day to the next while
retaining all the innovative and convenient functions of online financial services.
Online fraud is therefore a qualitatively new phenomenon, and increasing the ca-
pacity of law enforcement agencies will not provide an adequate solution. A quali-
tative challenge cannot be addressed with a quantitative solution alone, so it is
reasonable to look for an alternative solution, which is, in fact, more than obvious.
3.2 Lack of crime prevention capabilities and capacities in the case of
cybercrime targeting IT systems
In addition to the urgent need to find alternative solutions, the evolution of the
PPP system in the fight against online fraud has also been fundamentally deter-
mined by the specific characteristics and capabilities of the financial sector.
The author of this article first heard an interesting presentation on the potential
of the PPP system and the related change in approach at a conference on cyber-
306 GÁBOR JANCSÓ
crime held in December 20208 . The essence of the presentation was that in the
event of attacks on IT systems, the interests of the IT system operator and the law
enforcement authorities are the same, IT knowledge is significant and indispen-
sable on the part of the system operator, and thus the system operator can and
wants to contribute substantially to the effective conduct of criminal proceedings.
Although there are significant similarities between crimes that violate cybersecu-
rity and online fraud that “exploits” the vulnerability of the financial sector, in the
area of cybercrime that directly attacks IT systems, the public and private sectors
are far from being able to develop the same level of strategic cooperation as in the
case of online fraud affecting the financial sector.
In the case of operating IT security systems, two areas of interest can be identified
on the victim’s side, which fundamentally limit the possibilities for cooperation:
either we are talking about an IT developer operating a system that has numer-
ous customers (e.g., an operating system developer, a virus protection developer,
etc.), or a given entity (business association, private individual) that operates its
own IT system. In the first case, it is difficult to determine for what purpose the
vulnerability of the system can be exploited, as users do not form a homogeneous
system and can therefore become victims in many ways, for many reasons, pur-
poses, and motives. The primary goal of the developer is to fix the current vulner-
ability of the IT system, regardless of the purpose for which it was used or could
have been exploited, or the damage caused by the breach. In the case of entities
operating their own/unique IT systems, it would also be difficult from a forensic
point of view to generalize why the IT system of a given entity was attacked. The
crime committed is fundamentally unique. In the cases presented, therefore, after
the crime has been committed, there is indeed an interest in the effectiveness of
criminal proceedings and a capacity for cooperation on the part of the developer
and system operator, However, this is essentially a one-sided cooperation arising
in a specific case, aimed at the success of the criminal proceedings, which does
not differ in quality from the willingness and ability of the victims to cooperate
with the law enforcement authorities. The peculiarity in this case is obviously the
highly specialized professional IT knowledge identifiable on the part of the vic-
tims. However, there is no identifiable social or criminal phenomenon that could
be effectively addressed through the cooperation of the actors. In terms of preven-
tion and the prevention of future crimes – i.e., in a manner that is “backward”
from criminal proceedings – meaningful cooperation is not really conceivable.
The success of an attack on a given IT system ( ) is mostly independent of the
vulnerability of other IT systems. The vulnerability that makes a given IT attack
8 V4CyberPower Conference 3-4 December 2020. https://iws.gov.pl/en/konferencja-v4cyberpower/
NEW LEGAL INSTITUTIONS IN THE FINANCIAL SECTOR 307
possible is mostly discovered by the developer or operator of the system itself, and
law enforcement agencies cannot really add any significant value in this regard.
Vulnerabilities identified and corrected in this way cannot be linked to future
attacks that use completely new methods and exploit new vulnerabilities. In ad-
dition, the identified attack methods are IT solutions and data for which legal
issues relating to data protection and the protection of private or other secrets
are not relevant, so there is no obstacle to the developers concerned sharing their
experiences with each other without any further involvement from the authori-
ties. Once the vulnerability that triggered the security incident has been fixed,
the specific method used to carry out the attack becomes impossible to use again.
Finally, another fundamental difference is that in the case of attacks on IT sys-
tems, the group of victims (whether the developers of the IT system or the people
using it) is so heterogeneous that it is not possible to identify a group of people for
whom strategic cooperation aimed at addressing future vulnerabilities would be
meaningful.
3.3 The financial sector’s specific crime prevention capabilities
and capacity
Unlike cybercrime targeting IT systems, online crime affecting the financial sec-
tor presents a unique situation:
− the group of people affected is clearly defined and homogeneous (businesses
providing financial services),
− the aim of online fraud is not to attack the IT infrastructure of individual
service providers (due to the different systems, we cannot speak of a homoge-
neous phenomenon), but to attack the users of IT solutions,
− unlike eliminating IT vulnerabilities, where closing a security gap eliminates
the phenomenon, reducing the security risk of one user does not reduce the
security risk of other users, and it cannot even be ruled out that a user who has
been deceived before may become a victim of abuse again,
− the services provided to users by the financial sector and the solutions for
using them are fundamentally uniform and can be developed uniformly (fi-
nancial services),
− Perpetrators attack system users (customers) regardless of which financial ser-
vice provider they belong to, whereby the entire financial sector is targeted by
perpetrators through its large number of customers, and not just individual
financial service providers.
308 GÁBOR JANCSÓ
− the solutions used in the commission of the crime are not unique (e.g., techni-
cal tools/solutions used to commit the crime, “money mule account numbers”9
, target accounts, cash withdrawal locations, etc. (Nagy, 2018)),
− the financial sector has significant resources and excellent professionals who
operate and develop IT systems.
In this case, therefore, we are dealing with a mass phenomenon with homogene-
ous characteristics, in which
− specific characteristics of the offense,
− the capabilities and interests of the financial sector (Vass–Kovács, 2019),
− the capabilities and interests of law enforcement agencies
provided a real opportunity for strategic cooperation and division of tasks.
Strategic cooperation brings real added value to both parties involved (financial
service providers and law enforcement agencies), because expert-level support
for investigations is not only conceivable after a crime has been committed (as is
also possible in the case of cooperation on information systems), but also in the
prevention of future crimes. The latter means that, with the involvement of the
state and the authorities, the financial sector’s immune system can be significant-
ly strengthened and enabled to prevent further abuses. Furthermore, the form
of cooperation/task sharing on the part of the state/authorities can be not only
general and methodological in nature (as in the field of architectural crime pre-
vention, for example), but can also ensure the prevention of specific, individually
identifiable fraudulent transactions. Through cooperation, financial sector play-
ers can play a meaningful role in the investigation and securing of assets derived
from crime after the crime has been committed, while the authorities can play a
meaningful role in preventing further abuses. The end result is mutually reinforc-
ing, as not only can the effectiveness of criminal proceedings be increased, but the
number of crimes can also be reduced, meaning that existing authorities’ capaci-
ties can be utilized more efficiently and effectively. It would be vain to claim that
online fraud can be eliminated in this way, but it can perhaps be said that it can be
dealt with more effectively than with any previous unilateral solution.
9 Interim accounts that make it difficult to track funds, which are used periodically as collection
accounts or for transfer purposes.
NEW LEGAL INSTITUTIONS IN THE FINANCIAL SECTOR 309
4 KEY POINTS OF THE PPP SYSTEM AFFECTING
THE FINANCIAL SECTOR
There are two challenges to be addressed in the methodology of cooperation: in-
formation sharing (Vogel–Costa–Lassalle /eds., 2024/; EUCPN, 2023) and the ef-
ficient allocation of available resources.
4.1 Information sharing
There are four possible directions for the sharing of criminal intelligence affect-
ing the financial sector (Figure 1):
Figure 1
Directions of criminal information sharing affecting the financial sector
D
Financial Financial
C
B
Authority Authority
A
Source: own compilation
A: Information sharing between authorities is not new, and its framework is
precisely defined by legal provisions. In the case of information sharing between
authorities, there is no reason to differentiate according to the direction of shar-
ing (which authority shares/can share information with which authority), as the
regulatory logic is essentially the same: acting within the scope of its powers, the
authority obtains and shares the information necessary for the performance of
its tasks, when and under what conditions. In general, it can be said that the ac-
cess of authorities conducting criminal proceedings is extremely limited (certain
protected interests, such as operational interests or the classification of data for
national security purposes, may constitute an obstacle to disclosure).
B: Information sharing between financial institutions and authorities can be di-
vided into two parts according to the direction of sharing. The sharing of private
information with authorities is also extremely limited. Apart from certain prior-
310 GÁBOR JANCSÓ
ity interests (such as attorney-client privilege), the authorities conducting crimi-
nal proceedings have access to essentially any data. It is typical for access to data
to be subject to certain conditions (so-called external authorization), but this is
not intended to prevent access, but rather to keep it within reasonable limits.
The basic logic behind the flow of information to the authorities is that data must
be provided at the request of the authorities, and compliance with this request
can be enforced. This logic follows from the tasks of the authorities involved in
criminal proceedings and the coercive powers granted to them for this purpose.
The novelty of information sharing in the PPP construct contains two differences
in this respect. On the one hand, there is the sharing of information on one’s
own initiative (voluntary), and on the other hand, there is the increase in the ef-
fectiveness of information sharing in response to a request from the authorities
(compulsory).
However, these cannot be considered qualitative innovations in terms of the
possibility of information sharing, as the basic logic of the regulation has not
changed.
C: The other direction of information sharing between financial institutions and
the authorities, which points towards the private sector, does, however, represent
a qualitative difference. The logic of official procedures does not typically involve
the disclosure of information from their own systems. However, meaningful co-
operation and the involvement of the financial sector in the prevention of crime
is inconceivable without such information sharing. Of course, this cannot mean
an unlimited flow of information; establishing a framework that is appropriate
for the desired goal is a real regulatory challenge, and the framework for this had
to be created.
D: Finally, the issue of sharing information and data managed in the private sec-
tor needs to be reviewed. In the financial sector, this issue is fundamentally lim-
ited by the strict and deliberately established regulations on data collection and
banking secrecy, payment secrecy, securities secrecy, cash secrecy, and insurance
secrecy (hereinafter collectively referred to as “financial secrecy”). The financial
sector cannot become a huge database that can be managed without restrictions,
in which financial institutions freely share and use each other’s data to decide on
the measures they deem necessary for prevention. The restrictions necessary for
prevention (transaction bans) are part of the state’s compulsory monopoly, and
transferring them entirely to private hands, or “outsourcing” them, would raise
fundamental issues of the rule of law. At the same time, effective PPP cooperation
requires this type of information sharing, which also poses a significant regula-
tory challenge.
NEW LEGAL INSTITUTIONS IN THE FINANCIAL SECTOR 311
4.1 Efficient sharing of resources and tasks
Another challenge determining the viability of the PPP system is the effective
division of tasks, the coordination of the tasks of the two sectors in line with
their profiles, thereby ensuring the efficient use of the resources available in both
sectors. It is necessary to develop an effective solution that is in line with the con-
stitutional status of the actors involved and, at the same time, results in synergy
in terms of its overall effect, i.e., it is not merely suitable for providing twice as
many resources for a given task, whereby the task can be completed in half the
time. This only means a proportional – quantitative – increase in resources, but,
as we have already indicated, a quantitative response is not sufficient to meet the
qualitative challenge of online crime.
While maintaining the constitutional framework, it is not acceptable, for exam-
ple, to directly entrust the private sector with public tasks, official measures, and
coercive measures. The state has a monopoly on the use of force, and public tasks
related to law enforcement cannot be transferred. In addition to being one of the
essential features of the state, the system of responsibility and guarantees associ-
ated with its application cannot be ensured, while the framework of official pow-
ers has become necessary based on centuries of experience. Like their clients,
players in the financial sector belong to the private sphere, where equality is the
norm and the system of responsibility is balanced. In contrast, official decisions
and powers are characterized by asymmetry, and responsibility for the conse-
quences of decisions is based on different legal grounds. In addition to the fact
that vesting the financial sector with regulatory powers would have unforeseeable
consequences, presumably including a loss of trust on the part of customers, a
solution of this kind would not constitute an effective division of tasks, but would
merely mean outsourcing the lack of regulatory resources to the private sector.
Furthermore, it would be impossible to avoid developing the authorities, as out-
sourcing investigative tasks would lead to an increase in the number of criminal
proceedings, meaning that the legal side (courts, public prosecutors) would also
have to be developed. What is more, the criminal justice system would clearly be
unable to cope with the burden of the expected increase in the number of crimi-
nal proceedings.
Such a solution would also inevitably lead to contradictions between the sectors,
as the “short-term” interest of the financial sector would dictate that every single
act be prevented or remedied, while the operational interest of the investigative
authority would in many cases require the processes to be allowed to continue, at
least temporarily.
The opposite extreme solution is also inconceivable: making the investigative au-
thority’s resources fully available to the financial sector in order to ensure the
312 GÁBOR JANCSÓ
secure execution of financial transactions, the prevention of fraudulent legal
transactions, and the recovery of assets in the event of online fraud. Criminal
proceedings are fundamentally retrospective in nature, and the state has a wide
range of criminal law tools at its disposal because society has suffered (or is at im-
mediate risk of suffering) harm that justifies the use of all these tools. The crimi-
nal law toolkit cannot be used for crime prevention purposes, or only to a very
limited extent. In addition to the fact that the use of investigative tools to protect
the interests of the financial sector – which are otherwise indisputable – would
also violate fundamental constitutional principles, it would essentially divert the
resources of the criminal justice system away from law enforcement. Thus, the
criminal justice system would ultimately be unable to perform its task: investi-
gating crimes and bringing perpetrators to justice (because perfect prevention
is inconceivable). The use of investigative authority resources for this purpose is
also insufficient from an efficiency perspective. The fragmentation of investiga-
tive resources—which focus on individual cases—would hinder the investigation
of those who organize and direct crimes, develop methods of committing them,
and provide the necessary technical means.
Instead of the deliberately extreme solutions presented, it would be more expedi-
ent to seek a solution that considers the natural organizational (self-)interests of
the two sectors. It is difficult to argue that the financial sector’s interest is to pre-
vent individual abusive transactions (crime prevention), while the aim of crimi-
nal justice is rather to effectively detect crimes that have been committed and to
hold the perpetrator(s) accountable (law enforcement). Accordingly, it is reason-
able to divide tasks and resources in such a way that
1. significantly improves the crime prevention capabilities of the financial sector,
2. the prevention results (data) of the financial sector can also be applied in the
field of law enforcement, and
3. the tasks performed or assumed by the financial sector reduce the pressure
on the criminal justice system, enabling the authorities to better focus their
available resources on their primary task of apprehending and prosecuting
perpetrators.
This division of tasks, which is tailored to the specific characteristics of the sec-
tors, is beneficial in several respects. On the one hand, it avoids mixing public and
private law tasks and responsibilities. Accordingly, the tools necessary for crime
prevention (or property insurance within the financial system) in the financial
sector do not raise constitutional concerns, so the tools of the financial sector
can be operated with significantly lower guarantee requirements. The division of
tasks does not result in a confusion of roles on the part of financial sector employ-
ees, nor does it force decision-making that requires an official logic or approach.
NEW LEGAL INSTITUTIONS IN THE FINANCIAL SECTOR 313
Secondly, individual sectors can effectively deal with matters in which they have
an interest, meaning that there is no need to develop separate motivational solu-
tions or methods for measuring effectiveness. Effective crime prevention can re-
sult in a quantifiable reduction in losses on the part of the financial sector, which
can serve as an objective measure of the effectiveness of the field. In the case of
investigative authorities, no special motivation is needed to detect and success-
fully prosecute a major organized crime group, which can be greatly facilitated if
their available resources do not have to be fragmented to track down individual
fraudulent transactions.
5 COOPERATION FORUMS
There is therefore a qualitatively new phenomenon in which the actors involved
(financial service providers, law enforcement authorities) have significant re-
sources at their disposal, the novel coordination of which may indeed be able to
provide a qualitative response to the challenges we face. In recent years, coopera-
tion and the development of forms of cooperation have begun in several forums.
5.1 KiberPajzs – 2022
It is now widely accepted that the social changes brought about by the coronavi-
rus pandemic and the increasing shift of our everyday lives to the online space
have led to an exponential increase in online fraud, whereby.10 The financial sec-
tor, which is directly affected, was the first to notice the change and scale of this
phenomenon. It is therefore no coincidence that the need for joint action against
this phenomenon also began as a professional initiative.
The KiberPajzs11 cooperation platform was established in 2022 by the Magyar
Nemzeti Bank (Hungarian National Bank), the Magyar Bankszövetség (Hungar-
ian Banking Association), the Nemzeti Média- és Hírközlési Hatóság (National
Media and Infocommunications Authority), the Nemzeti Kibervédelmi Intézet
(National Cyber Security Institute) and the Országos Rendőr-főkapitányság (Na-
tional Police Headquarters, hereinafter: ORFK).
Since then, several other participants have joined the initiative, including other
government actors and the Ministry of Justice. Most recently, at the end of 2024,
10 https://www.mnb.hu/letoltes/1-fizetesi-rendszer-jelentes-2024-tovabb-fejlodik-a-hazai-
penzforgalom-indul-a-qvik.pdf; Frész, 2025; Terták–Kovács, 2023.
11 kiberpajzs.hu.
314 GÁBOR JANCSÓ
the initiative expanded with the addition of Szerencsejáték Zrt., Mastercard, and
Visa as professional partners.
This bottom-up professional initiative can function as a “soft tool” within the
existing legal and organizational framework. Accordingly, cooperation between
the public and private sectors has not been able to effectively address the chal-
lenges arising from the legal constraints of information sharing and task sharing
described above. Nevertheless, the initiative was a milestone in the fight against
online crime, as it made it clear to the actors involved that they had to work to-
gether whereby the phenomenon could be combatted. Within the existing legal
framework, cooperation between investigative authorities and the financial sec-
tor could essentially aim at general knowledge sharing, exchange of experience,
and the smooth operation of existing tools. The overall objective of KiberPajzs
was to raise awareness, increase knowledge, protect victims, and share general
knowledge related to the phenomenon. In addition, KiberPajzs’s objectives also
included the need to channel legislative proposals arising from professional co-
operation to the government.
The work, results, and spirit of KiberPajzs greatly contributed to the signing of co-
operation agreements between individual financial institutions and the National
Police Headquarters.
5.2 Government working group coordinated by
the Ministry of Justice – 2023
In addition to professional initiatives and cooperation, the social scale and impact
of the phenomenon made it clear that the search for solutions could not be sepa-
rated from a review of the existing legal framework and, if necessary, its reform,
which would not be possible without government action. With this in mind, on
the initiative of Minister of Justice Dr. Bence Tuzson, on December 14, 2023, a
working group was set up with the support of the heads of the relevant govern-
ment agencies, criminal justice agencies, and financial sector organizations. The
majority of the bodies represented in the working group were also active par-
ticipants in KiberPajzs, but the division of tasks between the two formations did
not create unnecessary parallels.12 Most of the bodies represented in the working
12 The consultation was attended by representatives of the Ministry of Justice, the Ministry of the
Interior, the Ministry of Finance, the Ministry of Economic Development, the Hungarian Na-
tional Bank, the Hungarian Banking Association, the National Court Office, the Prosecutor Gen-
eral’s Office, the National Police Headquarters, and the Office for Combating Money Laundering
and Terrorist Financing of the National Tax and Customs Administration.
NEW LEGAL INSTITUTIONS IN THE FINANCIAL SECTOR 315
group were also active participants in KiberPajzs, but the division of tasks be-
tween the two formations did not result in unnecessary duplication, but rather in
an effective division of labor. The working group coordinated by the Ministry of
Justice (hereinafter: MJ) was able to draw on the professional experience already
gained by the financial sector within the framework of KiberPajzs, so that certain
technical issues were already presented as mature positions in the government
working group. On the other hand, the IM working group specifically aimed to
develop appropriate legal frameworks and legal institutions that may have been
lacking, so there was no overlap in the focus of the two working groups.
The novelty and effectiveness of cooperation between the public and private sec-
tors was also evident in the activities of the working group. Despite the fact that
preparatory work was underway on legislation specifically aimed at combating a
criminal phenomenon, it proved extremely effective that the sectors concerned
were able to participate in the search for solutions from the outset, whereby they
helped to avoid futile, inherently unworkable or ineffective solutions. In addition,
from the outset, the working group essentially carried out its work with a view
to finding solutions and legal institutions based on the information sharing, ef-
fective cooperation and division of tasks described above, i.e. the separation of
crime prevention and law enforcement between different sectors, which would
have been inconceivable without the involvement of all stakeholders. Thus, in ad-
dition to increasing the effectiveness of criminal proceedings, the working group
perhaps paid even greater attention to the issue of effectively managing the phe-
nomenon outside of criminal proceedings, thereby reducing the burden on the
criminal justice system.
Following the launch of the working group, several legislative amendments were
made in the field of criminal law, specifically aimed at increasing the effective-
ness of action against online crime (framework license, reform of jurisdiction
rules, etc.). These amendments are part of the organic development of criminal
law and have been developed in close cooperation with the professions involved
in criminal proceedings, based on practical experience. Regulatory solutions that
directly affect the effectiveness of law enforcement are important, and legislation
must continue to be responsive to the professional needs that arise in this area. At
the same time, in our opinion, the results achieved by the working group over the
past year and a half represent real, qualitative progress. A number of laws have
been enacted that affect both the financial and criminal sectors and can be seen
as steps toward the cooperation between the public and private sectors and the
sharing of information and tasks described above.
316 GÁBOR JANCSÓ
6 RECENT ACHIEVEMENTS RELATED TO THE PPP SYSTEM
6.1 Cooperation agreements
The beginning of strategic cooperation between the public and private sectors was
marked by cooperation agreements between individual financial institutions and
the National Police Headquarters. Cooperation agreements specifically aimed at
effective action against online fraud were concluded with OTB Bank in Novem-
ber 202313 and with CIB Bank in early January 202514 .
The fundamental principle of cooperation agreements is that their content and
the cooperation mechanisms they contain cannot exceed the existing legal frame-
work, whereby. The cooperation agreement cannot therefore create rights, but it
can ensure the effective functioning of existing legal instruments. The framework,
legal basis and formal requirements for information sharing cannot therefore be
modified, but it is possible to specify, for example, the channels and data request
syllabuses that can greatly accelerate the flow of information. It is beneficial for all
parties involved if the authority is familiar with the data sets managed by financial
institutions, the mechanisms that make certain data sets more or less accessible,
the parameters that enable data requests to be processed quickly, etc. Cooperation
can be significantly accelerated if the authority knows what it can request, which
data are immediately available, and how it can request the information in terms
of labelling and format. Cooperation agreements may also aim at the reasonable
planning of tasks, distinguishing between urgent and longer-term/tolerant cases,
whereby helping to ensure that cooperation does not overburden the capacities of
the financial sector.
Cooperation agreements cannot stretch the existing legal framework, so their
conclusion does not actually require any special legal authorization. Cooperation
agreements are “soft instruments,” but their significance is extremely high. In ad-
dition to being able to significantly improve the practical application of existing
legal institutions, whereby they provide tangible evidence that the parties to the
agreement are equally committed to the task and treat each other as partners;
this has led to a change in attitude on the part of the authorities in particular.
With this in mind, the government wanted to support the spread of this initiative
with clear legislative authority, based on the professional requirements that had
already been raised in the working group coordinated by the Ministry of Justice.
13 https://www.portfolio.hu/bank/20231117/az-online-csalasok-ellen-kotott-egyuttmukodesi-
megallapodast-az-orfk-es-az-otp-652277.
14 https://hvg.hu/gazdasag/20250108_banki-csalas-megallapodas-rendorseg-cib-bank.
NEW LEGAL INSTITUTIONS IN THE FINANCIAL SECTOR 317
Accordingly, Act LXIV of 2024 on the amendment of other laws necessary for
further effective action against online fraud gave financial (and other) service
providers (in connection with the investigating authority) the authority to con-
clude cooperation agreements in all legislation affecting the financial sector.
6.2 Central Fraud Detection System
The launch of the Central Fraud Filtering System15 (hereinafter: KVR) is an ex-
tremely modern IT solution supporting the monitoring activities of the financial
sector, but it is only marginally related to the issue of cooperation between the
public and private sectors. Nevertheless, several features of the16 system, which
was launched on July 1, 2025, are worth mentioning in this context.
On the one hand, the KVR also seeks to share information relating to the finan-
cial sector. To this end, transactions passing through the GIRO Zrt. system are
analysed and risk-rated. The KVR does not, therefore, involve the direct sharing
or linking of the results of the monitoring activities of individual financial insti-
tutions. The monitoring activities of individual financial institutions, which also
use artificial intelligence (Péter Bagó, 2023), essentially precede the KVR’s assess-
ment, as transactions considered risky by the financial institution in question are
suspended and do not even reach the KVR for assessment. Of course, the data of
transactions approved by the financial institution and then assigned a risk rating
by the KVR are subsequently incorporated into the financial institution’s moni-
toring system, so that ultimately the financial sector as a whole is able to utilize
certain data and information. However, a financial institution’s knowledge of a
transaction that has been suspended cannot really be used directly in this sys-
tem: on the one hand, because the KVR works with its own learning algorithm
and not with the results of financial institutions, and on the other hand, because
the suspension of the transaction by the financial institution does not even reach
the KVR.
All this can be considered as maximizing the effectiveness of the applicable data
protection and financial secrecy rules, as well as the scope of liability under pri-
vate law. In addition, the KVR fits organically into the task-sharing logic of the
15 KVR is an artificial intelligence-based real-time transaction monitoring and evaluation system
developed and operated by the Hungarian National Bank and Giro Zrt. The 2023 amendment to
Act CCXXXV of 2013 on certain payment service providers ensures whereby the transfer of data
by payment service providers to the KVR does not constitute a breach of payment secrecy.
16 https://www.mnb.hu/sajtoszoba/sajtokozlemenyek/2025-evi-sajtokozlemenyek/mesterseges-
intelligenciat-vet-be-a-jegybank-a-penzugyi-kibercsalasok-visszaszoritasaert.
318 GÁBOR JANCSÓ
PPP system, as it can significantly improve the preventive capabilities of the fi-
nancial sector, i.e., it can greatly reduce the burden on the criminal justice system
with regard to individual transactions, allowing it to focus on perpetrators and
organizers.
The KVR also raises exciting questions regarding the possibilities for further de-
velopment within the PPP system. It will be interesting to examine the usefulness
of the risk classifications identified by the KVR in criminal law, both in specific
criminal proceedings and in criminal assessment and analysis activities. The
operational logic of the KVR may be able to identify correlations between data
arising in a specific criminal proceeding and additional transactions executed
or planned to be executed in the financial system. In addition, the patterns and
correlations identified by the KVR can also be used in law enforcement/criminal
intelligence activities necessary for the initiation of criminal proceedings and in
assessment and analysis activities carried out during preparatory proceedings
(Nyeste–Szendrei, 2020; Nyeste, 2016).
Finally, it may be worth considering further developing the KVR in the PPP sys-
tem from the perspective of how data arising from the authorities (whether in
the fight against money laundering and terrorist financing or in the conduct of
criminal proceedings) can be used in the KVR system.
6.3 Objective reporting obligation
Act XVIII of 2024 on the amendment of laws necessary to combat online fraud
and other criminal laws amended Act LIII of 2017 on the prevention and combat-
ing of money laundering and terrorist financing (hereinafter: PTMT Act) with
effect from 1 August 2024. amended Act LIII of 2017 on the prevention and com-
bating of money laundering and terrorist financing (hereinafter: Pmt.) and intro-
duced the legal institution of the so-called objective reporting obligation. Section
30 of the Pmt. stipulates that in the event of suspicion of money laundering, ter-
rorist financing or other criminal offenses, those obliged to provide data (in this
case, the financial sector) must report any data, facts or circumstances indicating
such acts to the National Tax and Customs Administration’s Office for Combat-
ing Money Laundering and Terrorist Financing (hereinafter: NAV PEI). Given
that the report is based on the personal observations of the financial institution’s
employees, this form of reporting can reasonably be called subjective reporting.
As of August 1, 2024, this form of reporting was supplemented by the new report-
ing form under Section 37/A of the Act. The law defines a payment transaction as
a transaction affected by abuse – not including card-based payment transactions
– in which there is reasonable cause to suspect fraud where the customer did not
NEW LEGAL INSTITUTIONS IN THE FINANCIAL SECTOR 319
intend to approve the payment transaction or where the customer approved it in
error. In such circumstances, the law imposes a non-discretionary reporting and
action obligation on the service provider, which is why this reporting form has
become widespread in practice as an objective reporting obligation.
The legal institution was developed by a working group coordinated by the IM,
based on the professional requirements that arose there. The monitoring activities
carried out by financial institutions (or the recently launched KVR) are capable
of preventing fraudulent transactions from being initiated. This is obviously the
ideal situation, as in this case no harm is done, the transaction is not executed,
the funds to be obtained remain in the detecting financial institution, and the
crime remains unfinished. In such cases, the preventive action of the financial
sector has been successful, and the criminal investigation department can be-
gin investigating the crime and searching for the perpetrators, with no further
harm expected in relation to the specific transaction. At the same time, it is clear
that the prevention/monitoring system cannot identify and prevent all fraudulent
transactions. In such cases, the financial institution is notified of the fraudulent
transactions within a short or relatively short period of time. Practical experience
has shown that money transfers between individual accounts, followed by the
withdrawal of cash or transfer of funds abroad, can render the funds inaccessible
within a very short period of time, a few hours or at most one or two days. It has
been identified as a professional requirement that, if a fraudulent transaction is
detected within a short period of time, either on the basis of a report by the victim
or other information, a tool should be available to secure the funds still available
in the financial system.
Given that we are talking about criminal offenses in these cases, it seemed obvi-
ous to expand the capabilities and capacities of the investigating authorities to
a degree that would enable them to deal with the problem. Based on the clas-
sic logic of criminal proceedings involving cooperation with the authorities, the
investigating authority communicates with those required to provide data in a
“star-point” system. In other words, it identifies the next data subject (financial
institution) on the basis of the incoming, acquired data, and then, after searching
for it and processing the data received, it clarifies the next data subject (financial
institution).
320 GÁBOR JANCSÓ
Figure 2
Schematic representation of the process
Investigating
authority
notification report
data request data provision
Financial Financial Financial
?
institution “A” institution “B” institution “C”
money trail
Source: own compilation
It is clear that in the world of online banking services, it is inconceivable to pro-
vide the level of resources or develop the level of cooperation that would be capa-
ble of competing with the speed of financial transactions in this data flow logic.
The ability and willingness of financial institutions involved in the transaction
chain to cooperate (report) is limited by the fact that they are typically unaware
that the funds they have received or forwarded originate from fraudulent legal
transactions. This information is only known to financial institution “A”; finan-
cial institution “B” only becomes aware of it when the investigating authority in-
forms it of this in its request. Thus, apart from any independent alerts from the
financial institutions’ internal monitoring systems, other financial institutions
involved in the transaction process are unable to take effective action, as they
cannot identify the transaction as fraudulent without the relevant information.
Another possible theoretical solution to this problem would be to grant financial
institutions full authority to freely share data on financial transactions they deem
fraudulent with other financial institutions, whereby ensuring that the funds re-
main within the financial system. However, in this form, it would not be compat-
ible with data protection and financial secrecy rules, and it would also mean out-
sourcing the aforementioned state monopoly – and the responsibility that comes
with it – which is to be avoided at all costs.
With all this in mind, a regulatory framework for objective reporting has been
developed that is capable of providing an appropriate regulatory and accountabil-
ity system, can be made operational with a reasonable expenditure of official re-
sources, addresses concerns related to data protection and financial secrecy, and
at the same time does not result in an unnecessary breach of the state monopoly
on coercion or the outsourcing of state criminal law claims.
NEW LEGAL INSTITUTIONS IN THE FINANCIAL SECTOR 321
The cornerstones of an objective reporting system are:
− ensuring the possibility of sharing information between financial institutions
involved in fraudulent transactions for specific purposes,
− automated IT solutions,
− NAV PEI, as the central authority in the system, ensures both the official
decision and the integration and analysis of related data, while not burdening
the investigating authority with the formality and other formal obligations of
the procedure17 ,
− the financial sector has the ability to temporarily withhold funds (suspend
transactions),
− the securing of assets and their return to the victim already takes place within
the framework of criminal proceedings.
Figure 3
Schematic representation of the objective reporting system
forwarding of aggregated, analysed information
NAV PEI Investigating Authority
notification seizure
report
money trail
Financial
Financial
institution “C”
Institution "D"
Financial Financial – suspension
institution “A” institution “B” Financial
Institution "D"
information transfer – suspension
Source: own compilation
Essentially, the legal institution uses the legal framework, legal basis, and tools of
the reporting obligation under the Pmt. and integrates them with the tools and
institutional system of criminal proceedings. However, compared to subjective
17 Under the provisions of the Criminal Procedure Code, the authorities conducting criminal pro-
ceedings are obliged to initiate and conduct criminal proceedings if the legal conditions for doing
so are met (officiality), but the initiation of criminal proceedings and the execution of individual
procedural acts are only possible if the legal conditions are met. For example, based on the report,
a decision must be made on whether to order an investigation, whether the conditions for coer-
cive measures are met, or whether further data needs to be obtained, etc.
322 GÁBOR JANCSÓ
reporting, the Pmt. specifies the circumstances in which the financial institu-
tion is obliged to take action without further consideration (transactions affected
by abuse). Another difference is that in this case, the financial institution not
only reports to the NAV PEI, but is also entitled to inform the other financial
institution(s) involved in the transaction. Moreover, in line with the speed of on-
line banking services, the financial institution may first forward the information
on the fraudulent transaction, and the reporting obligation only arises – retro-
spectively – on the part of the recipient financial institution.
The basic principle of the regulation is that the law prescribes an obligation to
take action in the circumstances giving rise to the report. This obligation to take
action also exists on the part of the NAV PEI, so that contacting/informing the
financial institution involved in the fraudulent transaction would also be an ob-
ligation for it. The regulation “shortens” this legally required but unnecessary
back-and-forth flow of information whereby direct information transfer is pos-
sible between the two financial institutions, while at the same time involving the
authorities through the reporting process.
The compelling reason for directness and the reverse order of administration is
clearly that otherwise it would not be possible to monitor online banking transac-
tions and intervene in a meaningful way. The new tool is therefore necessary and
proportionate to the objective pursued.
If other financial institutions are involved in the transaction chain, the obliga-
tion to transmit and report financial information shall be as described above.
Therefore, if, as a result of the transaction, the funds received by financial institu-
tion “B” are transferred, financial institution “B” shall immediately forward the
necessary information to financial institution “C” ( ), where the receipt of the
information gives rise to a further reporting obligation. As a result of the infor-
mation transfer process, which can be transferred and automated via IT channels,
information on fraudulent transactions may be able to “catch up” with fraudulent
financial transactions that are also carried out via IT channels and are also highly
automatable.
As a result of the operation of this legal institution, if the funds are available
at the financial institution at the end of the transaction chain, further disposal
(further transactions) may be suspended and the assets secured, which is also a
pre-existing legal institution regulated by Sections 34-35 of the Pmt. The suspen-
sion may be carried out by the financial institution, with a related notification, or
on the basis of a provision by the NAV PEI. The suspension period is four working
days, which may be extended by a maximum of three additional working days.
The NAV PEI summarizes and evaluates the transaction chain based on the re-
ports of financial institutions. If no fraudulent transaction can be identified based
NEW LEGAL INSTITUTIONS IN THE FINANCIAL SECTOR 323
on the reports, the suspension will not take place or will be lifted immediately.
NAV PEI forwards the information, supplemented where necessary as a result of
its own evaluation and analysis (operational analysis pursuant to Section 39 of the
Pmt.), to the authorities in aggregated form, having already processed it in sub-
stance pursuant to Sections 48-49 of the Pmt. NAV PEI performs risk-based ac-
tivities and its operations are not bound by the constraints of measures affecting
the authorities conducting criminal proceedings. Accordingly, NAV PEI has suf-
ficient time to summarize and analyze the information received. If, on the basis
of the information received, it can be established that the information on which
the report is based is incorrect and the transaction is not fraudulent, it can take
immediate action without unnecessary administrative burdens to ensure that the
suspension is not imposed or that the suspended transactions are executed. In
this case, there is no official obligation to forward the information to the authori-
ties, thus avoiding unnecessary burden on the criminal justice system.
Finally, the NAV PEI’s highly automated evaluation and analysis activities are not
only capable of summarizing information on a given chain of fraudulent trans-
actions, but also, where appropriate, of identifying links between several related
chains of transactions. This is ensured by whereby the investigating authorities
can treat cases that are related in terms of the perpetrators/methods of commis-
sion in a uniform manner from the outset and avoid having individual fraudulent
transactions appear as separate cases in the system.
The actual securing – seizure – of assets is already carried out within the frame-
work of criminal proceedings, by ordering coercive measures. The state coercive
monopoly, which results in a substantive restriction of the right to private prop-
erty, may also remain within the existing legal framework, with all known and
functioning decision-making and responsibility competences, as well as guaran-
tee and legal remedy elements. Based on the processing of the information for-
warded by the NAV PEI, the investigating authority may examine the legal con-
ditions for ordering an investigation and, in the event of a financial transaction
being suspended, for securing assets (seizure, seizure). The information transmis-
sion process and the deadline for suspension specified in the Pmt. provide suffi-
cient time for the investigating authority to assess whether it is justified to order
an investigation and apply coercive measures.
In order to avoid the outsourcing of coercive measures, it is particularly impor-
tant that, after the securing of assets, their return to the victims and the restora-
tion of the original state remain the task and responsibility of the authorities. In
practice, it is extremely rare for a linear transaction process to be halted by the
transfer of information. It is more typical for funds to be divided, combined, or
mixed with legal transactions between several financial institutions. In the case
of a complex transaction chain involving a number of financial institutions, it is
324 GÁBOR JANCSÓ
obviously not reasonable to expect the financial institution suspending the trans-
action to investigate the origin of the assets and decide who can be considered the
injured party and to what extent the existing funds should be distributed among
them. However, the legal tools necessary for this are available within the frame-
work of criminal proceedings, and the clarification of these issues fits into the
“normal” schedule of criminal proceedings, so the authorities conducting crimi-
nal proceedings can be expected to perform such tasks.
An additional advantage of the objective reporting obligation is that the trans-
mission of information can be automated on the part of the financial institution,
the NAV PEI, and the investigating authority. The reported information is thus
automatically processed and transmitted by the IT system so that issues requiring
human intervention can be resolved as quickly and as well prepared as possible.18
The new legal institution fits in well with the operating logic and challenges of the
PPP structure presented earlier. We have managed to ensure that reasonable and
important legal restrictions on data management/information transfer within the
financial sector do not hinder effective operation. The transfer of information
remains purpose-bound and proportionate to the objectives set out in the law.
There has been no outsourcing of the state’s criminal law powers; the financial
system’s role is to temporarily secure assets related to fraudulent transactions, for
no longer than the time necessary to make the necessary decisions in criminal
proceedings. The transmission of information and the suspension of transactions
are subject to official “control,” with the NAV PEI providing the possibility of
intervention if necessary. This is suitable for exercising appropriate control and
supervision over possible abuses or erroneous measures, whereby, taking into ac-
count the subject matter and time limits of the interventions, it provides a suf-
ficient and effective guarantee and corrective mechanism. In the case of coercive
measures under criminal law that significantly restrict assets, a comprehensive
system of legal remedies is already in place. Throughout the process, the rules of
responsibility for individual civil and official actors are clear and in line with their
organizational nature.
Finally, the new regulation also represents a significant step forward in the area
of task sharing. Cooperation between financial institutions ensures the preserva-
tion of assets and the visibility of fraudulent transaction processes. In addition,
the information shared between financial institutions in connection with a given
fraudulent transaction can contribute to the further development and learning of
18 Reports are received and processed by the NAV PEI’s automated IT system. The information
forwarded by NAV PEI in an automated manner is received and processed by the ORFK Dante
system (Digital Data Analysis and Investigation Support System). (https://www.police.hu/hu/
hirek-es-informaciok/legfrissebb-hireink/helyi-hirek/dante).
NEW LEGAL INSTITUTIONS IN THE FINANCIAL SECTOR 325
the monitoring systems of individual financial institutions, thereby helping to fil-
ter out new fraudulent transactions and increase the effectiveness of the monitor-
ing system. The legal institution is also capable of linking transaction chains that
are related from a law enforcement perspective. However, this is no longer the task
of financial institutions, but of the authorities, primarily the NAV PEI. At the end
of the process, the criminal investigation authorities can begin to search for and
prosecute the perpetrators by securing the assets and processing the structured
information made available to them. The investigating authority is thus relieved
of the burden of trying to track down individual fraudulent transactions using
traditional criminal law tools on the basis of reports from victims; this task is
performed by the financial authorities through the objective reporting system
(and with significantly greater efficiency). The financial sector has thus become
an active participant in law enforcement processes, while the reduced burden on
the investigating authority allows for the prosecution of perpetrators and the ef-
fective investigation of the activities of the organizers.
The functioning of the new legal institution is obviously not perfect, and based on
experience, there will always be room for improvement. Nevertheless, we believe
that the effectiveness of the legal institution is demonstrated by the fact that, ac-
cording to information from the National Police Headquarters, in the 11 months
since its introduction, up to June 10, 2025, more than HUF 2 billion in bank ac-
count funds have been secured, which can thus be quickly returned to the vic-
tims, whereby.
6.4 Information sharing
The objective reporting system ensures the effective sharing of information and
the possibility of intervention by the financial sector, the NAV PEI, and law en-
forcement agencies in relation to a given transaction process that has already been
executed. Similar to the KVR, however, information and knowledge related to
transactions that have been pre-screened by the financial institution and blocked
in the internal monitoring system cannot be widely disseminated in this system.
Data protection and financial secrecy rules do not allow individual financial in-
stitutions to share data they consider risky directly with each other, whereby they
must use an intermediary. Although this solution may seem feasible, it would
in fact result in the complete exclusion of certain customers from the financial
system (“blacklisting”), which would raise regulatory, guarantee, liability, and
fundamental rights issues that fall within the scope of public tasks.
Despite the legitimate objections raised by the rule of law, the need for information
sharing has arisen for genuine professional reasons, as the most effective method
326 GÁBOR JANCSÓ
of prevention would be for a risk clearly identified by one financial institution to
trigger an immune response from the entire financial sector almost immediately.
One of the characteristics of online fraud is that it generates mass phenomena
through IT solutions, i.e., it attempts to exploit the same method of commission
on a massive scale whereby. If, after the first successfully identified fraudulent
initiative or completed transaction, all further attempts using the same solution
(technical device, “money mule account,” target account, etc.) could be blocked,
perpetrators could be deprived of the mass nature of online fraud. Such a high
level of success in crime prevention could even reduce the “return” on the crime
to such an extent that the resources required for further fraudulent transactions
would no longer be proportionate to the expected profit. This could even lead to
a natural decline and eventual disappearance of online fraud. The development
of an effective and reliable immune response affecting the entire financial sector
therefore promises significant results.
Act XLIX of 2025 on the amendment of laws relating to justice, adopted in the
spring of 2025, aimed to meet this professional need. In this case, too, the reg-
ulation seeks to provide a solution to the problem by amending the Pmt. The
regulatory system of the Pmt. already authorizes financial institutions to report
suspicious transactions to the NAV PEI, whereby they are empowered to do so.
However, if the financial institution is able to prevent the fraudulent transaction
within its own system, based on its business regulations, it is not necessarily in
the financial institution’s interest to bear the administrative obligations associ-
ated with reporting. Reporting such information to the NAV PEI is no longer in
the interest of the organization, but is motivated at most by the desire to avoid
supervisory sanctions for failure to report. The lack of organizational interest
stems from the fact that if the financial institution has already managed to block
the specific transaction within its own jurisdiction, the reporting merely entails
an additional administrative burden, while the further use of the report by the
authorities is of no interest and uncertain. In contrast, whereby if financial in-
stitutions had specific knowledge that the information they transmitted would
be directly useful to the entire financial sector, all financial institutions would
have an interest in transmitting the information, since, on the one hand, they
could rightly expect that the data shared by other financial institutions would
next support their prevention and monitoring activities, and, on the other hand,
they could rightly fear professional censure if it turned out that they had failed to
transmit information that could be shared and thus help other institutions.
The new regulation makes it clear that the information on which the report is
based can be returned by the NAV PEI to the financial sector almost immediately,
after appropriate evaluation, whereby the financial institution’s report will have a
direct impact at the sector level. This element of the regulation is new. While the
NEW LEGAL INSTITUTIONS IN THE FINANCIAL SECTOR 327
structured flow of information provided by financial service providers to NAV
PEI has always been part of the institutional system, NAV PEI has not had the
general option of “returning” information. Although it was possible to contact
and intervene with specific financial institutions on the basis of the reports, it was
not possible to share information in a general manner that would mobilize the
entire sector.
In theory, general information sharing can be understood as a quantitative
change in the current system. Based on its analysis of the information available
to it, NAV PEI has the option of contacting certain service providers or suspend-
ing certain transactions based on information received from the service provider.
Let us assume, whereby, based on this authorization, NAV PEI repeatedly sends
requests within a very short time interval (every few seconds) to check data it
considers suspicious, and then, if the service providers find a match, it automati-
cally takes the necessary measures to suspend the identified transaction. Such an
extremely resource-intensive theoretical solution can be considered equivalent to
general information sharing in terms of its results. This solution would constitute
an overload attack on financial service providers and the NAV PEI system, and
at the same time would constitute an obvious circumvention of the original legal
institution under the regulation. The quantitative modification would already be
considered a qualitative difference, as there is a fundamental difference in terms
of purpose, effect, and operation between a targeted search for specific informa-
tion and a general, essentially continuous alert system, which would also require
the constant availability of service providers. Accordingly, it is important to en-
sure that the new legal institution was not created by circumventing the existing
regulations, but was given its own legal definition and regulatory framework.
The central element of the regulation is that NAV PEI has been granted legal au-
thority to share information, whereby the usability of the shared information is
limited in time. NAV PEI is a body performing a public function, with analytical
capacity and the official powers necessary to achieve its objectives. The informa-
tion shared in the financial service provider’s report is subjected to appropriate
checks (operational and strategic analysis) in the NAV PEI’s own database, and
thus the information can be shared with the financial sector as an official act, in
accordance with the legal conditions. The responsibilities of the individual actors
can be separated: the financial service provider reports its findings and the results
of its monitoring activities to the NAV PEI. At this stage, it is responsible for the
accuracy of the facts on which the report is based. The NAV PEI analyzes the con-
tent of the report, evaluates it against its own database, and shares it if the legal
conditions (the purpose of the sharing) are met and the sharing of information
is necessary to achieve these purposes. It is the official responsibility of the NAV
PEI to assess the (substantive blocking) effect that the sharing of the information
328 GÁBOR JANCSÓ
on which the report is based will have on the transactions to which the informa-
tion relates. After sharing the information, the NAV PEI has the additional task
of deciding when and with what other information and analysis to forward the
information to the investigating authorities.
Figure 4
Schematic model of information sharing (first round):
data sharing
NAV PEI Investigating authority
information sharing
information transfer
Financial institution “B”
report
Financial institution “D”
Financial institution “C”
Financial institution “A”
Source: own compilation
Financial service providers have access to the information shared by NAV PEI in
a format that allows for automatic processing, enabling them to integrate it into
their own monitoring systems in real time. Alerts related to information shar-
ing may result in reporting obligations related to previous transactions or new
transactions initiated after the information is received, or in the suspension of
transactions. This means that the results of the monitoring activities of individual
financial service providers can be used across the entire financial sector within a
short period of time and can lead to the identification and sharing of new infor-
mation related to fraudulent activities. The shared information can also be used
in criminal proceedings and can help to identify the actions of perpetrators and
track them down, while the financial sector is able to continuously prevent harm-
ful consequences.
The logic of the information sharing system fits perfectly with the essence of the
PPP concept. The resources of the financial sector are pooled and can be used
effectively to prevent crime, while significantly reducing the burden on the crimi-
nal justice system. In addition, information on related attempts is available to law
enforcement in an aggregated and processable structure, enabling the infrastruc-
ture behind the attempts to be dismantled and the perpetrators to be identified
and held accountable.
NEW LEGAL INSTITUTIONS IN THE FINANCIAL SECTOR 329
Effective operation requires the system to be run by a suitably automated IT sys-
tem, as the information flow model presented cannot be operated in a timely
manner by human processing. The IT solutions developed during the operation
of the objective system give reason to believe that the IT solutions necessary for
the operation of this system will also be developed by the time the legal institu-
tion enters into force on June 1, 2026.
The logic of the system is that it works effectively if financial service providers
carry out their monitoring activities efficiently, with adequate resources. We have
already mentioned that service providers will be interested in information shar-
ing not only because of their legal obligations, but also because they can expect
to benefit from the data shared by other service providers, i.e., a voluntary agree-
ment may develop regarding their interest in the joint operation of the system. At
the same time, some service providers may gain an unjustified and abusive ad-
vantage if they neglect their own monitoring activities and seek to benefit solely
from the information sharing of other service providers. This would minimize
the costs of their monitoring activities, while allowing them to freely exploit the
results of other service providers’ resource investments with maximum efficiency.
In addition to being a clear abuse of the mutual trust, responsibility, and rea-
sonableness that form the basis of the system, it is also deeply reprehensible from
a moral standpoint. It is clearly the responsibility of the government to create a
regulatory and supervisory environment that ensures that all financial service
providers are required to provide adequate resources and cooperation, and that
they can only benefit from the results of the system’s operation if they perform
their assigned tasks properly.
7 SUMMARY
Based on the changes in online fraud over the past few years (social, IT, etc.),
it can be said that we are facing a new phenomenon of crime and criminality.
It is futile to assume that there is a solution that can completely eliminate this
phenomenon. This could probably only happen if we eliminated the precondi-
tions that enable the phenomenon to develop, which would mean giving up all
the advantages, conveniences, and economically useful functions of current fi-
nancial solutions. However, the extent of online fraud is still only measurable in
thousandths of the total volume and value of financial transactions19 , so such a
19 https://www.mnb.hu/letoltes/bartha-lajos-prezi-kiberpajzs-sajtotajekoztato-03-20.pdf;
https://fintechzone.hu/a-kozponti-visszaelesszuro-rendszer-megvedheti-a-penzforgalmat-a-
kibertamadasoktol/.
330 GÁBOR JANCSÓ
step backwards would clearly not be acceptable given the competitiveness of the
economy and the popularity of the current solutions. The fight against online
fraud as a whole is unlikely to be won, but that does not mean that battles cannot
be won or results cannot be achieved. However, the new phenomenon of online
fraud requires new methods and new forms of cooperation, and PPP cooperation,
which is capable of making effective use of the financial sector’s resources, should
be given a prominent role in this.
The professional and governmental initiatives presented here have recognized
in a timely manner that there is a need to coordinate resources and share tasks
efficiently. We believe that the new forms of cooperation and legal institutions
described above are steps in the right direction and promising initiatives that
can serve as a basis for effective cooperation between the financial sector and law
enforcement authorities, the further development of individual legal institutions,
and solutions capable of responding to new challenges. However, it is essential
to continuously monitor and evaluate the experiences of the processes that have
been initiated. The forms of cooperation that have been established (Cyber Shield,
government working group) can provide an appropriate forum for this work.
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