Financial Crimes Summit, 2015

We were proud to sponsor the Financial Crimes Summit held in Sydney at the end of July.  It was a great collection of industry and government representatives sharing information, concerns and solutions. With such an enormous body of information over the 2 days, we have taken the time to cut it down to some of the key takeaway messages which should provide you with some insight.  Please feel free to contact us at AML Solutions International for further information.

  1. Financial crimes involving the various new iterations of cyber crime and ID theft is a growing concern for both financial institutions and law enforcement.
  2. De-risking is currently a hot topic for financial institutions – with some consequences impacting on the alternative remitter sector struggling to remain in the regulated financial system.
  3. A point for debate revolves around the future regulatory management of the remittance sector which some industry members expect to return to its more informal hawala process of moving value without reporting.  Will this see the development of trade based hawala?
  4. We are seeing a diverse response by industry in the management of AML/CTF compliance.  Some sectors, as a result of adverse media exposure and regulatory penalties have thrown resources at the problem.  Other sections have not responded at all, preferring to offer a mirror to their head of AML compliance in order to show them the full size of their compliance team.
  5. AML/CTF compliance business units have always been viewed as costs centres rather than the opposite. Could the financial sector have a paradigm shift in their thinking and ask themselves; what is the cost of compliance versus the cost of non-compliance?
  6. Bitcoin and other crypto-currencies are here to stay and the financial sector.  The world’s’ central banks​ need to be more aware of this rapidly growing phenomenon and have a globally consistent regulatory and/or licencing approach.  One industry leader indicated that there is an estimated 153 virtual currencies in play today.
  7. We have seen a paradigm shift in law enforcement’s efforts from a national or domestic perspective to a global one.  Borders are inconsequential to crime syndicates which has impacted on the way intelligence and law enforcement approach their work.
  8. Regulators and law enforcement are moving from punishment frameworks to preventive & disruptive frameworks. As a matter of debate, Australia’s latest Mutual Evaluation Report in April 2015 noted that AUSTRAC’s compliance efforts were disruptive at best and deficient in their enforcement efforts.
  9. Law enforcement is moving from evidence gathering to intelligence & analysis.
  10. Some institutions have combined ABC, AML and fraud under the banner of financial crime.
  11. The major banks have joined forces to share fraud working group to share experiences and knowledge in the fraud environment.
  12. The next logical step should be to broaden the scope of this working group to incorporate all matters relating to AML/CTF and ABC.
  1. It is acknowledged that the single largest holding of financial information sits within the banks.  It was proposed that this financial data could be better used to conduct industry based intelligence products which can be used to inform internal risk financial crime processes.  For example, develop a number of “profiles” i.e a typical import/export business, or other cash intensive business, and their access to various financial products and analyse their transaction patterns.
  2. Transaction Monitoring Systems (TMS) traditionally focus on the unusual transactions & patterns (exception reporting), however it is now proposed the evolution of TMS should now focus on what has been historically considered usual and interrogate their databases for peer comparison and formerly usual transactions now to be considered unusual? In short, does a ‘plumbers’ financial profile at one major look the same at another major bank?  Look for the unusual in the usual.