Financial Crime - Standing up for “The Little Guy”; what about the rest of us?

Governing and regulatory bodies around the world stepping up their fight against Financial

Crime. Actions include setting up committees, making political statements, producing yet

more contradictory rules and regulations, and fining firms for their failures. They are doing

their job, what about the rest of us?

There is a public litany of high-profile fines relating to AML and recently the investigation in

Estate Agents in the UK shows the appetite to chase other entities than just banks. If you

are a lawyer, accountant, casino/on line gaming provider, art dealer or even a trust. You are

already in the cross-hairs.

Governments and regulators could do better too. Investment in FIUs especially technology

related to data analysis and information sharing is pitifully low. The law of unintended

consequences kicks in here as organisations ruthlessly reduce their risk exposure to

Financial Crime at the expense of Social Inclusion.

Using the political slogan of the moment, it is time for firms to “Take Back Control”.

We help ourselves by knowing who is doing what to help stop money laundering and

financial crime because sure as eggs are eggs, you will be a victim.

Simple policies that show you have looked at the risk and from that come up with a

reasonable risk appetite are a good starting point.

“Reasonable” is the likely legal requirement for all your AML policies and activities but this

does vary from country to country. The USA rules for example are aiming as always to be

less open to interpretation.

And then we come to doing it. In today’s digital world, anyone at risk from Financial Crime,

including those outside the regulated sector, has to make use of technology – Big Data, AI

but more practically RPA and Machine Learning through a micro services architecture.

But technology comes with a real cost which must be measured against the cost of NOT

complying and increased reputational risk. The big players (e.g. Global Banks) have the

budgets – what about the rest of us?

So how do we take back control? We have to do this, not because we cannot rely on the

government /regulators but because we need to control our own destiny. We can expect

even less to be spoon fed while governments wrestle with competing budget requests.

While regulators and governments play their part (which they probably are) in promoting

technology and shared data through FIUs, the rest of us should take advantage of

microservices architectures, SAAS and in some of the new shared service business models

that are emerging.