4 Strategies Your Financial Crime Investigations Unit Needs in 2022

By Charles Brown

Financial Intelligence Units

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    A recently published report, authored by the UK Parliament’s Foreign Affairs Committee, has underlined the severity of the challenges posed by financial crime and illicit finance. The report states that dark money, and the crimes that fuel it, not only pose a threat to the UK’s national security but also “to democracies worldwide, through the corrosive effect it has on our institutions, our politics and our financial systems.”

    Tackling these complex threats requires input from a range of actors including Government, law enforcement, the private sector, and civil society. And financial institutions (FIs), operating on the front lines of financial crime, have a critical role to play.

    Over the last decade, influential voices within the anti-financial crime community have called on FIs to move away from focusing solely on technical compliance, and towards an AML/CTF model that demonstrates the “effectiveness” of financial crime controls. And FIs are responding to these calls by building specialist financial crime investigations and intelligence units (FCIUs).

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    What is an FCIU?

    FCIUs are specialist functions that help FIs to demonstrate a desire to adopt a risk-based and effectiveness-driven approach to mitigating complex financial crime risks. Their primary purposes are to identify suspicious activity and provide law enforcement with valuable intelligence (in the form of higher quality SARs and STRs). While this description might sound very similar to the role carried out by traditional compliance units, FCIUs are configuring people, process and technology in novel ways.

    • People – FCIUs are made up of people from a range of professional backgrounds, including law enforcement and financial crime investigations as well as data science.
    • Process – These multi-disciplinary teams are seeking to identify suspicious activity by not only reacting to the outputs of transaction monitoring and customer screening systems, but also by undertaking proactive investigations focused on key priority areas – such as sanctions, terror financing, human trafficking and more.
    • Technology – FCIU officers are embracing a range of technologies – from open source intelligence tools, to network visualisation and analysis – to ensure that investigations (proactive and reactive) can be undertaken more efficiently and effectively.

    Here are four strategies you can implement when looking to build out a new, or enhance an existing FCIU.

    #1 Utilise the latest technology

    Financial crime risk management is largely becoming a data management exercise. Analysing patterns across large numbers of customers and transactions, and ensuring the most relevant data is presented to analysts in a timely fashion is leading to the adoption of advanced data and analytics techniques. Adopting novel technologies is essential, as hackers, cybercriminals, money launderers and terrorist organisations often have access to innovative tools themselves. 

    Some of the latest technologies used by FCIUs include: 

    • Cloud-based intelligence and data sharing platforms that centralise findings for international collaboration.
    • Data analytics tools are helping detect illicit activity by running advanced behavioural analysis across customer data and screening it against watchlists
    • Platforms that intelligently automate certain investigative activities can streamline and accelerate time-consuming processes
    • Network visualisation and analysis tools allow analysts to focus on clusters of potentially suspicious activities and networks of bad actors, rather than individual customers and transactions

    To enhance their effectiveness, FCIUs need technology that supports more robust investigations. Seamless cloud-based platforms eradicate clunky on-site system infrastructure, providing teams with flexible access to the latest tools.

    #2 Start using open source data

    Open source data (OSD) is a term that refers to any publicly available or licensable information which can be drawn from any number of sources. The result of gathering, analysing and converting OSD into insights upon which critical decisions can be made is known as open source intelligence (OSINT)

    OSINT has an established role in government intelligence and law enforcement investigations, so it’s perhaps unsurprising that many organisations are adding it to the arsenal of a modern anti-financial crime function. A number of national regulators have started to encourage greater adoption of open source searches; for example, in 2021, the European Banking Authority (EBA) stated that financial institutions should be incorporating “open source searches” as standard.1

    Harnessing OSD has many creative applications in anti-financial crime, for example:

    • Conducting thematic research to understand the latest trends and typologies
    • Collecting intelligence on the groups involved in financial crime, key players and associated businesses to proactively screen against customer and transaction data 
    • Undertaking complex investigations into high risk customers by leveraging information from news reports and social media to deep and dark web data.

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    #3 Use data from various sources

    Many organisations already using OSD rely only on what can be accessed through surface web search engines. But there are a wide range of OSD sources that can be utilised to glean insights that ultimately drive more successful investigatory outcomes.

    Connecting data from disparate sources enables analysts to better understand the context surrounding customer and transaction alerts, drawing links between potential threat actors, their groups and affiliations:

    • The surface web provides well-structured information such as news articles, social media and blog posts to kickstart investigations.
    • The deep web contains unindexed grey literature, ranging from corporate records to academic papers. Much of this is OSD but is unindexed by surface web search engines, necessitating the usage of specialist tools.
    • The dark web contains data from leaked records, marketplaces, illicit forums, legitimate censorship-free social media, and messaging boards.

    #4 Continuous improvement of processes

    As investigations and intelligence professionals, operating according to best practice, FCIUs need to continually improve processes to operationalise new knowledge and understandings. Failing to learn from investigations and implementing improvements to mitigate future risks, means that FIs will be missing an opportunity to maximise the value of their FCIU. 

    To facilitate continuous improvement, FCIUs need to decide what knowledge should be disseminated rather than siloed and make it available to the teams that would benefit from it most. Consider:

    • Communicating investigation results, e.g. introducing bulletins and updates that are sent out to internal stakeholders about recent trends and typologies
    • Ensuring that data analytics teams work closely with (or within) FCIUs to enhance the accuracy of anti-fraud and AML systems
    • Using the results of investigations and intelligence activities to revise onboarding and training procedures. 
    • Contributing findings (where appropriate) within public private partnerships in order to learn from and contribute to the broader community of investigators. 

    Information sharing and process optimisation is very important in combatting money laundering or terrorist financing. As criminal activity diversifies and evolves, FIUs must mobilise the knowledge gained. As the saying goes – it takes a network to defeat a network.

    How Videris can support your FCIU

    At Blackdot, we built our Videris platform to arm investigators with the tools and capability they need to conduct robust investigations. The platform delivers a single solution for the collection, analysis, and visualisation of data (especially open source data) to increase investigation efficiency.

    Videris comes with a wide range of additional functionality that can help produce desirable investigation outcomes, including:

    • Videris Search, which provides detailed results that span the surface, deep and dark web, ensuring instantaneous results and insights. 
    • Charts and network mapping which creates a compelling visual representation of organisational structures, publicly available social media networks* and other links between individuals. 
    • Cross-matching tools that form links between disparate sources, facilitating incisive decision-making processes.

    Deploying Videris for financial crime investigations allows FCIUs to demonstrate a commitment to a more effective, risk-based and intelligence-led approach to anti-financial crime risk management.

    Book a demo of Videris today, and see for yourself how a cutting-edge OSINT platform can augment your investigations and enhance the capabilities of your financial crime intelligence unit.

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    1  Final Report on Guidelines on revised ML TF Risk Factors

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