Financial Crime World

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Financial Crime Prevention in French Southern Territories: Key Players Make a Difference

In the face of increasingly sophisticated financial crimes, regulators and institutions in the French Southern Territories (FSTs) are under pressure to innovate and promote a culture of compliance. The FSTs’ unique geography and economic landscape present distinct challenges for financial crime prevention, but key players are rising to the occasion.

A Dynamic Approach to Financial Crime Prevention

A More Dynamic Approach to KYC

Firms operating in the FSTs must remain compliant with ever-changing regulations while battling rising labor costs and pressure to reduce overhead. A perpetual Know Your Customer (KYC) dynamic approach to risk management could be just what they need to navigate these internal and external pressures.

  • Benefits of a Dynamic KYC Approach:
    • Improved risk assessment and mitigation
    • Enhanced customer experience through streamlined onboarding processes
    • Increased efficiency and reduced costs associated with manual KYC checks

The fraud landscape in the FSTs includes increased cyber-attacks, fraud surges, and new digital payment types. Successful Fraud Ready institutions establish processes that focus on reacting quickly to emerging threats and standing up responses without over-governance and rules.

  • Key Components of a Fraud Ready Strategy:
    • Proactive threat intelligence and monitoring
    • Rapid response and incident management
    • Continuous improvement and adaptation

Rising Financial Crimes Risks in Digital Payments

Criminals are increasingly engaging in sophisticated schemes to obtain and/or launder illicit funds through digital payments. This article identifies three top financial crime trends and typologies, as well as an example of a five-step money laundering and fraud scheme.

  • Trends and Typologies:
    • Increased use of cryptocurrencies for illicit activities
    • Sophisticated schemes involving digital payment processors and gateways
    • Exploitation of vulnerabilities in online banking systems

Financial Crimes in Digital Assets and Cryptocurrencies

Virtual Asset Service Providers (VASPs) face increased risks involving digital assets due to inadequate controls and/or failures in areas such as Weak Customer Due Diligence (CDD), Weak Sanctions Monitoring, Unregistered VASP and Compliance Obligations. Additional Anti-Money Laundering risks continue to evolve for Peer to Peer (P2P) & Decentralized Finance (DeFi) Service Providers, Non-Fungible Token (NFT) Marketplace, and Traditional Financial Institutions.

  • Key Risks and Challenges:
    • Lack of regulatory clarity and oversight
    • Inadequate risk management and compliance frameworks
    • Rapid evolution of digital asset technologies and markets

Automating AML

Three fundamental reasons to invest in financial crime automation strategies: cost takeout, customer experience, and risk aversion. By providing examples of Financial Crimes automation and technology, we prove that automation benefits significantly outweigh the costs…and risks.

  • Benefits of Automation:
    • Improved efficiency and reduced manual errors
    • Enhanced customer experience through streamlined processes
    • Increased confidence in compliance and risk management