Financial Crime World

Banks Seek New Approach to Combat Financial Crime

In recent months, banks have been turning to a new approach to improve their effectiveness in combating financial crime. This innovative method combines improved information storage and retrieval with close collaboration with law enforcement agencies.

Investigator-Led Approach

The investigator-led approach involves the use of advanced machine-learning algorithms to process and filter data from various sources, including:

  • Financial transactions
  • Social media
  • Shipping routes

This allows investigators to identify potential sanctions violations and other suspicious activities more quickly and accurately than traditional methods. The benefits of this approach include:

  • Dramatically improved effectiveness in detecting financial crime
  • Reduced strain on organizational resources
  • Elevated profiles as socially responsible actors in society

Building External Partnerships

Banks are also building networks of external partnerships with:

  • Law enforcement agencies
  • Tax-collection authorities
  • Shipping companies
  • Airlines
  • Non-profit organizations

These partnerships enable the sharing of intelligence and staying ahead of criminals. For example, the Joint Money-Laundering Intelligence Taskforce (JMLIT) in the UK brings together more than 40 financial institutions, the Financial Conduct Authority, Cifas, and five law-enforcement agencies to share information and disrupt illegal activities.

Streamlining AML Infrastructures

In addition, banks are streamlining their current anti-money laundering (AML) infrastructures to make them more efficient and effective. This involves:

  • Reviewing all AML activities to eliminate those that are not required by regulations or beneficial to law enforcement
  • Automating manual tasks to reduce the strain on resources

Regulatory Incentives

Regulatory incentives are also seen as crucial to the success of this approach. Regulators need to provide a safe harbor for testing innovative solutions and encouraging banks to share more information and create public-private partnerships.

“The clock has run out on refining the existing model,” said [name], a financial industry expert. “It’s time for an intelligence-driven, investigator-centered approach that focuses on intercepting the proscribed activities of highest risk to the organization.”

By improving detection and reducing financial crime, banks will also help to reduce instances of:

  • Money laundering
  • Drug smuggling
  • Human trafficking
  • Corruption
  • Embezzlement