Tackling Financial Crime: Now Is the Time to Break Down Silos

Forensic & Litigation Consulting | Financial Services

July 9, 2020

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The sharing of financial crime intelligence within financial services is often limited and segregated. Technology can bridge the gap between jurisdictions, business lines and departments, whilst saving time on investigations, driving down costs and identifying financial crime typologies. So why do organisations persist in using an outdated, fragmented approach to financial crime risk management?

Intelligence Sharing Is the Cornerstone of an Effective Anti-Financial Crime Framework

Amid the Coronavirus pandemic, now more than ever, firms need to find a more effective way to share intelligence on financial crime to ensure they maintain effective controls and mitigate risks. The Financial Conduct Authority has stated that criminals are taking advantage of the current situation and targeting firms’ systems through fraud and exploitation schemes1.

The Financial Action Task Force (FATF) is also driving an effective information sharing initiative, highlighting that sharing information is essential for the effective identification, mitigation and management of money laundering/ terrorist financing (ML/TF) risk2.

The Unintended Consequences of a Legacy Approach

Financial Crime Compliance (FCC) strategy is often based on continuity, governed by traditional silos and powered by legacy technology that results in path dependency. These traditional approaches can stifle innovation and create a resistance to change that results in ineffective controls.

For many organisations, responsibilities to identify and investigate potential financial crime risks are broken down into specialisms such as Bribery and Corruption, Sanctions or Fraud. These FCC teams are then segregated according to the line of business and geographical location in which they and their respective customers operate. In the context of larger financial institutions, this can include operations across 60+ jurisdictions and multiple business lines.

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