Financial Crime World

Investigator-Centered Approach to Financial Crime: A New Way Forward

Financial institutions are constantly looking for ways to combat financial crimes, such as money laundering, terrorist financing, and other illicit activities. The investigator-centered approach is a new method that banks can use to improve their effectiveness in detecting and preventing these crimes.

Benefits of the Investigator-Centered Approach

The benefits of this approach include:

  • Dramatically Improved Effectiveness: By focusing on high-risk activities, banks can reduce false-positive rates and increase the signal-to-noise ratio of their due-diligence and monitoring processes.
  • Reduced Strain on Resources: Streamlining operations can free up resources for redeployment to special investigative teams that serve as better partners to law-enforcement agencies in investigating crimes.
  • Elevated Profile of Financial Institutions as Socially Responsible Actors: By improving detection and reducing financial crime, banks can help reduce instances of money laundering, drug smuggling, human trafficking, and other crimes.

Implementing the Investigator-Centered Approach

To implement this approach, banks should:

Eliminate Unnecessary Activities

  • Introduce Event-Based Review Cycles: For low-risk customers, introduce event-based review cycles to minimize unnecessary checks.
  • Remove Redundant Checks and Excess QA/QC: Identify and eliminate redundant checks and excess quality assurance and control (QA/QC) processes.
  • Reduce Defensive SARs: Minimize the number of defensive suspicious-activity reports (SARs).

Introduce More Intelligence into Decision Making

  • Improve Links and Optimize Processes Across Silos: Enhance performance by improving links and optimizing processes across silos.
  • Use Behavioral Information to Improve Client Risk-Rating Models: Utilize behavioral information to enhance client risk-rating models.
  • Maximize Use of KYC and CDD Data: Leverage know-your-customer (KYC) and customer due diligence (CDD) data to make informed decisions.

Automate Manual Tasks

  • Use Technology to Automate Manual Tasks: Implement technology solutions to automate manual tasks, particularly in information and documentation management.
  • Reduce Strain on Resources: By automating tasks, banks can free up resources for more critical activities.

By adopting the investigator-centered approach, banks can unlock organizational resources and make a significant impact in fighting financial crimes.