Norway’s Top Experts Discuss Financial Crime Prevention and Technology: A Balancing Act Against Advanced Criminal Networks and Cryptocurrencies

In a packed auditorium filled with financial professionals, law enforcement agents, and journalists, four esteemed experts shared their insights on the latest trends in financial crime and the role of technology in preventing it in Norway. This article summarizes the key takeaways from the panel, organized by FCG Financial Crime Prevention.

Panelists

The panel included:

Sebastian Claydon Takle, DNB’s Financial Cyber Crime Centre (FC3)
Eirik Sneeggen, National Cyber Crime Centre (NC3)
Ola Westerberg, investigative journalist and ICIJ member
Henrik Skådinn, Senior Manager at FCG Norway and a former superintendent of The Norwegian Police Service
Louise Brown, anti-corruption auditor from the FCG Financial Crime Prevention team in Sweden

The importance of transparency and intelligence sharing to combat cyber-related financial crimes was a common theme throughout the discussion.

Criminal Networks

According to Takle, criminal networks trade services and establish platforms for knowledge transfer in the digital sphere. He emphasized that banks and financial entities need to be more open about their exposure to identify deviations in behavioral patterns and normal trends.

Fraud and Digital Advanced Criminality

DNB identified fraud worth 920 million NOK (approximately €87 million) in 2021, of which 734 million was stopped. There was a 60% increase in fraud cases and a 300% increase in digital fraud between 2018 and 2020. These trends indicate more advanced arrangements and a growing digital criminality.

Bitcoin is often used as a payment method for ransomware attacks. The practice of reporting incidents to the Financial Police when several incidents can be linked to one specific actor was revealed by Takle.

Fraud and Money Laundering

Sneeggen from Kripos highlighted the connection between fraud and money laundering, with 33% of organized crime identified to be involved in money-laundering also involved in fraud. Advanced criminal networks have grown to the size of state-owned enterprises, using cryptocurrencies to cover their tracks and expand their criminal income streams.

The Role of Cryptocurrencies

The use of cryptocurrencies presents both opportunities and limitations for criminals. While they can be used to move funds out of the banking system and into less established systems, the challenge lies in spending the cryptocurrencies. Criminals often exploit the lack of knowledge and experience in their victims to manipulate them and disregard red flags.

Understanding the Competence Required

So, what makes it possible to manipulate victims, and what makes anyone willing to disregard red flags? Westerberg, the investigative journalist, weighed in on the need to understand the areas of competence required to tackle these challenges. Skådinn added that organizations must put more focus on financial crime prevention than on regulatory compliance. He suggested asking the question, “How would your organization act if there were no regulatory requirements, and how would that impact efficiency?”

Developing Relevant Competencies

Experts emphasized the importance of developing relevant competencies, as teams with the same type of competencies may only provide the same answer. They suggested detecting rapid changes in transactional patterns, analyzing behavioral patterns linked to age and sex, and understanding the use of Virtual Private Networks (VPN), The Onion Router (TOR), and the darknet.

Conclusion

In conclusion, the panel discussed the need for financial institutions to remain vigilant against growing financial crimes enabled by technology, emphasizing the importance of transparency, information sharing, and developing the right competencies to stay ahead of the curve.