On May 18, 2023, a diverse community of domain experts and experienced professionals from some of the largest financial institutions globally gathered at the RAF Club in London. Leaders from various divisions – FinCrime, Special Investigations, Sanctions, Fraud, AML & KYC, Surveillance, and Payments – all united by one common goal: to fight the rising tide of financial crime. I was immediately struck by the sense of urgency and collective determination that filled the air.
During the event we had the pleasure to listen to inspiring FinCrime experts Graham Barrow (Director at The Dark Money Files Ltd and RiskAlert 247) and Jason Grasso (Senior Director, Financial Industry Solutions Leader at Pegasystems), as they unravelled complex money laundering webs and what technology can do to support professionals in preventing financial crime. The vibrant conversations went on as we shared perspectives on current challenges, insights, best practices, and technology advancements around the dinner tables. A truly close-knit community emerged.
In this blog post, we'll delve into the highlights of the discussions we had.
- It’s not just about banks. It’s about all of us. Compliance and risk management are not just a tick in the checkbox activity. Why do financial firms have controls in place? It’s not just because law XYZ says so. We do it because we want to stop criminals. We do it because we want a better and safer world. Illegal financial activities can often go unnoticed or overlooked by society. But financial crimes are not just something risk functions within financial institutions must care about and manage, they occur in various forms and affect everyone. Yet people may not be fully aware of them or may not recognize them as criminal activities. During the dinner, Barrow demonstrated an easy step for us to take to protect ourselves. For example, if you are searching for a razor on a popular online retailer, you search for the supposed seller on Companies House. This may help us spot some red flags leading to potential money laundering perpetrated by fake companies actively trading on these platforms (which, surprisingly, are not subject to due diligence obligations). It is essential for individuals to be vigilant collectively because everyone can contribute to help uncover illicit activities.
- The way forward. In a world of ever-increasing costs of AML- and AFC-related operations, lengthy, disparate, frequently manual, and duplicative activities, Grasso pointed out how leaders in financial crime are continuously asked to do more with less. Firms look to become more efficient in these uncertain economic times. On top of this, multiple disconnected alert streams and processes – as well as a widespread lack of consolidated views of client risk across the bank – hinder productivity and accuracy.
We heard how digital tools can be a powerful ally in FinCrime to:
- Further efficiencies and spare staff by automating and streamlining the end-to-end process with unified case management, as well as deploying innovative technologies like AI and ML to increase predictability, speed, and effectiveness.
- Manage the multitude of detection output (AML, fraud, sanctions, etc…) all in one platform, finally gaining a holistic client risk oversight across the entity.
- Maximize impact of individual skillsets within FinCrime teams thanks to skill-based routing. Whether investigative units are operating on an onshore, onshore/offshore, or some other hybrid model, the goal is to direct an alert or case to the analyst and investigator best suited for its complexity, risk, or other factors. This allows firms to properly manage risk while avoiding wasting precious time in endless back-and forth, or useless steps in the process.
- Collaboration is key. Experts pointed out how vital it is to truly enhance cooperation between regulators and financial institutions to foster smarter, effective, and efficient FinCrime and money-laundering prevention, detection, and management. Joint efforts in information sharing, intelligence gathering, and capacity building were emphasized as essential components of a successful strategy. Moreover, collaboration needs to be taken to a global degree: financial crime knows no borders, and international cooperation is crucial in addressing this issue.
Closing thoughts
The insights gained and connections made during the dinner were invaluable. It reinforced the passion of these professionals, importance of thinking out of the box, individual responsibility, and the role of technology in preventing financial crime. As professionals in FinCrime, we must actively seek opportunities like this event to share our knowledge, collaborate with others, get inspired, and contribute to the collective effort in financial crime prevention.