Financial Crime World

FINANCIAL INSTITUTIONS STRUGGLE TO DETECT MONEY LAUNDERING CRIMES

LONDON - A new global research report reveals that financial institutions are struggling to detect money laundering crimes, with human trafficking emerging as one of the most prevalent problems.

Human Trafficking: A Very Real Threat in 2020

According to the UN, there are an estimated 25 million victims of trafficking worldwide, making this crime one of the most prevalent money laundering offences globally. The report found that over a quarter (26%) of financial institutions admitted to having to report and investigate criminal financial activity linked to human trafficking.

Customers Want Banks to Demonstrate a Strong Ethical Stance

The research also revealed that customers are willing to leave banks that don’t demonstrate a strong ethical stance. Three-quarters (75%) of customers would leave their bank or financial institution if they fail to demonstrate proactive approach to money laundering/ethical practices linked to money laundering.

Most Financial Institutions Lack an Anti-Money Laundering Strategy

The report found that almost a fifth (19%) of the FI professionals surveyed globally currently still do not have a strategy in place to combat the most heinous money laundering crimes. There is also a very real and present danger that COVID-19 will get in the way and provide a major setback.

Key Findings

  • Over a third (36%) of financial services professionals are not confident in spotting signs of human trafficking in their customers’ transactions.
  • 28% of financial services professionals have stated that financial crimes leading to human trafficking already account for significant financial losses for them.
  • The projected total cost to financial institutions to detect financial crime stands at $180.9 billion globally, with $138.8 billion in Europe.

Call to Action

Peter Fisher, Financial Crimes Product Director at BAE Systems, commented: “Money laundering is a challenge that goes way beyond financial risk and corporate reputation. Yet it is also shrouded in opacity. At this moment, criminals are rushing to take advantage of every opportunity to exploit gaps in the global financial system.”

To Read the Full Report

To read the full report, please visit www.baesystems.com/GlobalStateofAML

Notes to Editors

The research was conducted by Atomik Research in six markets: UK, USA, France, Germany, Australia and Singapore. 1. Qualitative research amongst 452 financial professionals in key roles working in compliance or risk management across Financial, Business, Banking or Insurance industries. 2. Quantitative research amongst 6,035 consumer respondents aged 18 – 65+. About BAE Systems Applied Intelligence: At BAE Systems Applied Intelligence, we help nations, governments and businesses around the world defend themselves against cybercrime, reduce their risk in the connected world, comply with regulation, and transform their operations. For further information about BAE Systems Applied Intelligence, please visit www.baesystems.com/ai.