Payment fraud. Account takeovers. Money laundering. Clever financial criminals have many ways to profit from their victims.
It’s never been more important for financial services organizations (FSOs) to truly understand who they are doing business with. Knowing who is who and who is related to whom is critical for identifying bad actors, ensuring compliance and effectively managing risk.
As the world grows more accustomed to conducting business digitally, the need for the ease and convenience of faster payments is considered vital. However, as the general population adopts faster payments more readily, it gives rise to fraudsters utilizing new tactics to illicitly acquire both funds as well as access to accounts.
On September 9, 2021, the FCA sent a ‘Dear CEO’ letter to firms carrying out trade finance businesses. The letter informed firms of their requirement to conduct a financial crime risk assessment based on significant issues the FCA found, exposing firms to unnecessary risks.
Understanding your entities and their relationships is a crucial part of any risk management program. Over the years, the regulated sector has increasingly adopted new financial crime compliance systems and is now starting to use the latest technology to help monitor and detect suspicious activity effectively. However, in their current form, these controls are not sufficient on their own, as there is frequently still a gap in effective financial crime compliance. These shortfalls are often traced back to an organization’s data management processes and their ability to provide a trusted understanding of the entity and their relationships. How can the industry continue to understand entities better and efficiently identify links and relationships across their data while maintaining operational effectiveness?
A bombshell investigative report was released recently that exposed how the world’s wealthiest and powerful were able to use a hidden financial system to their benefit. It was no surprise that this report was released by the International Consortium of Investigate Journalists (ICIJ), a non-profit newsroom comprised of investigators that work with a global network of nearly 300 reporters and 100 media organizations in more than 100 countries. This group revealed profound investigations that exposed questionable activities, and many times, flat-out illicit activities by some of the most powerful people and organizations in the world.
Thanks to the proliferation of digital channels, organizations have access to massive quantities of data that can be used to attract and retain customers, and mitigate risk. But understanding what to look for and how to interpret it is a challenge that financial services organizations (FSOs) are facing today.
The FATF has highlighted several areas where improvement is needed at FIs in Japan. No doubt, the report was based on the AML/CFT measures in place as of November 2019, and as such does not recognise more recent achievements to address known weaknesses based on updated regulations.