Financial Crime Prevention Strategies in Philippines Still Lacking Despite Government Efforts

==============================================================

The Philippines remains on the Financial Action Task Force (FATF) gray list due to technical compliance deficiencies with its anti-money laundering, terrorist financing, and proliferation of financing programs. The government’s efforts to prevent money laundering have been criticized for being insufficient.

Collective Intelligence: A Key to Effective Financial Crime Prevention

Tookitaki AML experts and legal pundits recently held a webinar series called Compliant Conversations, discussing how fintech companies can comply with the Anti-Money Laundering Act (AMLA) in the Philippines. The event highlighted the potential impact of collective intelligence on the financial sector, citing the need for improved financial intelligence.

Effective Strategies for Detecting Money Laundering

Enrique V. Dela Cruz, Jr., Senior Partner and compliance attorney at DivinaLaw, emphasized that comparing customer transactions and studying irregularities in established patterns is an effective way to detect money laundering. “If these transactions were consolidated into a shared database that can be accessed by financial institutions, it could equip the public and private sector to monitor fraudulent transactions better,” he said.

Challenges to Consolidating and Comparing Customer Transactions

However, consolidating and comparing customer transactions poses challenges due to incomplete records at most financial institutions. The Bangko Sentral ng Pilipinas (BSP) and Anti-Money Laundering Council (AMLC) have pushed for digitization of records, but many local banks still manually monitor transactions.

Fintech Companies’ Advantage in Financial Crime Prevention

Fintech companies have an advantage over traditional financial institutions in this regard, with technology already integrated into their business models. They can seamlessly adapt new innovations encouraged by the government, starting with automated transaction monitoring.

Key Features of Effective Automated Transaction Monitoring Systems

Akshara Karanjekar, an AML expert at Tookitaki, noted that an effective automated transaction monitoring system should enable fintech companies to detect and assess suspicious transactions based on customer backgrounds and profiles. The system should also facilitate holistic reviews of customer transactions over a short period to identify unusual or suspicious streams.

Emerging AML Solutions for Fintech Companies

Abhishek Chatterjee, Founder & CEO of Tookitaki, emphasized the importance of emerging AML solutions that are agile and scalable in detecting financial crime. “Fintech companies have the agility to lead the use of digitally transformed AML compliance programs that will promote financial intelligence in the country,” he said.

The AFC Ecosystem: A Collaborative Effort Against Financial Crime

Tookitaki has pioneered The AFC Ecosystem, a community-driven initiative that helps remove information vacuum created by siloed operations. The Anti-Financial Crime (AFC) Ecosystem includes a network of experts and provides a platform for sharing financial crime scenarios. This collective intelligence enables a large group of AFC experts to pool their knowledge, data, and skills to tackle complex problems related to financial crime.

Conclusion

Financial crime can’t be fought in silos; it requires a collaborative effort within the industry. The AFC Ecosystem enables financial institutions, risk advisers, legal firms, consultancies, and AFC experts to share domain knowledge related to financial crime for the benefit of society.