Enhancing Financial Intelligence for Better Anti-Financial Crime Systems

Introduction

Effective management of financial crime requires robust systems that leverage financial intelligence. However, current mechanisms face numerous challenges, hindering their ability to deliver optimal results.

Key Challenges in Financial Crime Risk Management

Improved Sharing of Information: Enhanced sharing of financial activity, threat, and risk data linked to crime and terrorism can improve the management of financial crime.
Challenges in SAR Reporting: The Suspicious Transaction Report (STR)/Suspicious Activity Report (SAR) regime is a cornerstone of global financial crime risk management, but it faces challenges such as inconsistent legal frameworks, management of SAR-type information, privacy, and bank secrecy.
Low-Value Reporting: High volumes of low-value reporting consume resources in both the public and private sectors, often without delivering commensurate gains in reporting quality or improved outcomes.
Need for Feedback and Prioritization: Feedback, information sharing, and prioritization between the public and private sectors are underdeveloped, which can lead to inaccurate identification of suspicion and ineffective application of the risk-based approach.
Limitations on Data and Information Sharing: Approaches to data and information sharing are often limited by national and organizational borders, making it difficult to share global views with a single or group of national law enforcement bodies.

Reforming SAR Mechanisms for Enhanced Effectiveness

To overcome these challenges, SAR mechanisms should be reformed in practical ways to enable them to become more effective. This includes:

Prioritizing Quality Over Quantity

Reforming the system to prioritize high-quality reporting over low-value reporting.
Implementing measures to ensure that resources are focused on reports with a higher likelihood of leading to meaningful outcomes.

Enhancing Feedback and Prioritization

Improving feedback, information sharing, and prioritization between the public and private sectors to support accurate identification of suspicion and effective application of the risk-based approach.
Developing processes for regular review and assessment of reporting quality and effectiveness.

Allowing Efforts to Be Dialed Up or Down

Enabling efforts to be scaled up or down against mutually agreed threats or priorities.
Establishing clear criteria for determining when to escalate or de-escalate efforts based on changing threat landscapes.

Overcoming limitations on international information sharing by developing processes and arrangements that operate with greater agility than criminal networks.
Implementing secure and efficient mechanisms for sharing data and intelligence across borders.