Financial Crime World

Financial Crime Investigation Process in Saint Pierre and Miquelon: A Growing Concern

Introduction

Saint Pierre and Miquelon, a French overseas collectivity located off the coast of Canada, has seen an increase in financial crimes in recent years. As the island’s economy grows, so do the risks associated with money laundering, terrorist financing, and other illicit activities.

The Fight Against Financial Crime: A Growing Challenge

To combat these threats, regulatory bodies and financial institutions are under pressure to innovate and promote a culture of compliance. The fight against financial crime is becoming increasingly sophisticated, with new technologies and emerging trends making it more challenging for authorities to detect and prevent illegal activities.

A Paradigm Shift: Article Series

In response to this growing concern, KPMG has launched an article series exploring the views of thought leaders on the future of financial crime. The series aims to understand why the fight against financial crime matters, gauge the current climate, and identify shifts or changes in the future of financial crime.

Key Findings:

  • Firms are expected to remain compliant with ever-changing regulations while battling rising labor costs and pressure to reduce overhead.
  • A more dynamic approach to risk management is needed to navigate internal and external pressures.
  • Financial products inherently carry the risk of fraud, but the landscape has changed with increased cyber-attacks, fraud surges, and new digital payment types.

Rising Financial Crimes Risks in Digital Payments

The growth in digital payments has led to an increase in financial crime activities. Criminals are engaging in sophisticated schemes to obtain and launder illicit funds. The article identifies three top financial crime trends and typologies, including a five-step money laundering and fraud scheme:

  • Money Laundering: Using digital payment systems to move illicit funds through various transactions.
  • Fraud: Impersonating individuals or businesses to obtain sensitive information or make unauthorized transactions.

Financial Crimes in Digital Assets and Cryptocurrencies

Virtual Asset Service Providers (VASPs) face increased risks involving digital assets due to inadequate controls and failures in areas such as Weak Customer Due Diligence (CDD), Weak Sanctions Monitoring, Unregistered VASP, and Compliance Obligations. Additional Anti-Money Laundering (AML) risks continue to evolve for Peer-to-Peer (P2P) & Decentralized Finance (DeFi) Service Providers, Non-Fungible Token (NFT) Marketplaces, and Traditional Financial Institutions.

Automating Anti-Money Laundering (AML)

Three fundamental reasons to invest in financial crime automation strategies:

  • Cost Takeout: Reducing manual processing costs associated with AML compliance.
  • Customer Experience: Improving customer satisfaction by reducing wait times and increasing accuracy.
  • Risk Aversion: Enhancing risk management capabilities through real-time monitoring and alerting.

Managing Financial Crime in Saint Pierre and Miquelon

To achieve the highest level of integrity and manage the cost and risk of litigation, investigations, and regulatory enforcement actions, organizations can:

  • Implement a more dynamic approach to risk management.
  • Invest in financial crime automation strategies.
  • Stay up-to-date with emerging trends and technologies.

By taking these steps, Saint Pierre and Miquelon’s financial institutions and regulatory bodies can better combat the growing threat of financial crimes and maintain a safe and secure financial environment for its citizens.