Financial crime has become one of the most significant risks faced by financial institutions and global economies. It is becoming increasingly sophisticated with the use of new and emerging technologies to exploit financial systems, and the role of financial institutions has become vital to preventing, detecting, and deterring the criminal activity.
Regulators and financial institutions are under immense pressure to move away from ‘tick-box’ compliance by innovating and promoting a culture of compliance to better protect our communities.
Fighting Financial Crime – A Paradigm Shift brings together the views of 16 global thought leaders with passion and experience in the topic from across professional spectrum to understand why the fight against financial crime matters, gauge the current climate, and identify shifts or changes in the future of financial crime required to move forward with purpose.
What are global financial crime experts anticipating?
The paradigm shift
Global financial crime experts are foreseeing a fundamental shift in how organisations approach compliance over the next decade, as the criminal threat becomes more challenging and complex, with six major trends influencing financial crime compliance over the next 5 – 10 years:
Financial crime compliance to be purpose-led
Drive effective outcomes by being purpose-led – disrupting criminal activity for the good of the organisation, customers, and our community.
“To make progress we need to come back to why we do this. This is not just about financial integrity – it is about reducing the harm caused by crime and terrorism. Full stop.”
David Lewis
Former Executive Secretary
Financial Action Task Force (FATF)
Effectiveness rather than tick box compliance
Define what success looks like, with flexibility to focus on agreed threats under a risk-based approach.
Deeper public-private partnerships
Deliver greater results and disruption of criminals through strategic data sharing using PPS.
“The explosion of public-private partnerships and working together to analyse different sources of information will be the key to future progress in combatting financial crime. If we pull together, we can achieve more."
John Moss
Deputy CEO Intelligence
AUSTRAC
New ways to Know Your Customer
KYC and CDD remain a core pillar, with shifts towards perpetual-KYC and data-driven real time monitoring.
Next-generation financial crime detection systems
Deployment of machine learning and artificial intelligence for complex decision making.
Data and tech to underpin financial crime compliance
Complete, accurate and timely data, with integrated technology solutions supported by a clear strategy.
“Everything to do with AML is about data, but the data is useless without the technology to use it."
Alexon Bell
Chief Product Officer
Quantexa
Fighting financial crime
A call to action
The coming paradigm shift will require large-scale transformation and commitment across the industry.
This evolution must begin now.
Our research has identified 6 steps that organisations can take to better combat financial crime:
Fix, remediate, but don’t lose focus on strategy
Define a target state operating model that enables teams to act tactically while thinking strategically.
“We need to step back and re-imagine our compliance program, because fixing broken things with tape will inevitably fail.”
Sarah Runge
Director, Global Payments - Regulatory
Facebook
Move to perpetual KYC
Digitise the KYC process to improve data quality, enhance compliance, and improve outcomes.
Innovate customer monitoring
Augment rules-based engines with intelligence-led analytics tools that target complex and intelligent scenarios.
Fix your data today
Data aggregation can accelerate effective financial crime systems but know that data does not have to be perfect.
“Your data does not have to be perfect to solve the problem of financial crime.”
Jennifer Shasky Calvery
Group Head of Financial Crime
HSBC
Align transformation to a strategic plan
Transformation is a continuous journey and should not be locked into a fixed timeframe.
“Banks are realising that they need a program that can mature and evolve over time to keep up with criminal trends”
Peter Soros
Deputy CEO Regulation, Education and Policy
AUSTRAC
Empower financial crime operations
Financial crime operations teams are key to improving effectiveness and efficiency.
How KPMG can help
KPMG’s Financial Crime transformation team has the expertise and tools to set you up for success:
- Develop strategic roadmaps based on key pillars and design principles that document the journey from remediation to transformation, that is unique to you and your business.
- Implement our global perpetual KYC solution, developed internally in partnership with Quantexa, to help you transition to enhanced KYC.
- Develop and execute a technology strategy and operating model that supports the utilisation and development of existing and future data.
- Our expertise on the right tools, technology, strategy, analytics and data to help you move to innovative customer monitoring.
- Global better practice insights and intelligence to help you shift the mindset towards transformation and innovation.
- Support with optimising and digitising Financial Crime Operations to empower your people.
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