Financial Crime World

Shifting the Paradigm: An Intelligence-Driven Approach to Financial-Crime Compliance and Anti-Money Laundering

The current procedure-driven model for financial-crime compliance and anti-money laundering (FCC/AML) is often ineffective, resource-intensive, and plagued by high false-positive rates. This article proposes a new approach that shifts the focus from procedures to intelligence-driven investigation.

Key Strategies for an Intelligence-Driven Approach

1. Integrate External Partnerships

Collaborate with various stakeholders to share intelligence and best practices:

  • Law enforcement agencies
  • Financial institutions
  • Tax-collection agencies
  • Shipping companies
  • Airlines
  • Social-media companies
  • Nonprofits

By sharing knowledge and resources, you can improve detection and reduce financial crime.

2. Realign Activities and Platforms

Streamline current FCC/AML operations by:

  • Eliminating non-essential activities
  • Adding more intelligence to decision-making processes
  • Automating manual tasks

This will reduce the strain on organizational resources and make your efforts more effective.

3. Build Public-Private Partnerships

Create partnerships with regulatory bodies, law enforcement agencies, and other stakeholders to:

  • Share information and resources
  • Improve detection and reduce financial crime

By working together, you can create a safer and more secure environment for all parties involved.

4. Invest in Special Investigative Teams

Establish dedicated teams of investigators who can work closely with law enforcement agencies to investigate and prosecute financial crimes.

5. Foster Deeper Regulatory Engagement

Encourage regulatory bodies to engage in more collaborative and innovative approaches to FCC/AML, providing a safe harbor for testing new solutions.

Benefits of an Intelligence-Driven Approach

  • Dramatically improved effectiveness in detecting and preventing financial crimes
  • Reduced strain on organizational resources by automating manual tasks and eliminating non-essential activities
  • Elevation of the profile of financial institutions as socially responsible actors in society, building public confidence in banks and the financial system
  • Higher shareholder value, equity returns, and reduced downside risk for companies with improved environmental, social, and corporate-governance profiles

By adopting this new approach, financial institutions can improve their FCC/AML efforts, reduce resources devoted to ineffective activities, and enhance their reputation as socially responsible actors in society.