Financial Inclusion Key to Combatting Rising Tide of Crime in Ireland

The scourge of financial crime is costing the Irish economy hundreds of millions of euros every year, with unsuspecting individuals and businesses falling victim to a range of sophisticated scams.

The Consequences of Financial Crime

From deepfake messages purporting to come from beloved celebrities to money-laundering activities by criminal gangs, the consequences are devastating for those affected. According to experts, financial crime encompasses a broad spectrum of illegal activities designed to profit from illicit schemes, including:

Theft
Fraud
Drug trafficking
Bribery
Corruption
Human trafficking and child exploitation
Application of financial sanctions by governing bodies
Methods used by terrorists to fund their operations

Types of Financial Crime Affecting Individuals

For individuals, online fraud, payment-card fraud, phone scams, and investment-related scams are among the most common forms of financial crime. Katherine Gillespie, managing director and forensic team leader at KPMG, notes that it is becoming increasingly common for family members, friends, or colleagues to be duped into making bank transfers or investing significant sums of money through elaborate criminal schemes.

Business Impact of Financial Crime

Businesses too are not immune to financial crime, with activities such as:

Money laundering
Corruption
Bribery
Insider trading
Tax evasion
Financial statement fraud
Asset misappropriation
Embezzlement posing a significant threat. The Deloitte Financial Crime Advisory team estimates that the amount of money passed through mule accounts in Ireland increased to €17.5 million in the first half of 2023 alone.

Technology’s Role in Enabling Financial Crime

Technology has made it easier for criminals to operate, with software capable of replicating voices and images to dupe victims into parting with their cash. Money-laundering gangs are also targeting students and young people, often offering them small amounts of money to turn their accounts over in the laundering cycle.

Combating Financial Crime

Experts stress that combating financial crime requires a collective effort, starting with individual awareness. “People need to understand how technology can be used to commit crime,” says Colm O’Flaherty, director at Deloitte’s Financial Crime Advisory team. “They should do the sniff test and think before acting on unsolicited requests for money or bank account details.”

Moreover, a lack of information sharing between financial institutions hampers efforts to prevent and investigate financial crimes. Ireland is well-placed to address this issue, with major social media and technology companies having headquarters in the country.

Conclusion

Some level of financial crime may always exist, but experts believe that better education and awareness-raising can help reduce activity levels. By understanding the wider implications of financial crime and changing societal attitudes towards it, individuals can be more vigilant and work together to achieve a zero-tolerance approach to financial crime in all its forms.