A few months ago, I approached The Knoble with an idea. We had just collaborated on an initiative to help financial institutions quantify the hidden costs of financial scams. That work raised a natural question: Could we apply the same approach to money mule activity?
In many ways, the challenge was the same. There is often an implicit mindset of “no loss, no cost.” If the bank is not taking a direct financial hit, the impact can feel limited.
We see this in the case of scams, where reimbursement is not always mandated as it is for other forms of fraud. Mule accounts are often viewed similarly. There’s the perception that they facilitate the movement of illicit funds but do not create a direct financial loss for the institution itself.
What I learned over several weeks in the working group is that mule accounts inflict a very real cost on the financial institutions that hold them. Those costs just aren’t always visible.
Today, we’re introducing a new mule account cost calculator designed to help institutions better quantify this hidden impact. Here’s a closer look at what I learned in the process.
Mule accounts do carry tangible costs
Mule accounts are often treated as low-impact because they don’t create an immediate financial loss. In reality, they are a net drain on the institution.
When you break down the cost to service an account, each interaction draws on resources, from customer service and branch staffing to operating overhead such as buildings and utilities. There are also technology and security costs tied to maintaining systems, payments infrastructure, and fraud prevention, as well as ongoing regulatory compliance requirements such as AML and Bank Secrecy Act (BSA) obligations.
On the flip side, most mule accounts resemble standard checking or savings accounts. They generate limited revenue and rarely lead to deeper relationships such as loans, mortgages, or credit products.
So instead of contributing to long-term value, these accounts actually do the opposite. They consume resources, require ongoing attention, and ultimately cost the institution more to maintain than they generate in revenue.
Not every mule account can simply be shut down
Another important nuance is that not all financial institutions have the same ability to act. At those institutions where customers are also members, the process of closing an account is not always a straightforward one. In some cases, institutions are required to maintain the member relationship, even when there are concerns about how the consumer is using the account.
This creates a different kind of burden: ongoing risk management. Accounts may need to be restricted, monitored, or reviewed continuously, adding more costs and operational complexity over time.
So, instead of eliminating the risk, institutions are forced to actively manage it.
Mule risk touches far more teams than expected
My third takeaway, and perhaps the most surprising, is just how rampant mule risk actually is across the organization.
We often look at money mule activity through a fraud or AML lens. But when you map it across the account lifecycle, it becomes clear that it touches so much more. When one large bank mapped mule risk across its organization, it identified 16 to 17 internal teams involved at different stages .
That level of fragmentation makes it difficult to see the full picture, let alone manage it effectively.
Making the invisible visible
What ties all of this together is a common theme: Much of the true cost of mule activity is hidden and fragmented across the organization.
That’s exactly why we partnered with The Knoble to develop a mule account cost calculator, creating the framework to give institutions a starting point to make these costs more tangible. When you apply numbers and begin to see how many people, processes, and resources are involved, the impact becomes much easier to quantify. And when those costs are visible, it becomes a problem that is much harder to ignore.
