Preventing Financial Crimes with Technology in Malta
As emerging financial crime risks continue to evolve, the landscape of risk management is changing rapidly, posing a significant challenge for anti-money laundering (AML) subject persons in Malta.
Blockchain Technology: A Double-Edged Sword
The rapid growth of blockchain and distributed ledger technologies has made it possible for virtual assets to be easily accessible and used as payment products. However, this anonymity can also be exploited by wrongdoers to bypass regulators and law enforcement agencies. The lack of effective legislation, regulation, and enforcement in this regard poses a significant threat to the cross-border financial crime prevention framework.
NFTs: A New Tool for Money Laundering
NFTs (non-fungible tokens), which have gained popularity in recent years, may be used to launder money, finance terrorism, and commit financial crimes. Their subjective value and ease of manipulation make them conducive to these illicit activities. Moreover, the rise of NFTs has also brought about new means of perpetrating known crimes, such as insider trading.
Fake News: A Growing Concern
The proliferation of fake news and online disinformation is becoming more prevalent, making it increasingly challenging for individuals and organizations to identify reliable online news sources. This is particularly concerning in the context of due diligence on clients by AML subject persons.
Deepfake Technology: A Serious Crime Threat
Deepfake technology enables the production of convincing content that can be used to spread disinformation, commit fraud, and deceive “know-your-customer” mechanisms. The lack of awareness about this technology’s risks and the difficulty in detecting deepfake content emphasize the importance of understanding, detecting, and mitigating its misuse.
Mitigating Emerging Financial Crime Risks
To address these emerging financial crime risks, AML subject persons in Malta should:
- Identify and understand the corresponding risks
- Design mitigating controls
- Ensure their anti-money laundering/combating the financing of terrorism (AML/CTF) framework keeps up with emerging technologies and risks
By adequately training employees to identify and mitigate risk on a risk-based approach, subject persons can effectively address these emerging financial crime risks. Deloitte, with its significant experience in financial crime risk management and compliance, is well-equipped to assist AML subject persons in setting up frameworks to mitigate the risk of their services being misused for money laundering, terrorist financing, or financial crime.
Get in Touch
If you wish to learn more about emerging risks and how they can be managed, please reach out to our team.