Financial Crime World

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Financial Crime Detection Methods in Svalbard

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As financial institutions continue to operate in an increasingly complex and interconnected global economy, the threat of financial crime remains a significant concern. In this article, we will explore the latest developments in financial crime detection methods and how they can be applied to prevent and combat fraud.

Strengthening Controls Around Evolving Regulatory Focal Areas

In June 2021, FinCEN released government-wide AML/CFT priorities, which include:

  • Corruption
  • Cybercrime
  • Terrorist financing
  • Fraud
  • Transnational criminal organization activity
  • Drug trafficking
  • Human trafficking
  • Proliferation financing

Regulators will expect financial institutions to incorporate these priorities into their risk-based AML compliance programs once final regulations have been issued.

Ransomware Demands via Virtual Currency

The use of virtual currency in ransomware demands is a growing concern for regulators. Financial institutions must be prepared to detect and prevent such transactions, as well as report suspicious activity.

Incorporating Machine Learning and Enhanced Data Analytics into Compliance Programs

FinCEN’s expanded technology resources and focus on innovation, including machine learning and enhanced data analytics, brought about by the AMLA, will influence regulatory expectations regarding technical tools. Financial institutions must be prepared to incorporate these technologies into their compliance programs.

Strengthening Insider Risk Management Programs

Insider risk management programs are critical in preventing financial crimes. Key features of an effective program include:

  • Governance structure with board and senior management oversight
  • Cross-organizational participation
  • Use of technical tools to monitor behavior combined with human input and analysis

Key Takeaways

Financial institutions must be prepared to detect and prevent financial crime, including fraud, corruption, and terrorist financing. Strengthening controls around evolving regulatory focal areas, incorporating machine learning and enhanced data analytics into compliance programs, and strengthening insider risk management programs are critical in preventing financial crimes.

Authors

  • Amy S. Matsuo, Principal at KPMG LLP
  • Edwige Sacco, Principal at KPMG US
  • Todd Semanco, Partner at KPMG US
  • Matthew P. Miller, Principal at KPMG US

KPMG Regulatory Insights

KPMG Regulatory Insights is the thought leader hub for timely insight on risk and regulatory developments. Get the latest perspectives on evolving supervisory, regulatory, and enforcement trends.

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