New Year’s Resolutions For Fighting Financial Crime
By Stuart Clarke
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New Year often encourages me to think about the challenges, opportunities and emerging trends that will be at the forefront of our minds as we tackle financial crime in 2023 and beyond. In no particular order, these are the 5 things that I would like to either see an increased focus on, or that I believe will become a more prominent topic throughout 2023.
1. Effective sharing and collaboration
The need to collaborate across public and private sectors to improve our ability to combat financial crime is clear. Bodies like FATF, for example, continue to draw into focus a need to build collaborative frameworks that not only help us to respond to financial crime, but to get on the front foot and prevent it. In 2023 it’s critical that positive conversations across the public and private sectors continue to take place. In particular, collaboration is needed to address gaps in knowledge that could easily be filled by the sharing of data, in turn increasing the effectiveness of anti-financial crime efforts.
2. NFTs – and connected crime
A non-fungible token (NFT) is a form of a digital ledger stored on a blockchain and is commonly associated with digital assets such as photos, videos, or audio. NFTs grew in popularity in 2021 and are often hugely valuable. Yet with this value comes risk in the form of fraud and money laundering. Whilst there are already public examples of NFT-related fraud, I anticipate that these risks will start to move sharply into focus in 2023.
3. Improved use of technology
Investment in technology-based solutions to fight financial crime has been significant in recent years, but is it working and has it been as effective as we desired? The story of Frankenstein highlights the power of scientific ambition, but also the dangers of going a step too far. We must be careful not to build our own Frankenstein anti-financial crime solutions that fail to produce outcomes that are explainable. Instead, we need to focus on a holistic vision and workflows designed around a set of defined and integrated outcomes, and on implementing technology that is complementary and extensible. In this way, we can make sure that the use of technology is effective and coherent.
4. Less talk of AI and more talk of outcomes
Almost every 2023 prediction whether it be financial crime, cyber or counter terror initiatives will contain some reference to a broader use of AI. While I fully support the use of technology in solving complex problems, I find that we are often more focused on AI than the problems we are trying to solve. AI and machine learning are very effective at solving defined problems, however when it comes to complex problems and undefined data sets, AI is not the only solution. In 2023 I would like to see more attention directed toward defining the problem/s and ensuring that the best technology for the problem at hand is selected. For example, intelligent automation solutions are often useful in investigations that involve live, constantly changing data.
5. More focus on the environment
Environmental crimes like wildlife trafficking, illegal logging and mining are not only having a major impact on biodiversity – they are also linked to serious financial crimes on a global scale. More focus on disrupting these crimes is needed – such as proposals for a new international agreement to criminalize wildlife trafficking made by environmental crime expert John Scanlon. Our increasing environmental awareness will start to have a positive impact in 2023: I believe that in 2023 individuals and businesses alike will continue to reflect on their own impact on the environment. More businesses will strive to reduce their environmental impact and become carbon neutral, and individuals we have never been better informed on how to reduce our own footprint. Ultimately I hope that this will lead to the funds that fuel these crimes being cut off.
Watch our webinar on environmental crime with John Scanlon and Traffic here.
Taking predictions further
With changes of this nature, 2023 could prove to be the year where we finally turn the tables on exploitative financial criminals with improved collaboration and use of technology.
To talk about how we can help your organisation meet its goals in 2023, get in touch.