Monthly Update

By Charles Brown

Business Forum

Last month, we saw a strong focus on ‘effectiveness’ in the fight against financial crime. The need to prioritise, define and improve effectiveness was the core theme of a number of events that we attended – a trend we expect to continue in the coming months.

What we attended

Moving the Needle at the FinCrime World Forum

John Cusack (Chair of the Global Coalition to Fight Financial Crime), hosted a panel of experts to discuss the challenges faced by the global AFC community when working to achieving greater effectiveness. The discussion was fascinating with some great contributions.

Gemma Rogers, co-founder of FINTRAIL, highlighted how running a truly effective AFC program is“easier said than done … not because effectiveness is impossible to achieve but because the concept is not well understood”. Gemma referenced reporting that discussed how firms were being encouraged to implement AML frameworks in ways that“look familiar to regulators, and with the notion of being compliant as the goal” rather than taking a more innovative approach that might have a more positive impact on managing a firm’s AFC risks. Gemma concluded by saying that defining effectiveness as“doing the right thing for the right reason and avoiding the tick-box compliance” has the potential to enable better innovation in AFC operational practices and reduce the harm caused by financial crime.

What we’ve been reading

A report released by the City of London Corporation and RegTech Associates on the state of the UK RegTech industry made for an interesting read. The report acknowledges some very positive signs about – such as two thirds of RegTechs having experienced growth in 2020, and over 80% expecting further growth in 2021  – but the report also discussed the challenges faced by RegTechs, especially those looking to provide innovative solutions designed to tackle financial crime.

NOTE: The report formed the basis for a panel discussion on which we participated at the FinCrime World Forum. Watch the session on demand here.

What we’ve been listening to

June’s episode of The Dark Money Files(TDMF) podcast Stings, Hacks and Honeypots covered the recent international law enforcement operation, led by the US Federal Bureau of Investigation and the Australian Federal Police, that culminated in the seizure of 250 firearms, over 20 tonnes of illicit drugs and the arrest of hundreds of criminals globally. TDMF’s Ray Blake and Graham Barrow suggested that Operations Ironside and Trojan Shield highlighted the ways in which transnational organised crime groups operate, providing “compelling evidence for the existence of a global, albeit informal network of criminal gangs … and the money launderers that provide services to them”.

What we’re looking forward to

Throughout July, the Royal United Services Institute’s Centre for Financial Crime and Security Studies is running a series of workshops on the The FATF Standards and Unintended Consequences which examines the history of the global AML standard setter, as well as its potential future direction.

This series will be essential viewing for anyone with an interest in understanding how the global AML framework was formed and what needs to happen to make it more effective.

New call-to-action