Financial Crime World

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Financial Crime Risk Management Reform: Key Areas of Focus

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The Current State

The global financial crime framework still has a long way to go before it can deliver the required outcomes. Despite efforts to reform, there is broad agreement that change is necessary.

Key Areas of Focus

  • Standards for Information Sharing: Facilitating increased sharing of information is a fundamental enabler of an effective financial crime risk management system.
  • Data Privacy Considerations: Effective data protection measures must be in place to balance the need for information sharing with individual rights and freedoms.
  • Multilateral Cooperation on Financial Crime Data: Collaboration between countries and institutions is essential for preventing and investigating financial crimes.
  • Public-Private Partnership: Partnerships between government, regulatory bodies, and private sector entities are critical for effective financial crime risk management.
  • Asset Recovery: Efficient and effective asset recovery processes are necessary to disrupt and dismantle organized crime networks.
  • Fraud Detection and Prevention: Implementing robust fraud detection and prevention measures is essential for protecting consumers and the financial system.
  • Whole System Capabilities: A comprehensive approach that addresses all aspects of financial crime risk management is needed to ensure a strong and resilient system.
  • Measurement of Effectiveness Combined with Prioritization in the Anti-Financial Crime Framework: Effective metrics and prioritization are necessary to allocate resources efficiently and optimize outcomes.

Standards for Information Sharing

Facilitating increased sharing of information is a fundamental enabler of an effective financial crime risk management system. However, challenges persist in group-wide sharing and inconsistency in application across jurisdictions.

  • Recommendations:
    • The FATF should better test implementation status of Recommendation 18 through its Mutual Evaluation Report process.
    • Consider potential for future horizontal reviews of practical application of intra-group information sharing.
    • Revisions to associated interpretative note INR.2 could strengthen basis for implementation.
    • A new standard on establishing domestic and cross-border information sharing mechanisms as part of a key metric for an effective anti-financial crime system should be considered.

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