With evolving financial crime threats and heightened regulatory scrutiny, firms are reassessing their approach to financial crime risk management and compliance, and are paying a heavy financial cost, collectively spending billions trying to prevent financial crime. And so, maturing and embedding a robust FinCrime operating model to meet regulators expectation, without adding cost, is becoming critical to driving strong regulatory outcomes.

In this context, our Risk Consulting team are sharing with you our view of a ‘Paradigm Shift’ in the approach to Financial Crime. Based on interviews with 16 global thought leaders, from industry, government, RegTech, law enforcement, consulting, and academia we consider where the journey in combatting financial crime will lead, and the paradigm shift needed to get there; we identify 6 major trends that we anticipate will shift the paradigm of disrupting financial crime compliance over the next 5 – 10 years, followed by 6 practical calls to action that organisations can take to better combat financial crime, innovating with data and technology to manage costs while meeting regulatory expectations.`

What are financial crime experts anticipating?

Six major trends that we anticipate will shift the paradigm of disrupting financial crime compliance:

The paradigm shift

01
Financial crime compliance will be purpose-led
Drive effective outcomes by being purpose-led – disrupting criminal activity for the good of the organisation, customers, and our community
02
EFFECTIVENESS RATHER THAN TICK BOX COMPLIANCE
Define what success looks like, with flexibility to focus on agreed threats under a risk-based approach.
03
Deeper public-private partnerships
Deliver greater results and disruption of criminals through strategic data sharing using PPS
04
New ways to know your customer
KYC and CDD remain a core pillar, with shifts towards perpetual- KYC and data-driven real time monitoring
05
Next-generation financial crime detection systems
Deployment of machine learning and artificial intelligence for complex decision making.
06
DATA AND TECHNOLOGY WILL UNDERPIN THE FINANCIAL CRIME COMPLIANCE EVOLUTION
Complete, accurate and timely data, with integrated technology solutions supported by a clear strategy

Fighting Financial Crime

In many organisations the expected paradigm shift will require large-scale transformation and commitment, smaller organisations can also leverage the shift away from “tick box” compliance and drive a proportionate risk focused model. This evolution must begin now. Our research has identified six practical steps that organisations can take to better combat financial crime:

Call to action

01
Fix, remediate, but DON’T LOSE FOCUS ON THE STRATEGIC
Define a target state operating model that enables teams to act tactically while thinking strategically
02
Move to perpectual KYC
Digitise the KYC process to improve data quality, enhance compliance, and improve outcomes.
03
INNOVATE CUSTOMER MONITORING, STARTING WITH COMPLEX ML/TF
Augment rules-based engines with intelligence-led analytics tools that target complex and intelligent scenarios.
04
FIX YOUR DATA TODAY, BUT DON’T WAIT FOR IT TO BE PERFECT
Data aggregation can accelerate effective financial crime systems but know that data does not have to be perfect.
05
ALIGN TRANSFORMATION TO A STRATEGIC PLAN AND CONTINUE TO INNOVATE
Transformation is a continuous journey and should not be locked into a fixed timeframe.
06
EMPOWER FINANCIAL CRIME OPERATIONS
Financial crime operations teams are key to improving effectiveness and efficiency.

How KPMG can help

  • 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.
  • Explore our global perpetual KYC solution 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.
  • Advise 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.

Contact our team

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