Dutch Financial Crimes Fighters: Tech Innovations and Collaborations Against Money Laundering and Terrorist Financing in the Netherlands
Financial crimes, such as money laundering, fraud, terrorist financing, tax evasion, or forgery, pose a daily challenge for the global economy. These crimes involve the illegal conversion of property ownership for personal gain and can be challenging to detect. In the Netherlands, authorities and financial institutions are under immense pressure to prevent an estimated EUR 21.9 billion in financial crimes annually, with over EUR 16 billion originating from the Netherlands alone. In this article, we delve into the world of anti-money laundering (AML) and counterterrorist financing (CTF) experts, uncovering their daily battles and visions for the future.
Financial Crimes: A Global Challenge
Financial crimes, such as money laundering, fraud, terrorist financing, tax evasion, or forgery, are a daily reality for the global economy. While difficult to detect, financial crimes involve the illegal conversion of property ownership for personal gain. Banks, authorities, and tech innovators work together to prevent financial crimes and cut off illicit funds from fueling criminal activities.
Case in Point: Money Laundering
Money laundering, a key financial crime and an integral part of organized crime, is often committed in three stages: placement, layering, and integration. The Dutch Police define it as “the conduct of transactions to conceal the origin of illegally obtained money.” With over EUR 16 billion laundered annually in the Netherlands, and an additional EUR 5-9 billion in Belgium and Luxembourg [1], criminals constantly explore new ways to exploit emerging technologies for their gains. The increasing complexity of international transactions and cryptocurrencies compels banks and authorities to innovate and collaborate to stay ahead.
Players in the Financial Crimes Prevention Landscape
Financial institutions act as gatekeepers, handling the placement of illicit funds into the financial system. They have a responsibility to report suspicious transactions to the authorities. RegTech innovators and tech companies have joined the mix to help financial institutions detect financial crimes with advanced AI and technology [2]. The Dutch landscape boasts notable collaborations, including:
- Transaction Monitoring Netherlands (TMNL): A collaboration of five major banks.
- Financieel Expertise Centrum (FEC): A joint partnership between various entities to strengthen the financial sector’s integrity.
Stakeholders and Their Roles
Financial institutions, as gatekeepers, need to maintain rigorous AML and CTF programs. Supervisors, such as the Dutch National Bank (DNB), ensure they follow regulations and procedures to combat financial crimes. Investigators, such as the Dutch Financial Intelligence Unit (FIU), receive reported suspicious transactions, while prosecutors, such as the Openbaar Ministerie (OM), seek to prosecute the offenders.
Collaboration: A Necessity for Success
Combating financial crimes is a team effort, and no singular party can tackle the challenge alone. Supervisors, financial institutions, and investigators form the backbone of a thriving ecosystem against financial crimes. Through national collaborations and international partnerships, such as the Financial Action Task Force (FATF), they unite in the mission to create a more secure financial landscape.
IBM’s Role in the Fight Against Financial Crimes
As financial crimes evolve, expert knowledge and advanced technological solutions are crucial to combat the threat effectively. IBM empowers clients in this domain with its range of services, from digitalizing KYC and AML to applying AI in enhancing due diligence and customer risk rating [3].
For more information, please contact:
Misha Krung Client Partner | Banking IBM Global Business Services
[1] De Nederlandsche Bank (DNB), Statistieke Cijfers 2020, p. 190–191 [2] KPMG, RegTech Watch: The Future of AML and Compliance, 2017 [3] IBM, Services for AML, KYC, Fraud Detection and Surveillance, 2021.