Financial Crime World

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Financial Crime Prevention Tips in South Georgia and South Sandwich Islands

The threat landscape for financial institutions is rapidly evolving, driven by technology advancements such as cybersecurity, ransomware, cryptocurrency, and identity theft.

Regulatory Expectations

In response to these emerging threats, regulatory expectations are increasing. Financial institutions must adopt innovative technologies to improve the effectiveness of their fraud and financial crimes risk management programs. Regulators emphasize the use of machine learning and enhanced data analytics to combat evolving threat risks.

Key Regulatory Challenge Areas for 2022

  1. Corruption
    • Financial institutions must be aware of corruption risks associated with clients, business partners, and employees.
  2. Cybercrime
    • Regulators will expect financial institutions to have effective cybersecurity measures in place to protect against cyber threats, including ransomware demands via virtual currency.
  3. Terrorist Financing
    • Institutions should be vigilant for terrorist financing activities, particularly through cryptocurrency transactions.
  4. Fraud (including SIF)
    • Financial institutions must implement robust anti-fraud controls and monitor their systems for suspicious activity reporting related to fraud.
  5. Transnational Criminal Organization Activity
    • Regulators will expect financial institutions to have effective risk-based AML compliance programs in place to detect and prevent transnational criminal organization activity.
  6. Drug Trafficking
    • Financial institutions should be aware of the risks associated with drug trafficking activities, particularly through cryptocurrency transactions.
  7. Human Trafficking
    • Institutions must implement robust controls to prevent human trafficking activities, including through suspicious activity reporting.
  8. Proliferation Financing
    • Regulators will expect financial institutions to have effective risk-based AML compliance programs in place to detect and prevent proliferation financing activities.
  9. Beneficial Ownership Information Reporting
    • Financial institutions should be aware of the risks associated with beneficial ownership information reporting, particularly in high-risk countries or industries.
  10. Environmental Crimes
    • Institutions must implement robust controls to prevent environmental crimes, including through suspicious activity reporting.

Regulatory Perimeters Continue to Expand

The regulatory perimeters continue to expand as regulators increasingly focus on emerging threats and technologies. Financial institutions should expect high levels of supervision and enforcement activity across these ten key challenge areas in 2022.

By Amy S. Matsuo, Principal, U.S. Regulatory Insights & Compliance Transformation Lead, KPMG LLP; Edwige Sacco, Principal, KPMG US; Todd Semanco, Partner, Advisory, Financial Services Risk, Regulatory & Compliance, KPMG US; and Matthew P. Miller, Principal, Advisory, Cyber Security Services, KPMG US.

KPMG Regulatory Insights is the thought leader hub for timely insight on risk and regulatory developments. Get the latest perspectives on evolving supervisory, regulatory, and enforcement trends.