Emerging Risks in Financial Crime Threaten Gibraltar’s Economy
Financial crime is on the rise, with increasingly complex threats linked to money laundering, fraud, human trafficking, sanctions evasion, and terrorism. The consequences are dire, causing significant economic and social harm globally.
A Critical Juncture for the Financial Services Industry
As gatekeepers of the financial system, institutions in Gibraltar have a critical role to play in combating this threat. They must invest heavily in resources, technology, and expertise to meet the demands of regulators, law enforcement, shareholders, and customers who expect them to protect against financial crime.
Challenges Faced by Institutions
However, outcomes against financial criminals remain disappointing, and institutions face numerous challenges as they navigate an increasingly polarized geopolitical landscape, a climate crisis, and significant transformation within the financial services sector. The rapid evolution of technology - including faster payments, digital currencies, and AI - is also driving change, enabling organized criminal networks to scale their operations and sophistication.
Drivers of Change
Our research has identified key drivers of change that will shape the future of financial crime over the next five to ten years. These include emerging technologies, evolving customer expectations, and the increasing complexity of threats.
Key Drivers of Change
- Emerging Technologies: Faster payments, digital currencies, and AI are driving change in the financial services sector.
- Evolving Customer Expectations: Customers expect institutions to protect against financial crime while providing convenient and accessible services.
- Increasing Complexity of Threats: Money laundering, fraud, human trafficking, sanctions evasion, and terrorism present significant challenges for institutions.
A New Approach is Needed
Current approaches to tackling financial crime are no longer effective in addressing these changing threats. They also present an opportunity for innovation and a more dynamic, efficient model that can better protect against financial crime.
Key Changes Required
To move towards this future state, we believe six key changes must be implemented:
- A More Proactive Approach to Risk Management: Institutions should take a proactive approach to risk management, identifying and mitigating potential threats.
- Greater Use of Technology: Technology can enhance detection and prevention of financial crime, reducing the risk of breaches.
- Improved Collaboration: Collaboration between institutions and stakeholders is essential for sharing best practices and staying ahead of emerging risks.
- Enhanced Training and Development: Professionals in the financial services sector need to be equipped with the skills and knowledge to tackle complex threats.
- Greater Emphasis on Customer Education and Awareness: Customers must understand the risks associated with financial crime and take steps to protect themselves.
- More Effective Regulation and Oversight: Regulators and overseers must work closely with institutions to ensure they have the necessary resources and expertise to combat financial crime.
Deloitte: Your Partner in Combating Financial Crime
As a leading provider of advisory services, Deloitte Advisory in the Crown Dependencies and Gibraltar has expertise across Risk and Regulatory, Internal Audit, Cyber, and Digital Forensics. Our team is part of the broader Deloitte UK network, giving us direct access to wider resources and expertise.
By working with Deloitte, institutions in Gibraltar can stay ahead of emerging risks in financial crime and protect their customers, reputation, and bottom line.