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The Evolving Landscape of Financial Crime: 5 Key Takeaways

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The financial crime landscape is changing rapidly, and financial institutions must adapt to address this growing threat. Here are five key points to consider when tackling financial crime:

1. Financial Crime is a Holistic Issue

Financial crimes such as fraud, money laundering, and cybercrime require a comprehensive approach that involves multiple teams and stakeholders. This means that financial institutions must take an integrated approach to addressing these issues, rather than treating them in isolation.

• Examples of holistic approaches include:
  • Collaboration between compliance, risk management, and IT teams
  • Sharing information across departments and business units
  • Developing policies and procedures that address financial crime from multiple angles

2. Improve Data Quality

Financial organizations need to improve and standardize their data to increase their capacity for centralized analysis and derive insights from unstructured information sources. This includes:

• Enhancing data collection processes
• Standardizing data formats and structures
• Implementing data analytics tools and techniques

3. Secure the Right Talent

The battle to solve financial crime is rapidly evolving into a race for talented individuals who can complete analytical and critical assessments in emerging markets. Financial institutions must attract and retain top talent with expertise in areas such as:

• Data analysis and visualization
• Machine learning and artificial intelligence
• Cybersecurity

4. Prepare for the Future

Financial institutions should consider both current and future threats, such as crypto-currencies and commercial espionage, when developing new frameworks for addressing financial crime.

• Examples of emerging threats include:
  • The rise of decentralized finance (DeFi) and its associated risks
  • Increased use of AI and machine learning in cyber attacks
  • Growing concerns around supply chain security

5. Take an Enterprise-Wide Approach

An effective approach to addressing financial crime requires significant levels of internal communication and agreement, and can result in cost and performance gains beyond the compliance function.

• Benefits of taking an enterprise-wide approach include:
  • Streamlining and increasing the effectiveness of current compliance measures
  • Improving customer service through more efficient use of resources
  • Developing systems that improve marketing effectiveness