Financial Crime World

Financial Crime Risk Management Reform: Global Recommendations

Effective financial crime risk management is crucial for preventing illicit activities and maintaining the integrity of the global financial system. In this article, we will outline key recommendations for governments, reporting institutions, and regulatory bodies to enhance the effectiveness of Suspicious Activity Reports (SARs) in a global context.

Leveraging Data Analytics and Collaboration

1. Leveraging data analytics

  • Use data analytics to identify high-value SARs
  • Share best practices across jurisdictions
  • Enhance collaboration between public and private sectors

2. Introducing incentives for reporting institutions

  • Offer reduced penalties for overreporting
  • Encourage a more proactive approach to suspicious activity detection

Prioritizing Quality Over Quantity

3. Implementing effective filtering and prioritization mechanisms

  • Allow for the effective filtering and prioritization of SARs based on their value and relevance

4. Enhancing international cooperation

  • Establish more agile processes for sharing financial intelligence
  • Develop global SAR filing systems

Evaluating Effectiveness

5. Standardizing approach to evaluating SAR regimes

  • Help policymakers understand which reforms are most effective in enhancing the overall quality and impact of SAR reporting

Reducing False Positives

6. Implementing measures to reduce risk of innocent parties being reported

  • Provide feedback on low-value or unfounded SARs
  • Introduce mechanisms for disputing false positives

Enhancing Collaboration

7. Prioritizing international cooperation through efficient data sharing arrangements

  • Facilitate a global view of suspicious activities across multiple institutions and jurisdictions

8. Reducing burden on reporting institutions

  • Adjust thresholds for what constitutes a suspicious activity
  • Explore alternative methods for identifying high-risk transactions

Supervisory Frameworks

9. Ensuring supervisory frameworks support efforts to dial up or down against mutually agreed threats

  • Allow for the effective integration of funds such as can be set out in geographical targeting orders

Global Cooperation

10. Enhancing collaboration with international partners through more efficient data sharing arrangements

  • Facilitate a global view of suspicious activities across multiple institutions and jurisdictions