Combating Financial Crime 2050 – Part 1

Through the looking glass: Combating financial crime in 2050

Fifty years down the millennium the financial crime landscape is going to be extremely challenging. In the futuristic 2050, a connected world powered by IoT, digital currencies like Bit coins, AI and Analytics will completely overhaul banking solutions. Experts are unanimous about compliance and regulatory pressures forcing banks to go digital and focus on niche deliveries. Fin-tech companies will evolve to deliver several banking solutions that will be vacated by big players.

With banking services leading the fourth industrial revolution, criminals are moving up the sophistication scale. The Bonnie and Clyde bank robberies are passé and criminals across the board are unleashing digital weapons for mass embezzlement.

Fin-Crime going digital

Internet is the current playing field for a large majority of savvy and rookie criminals. The obliteration of geographical boundaries, pervasive anonymity and huge takings are spurring criminals as never before. The traditional 4-1- 9 fraud or the Salami techniques would continue to prevail but sophisticated Moriarty syndicates will emerge as the future of financial crimes. These new Fin-Mafia will bring in new level of sophistication in fraud, money laundering or cybercrimes with perpetrators silently striking across borders with impunity through multiple of beachheads.

But the good guys are also not idle. Banks, financial institutions and technology companies are bringing in new levels of innovation to identify and nullify criminal acts. These ranges from regulatory compliance, addressing insider and people challenges, embracing data analytics to the ultimate holy
grail of artificial intelligence.

Unified view of organizational risk

Banks will benefit by integrating transaction monitoring with wide spectrum of cybercrime, AML disciplines. The myriad financial malfeasance including money laundering, terrorist financing, fraud, cyber-attacks and many others are handled in siloes which makes it difficult to pin point criminal originations. For example, if there is a breach of privacy or online theft of data then AML functionalities can provide data about flagged financial transactions, surge in online purchases, wire transfers, huge ATM withdrawals and so on. The heightened transaction scrutiny can identify suspicious activity across multiple transactions thus effectively stymieing the crooks.

It is imperative that various teams tasked with crime fighting functions are integrated to enable a compete unified view of transactions. Collaboration and disintermediation is important to plug the security gaps, reduce redundancies, streamline processes and build strong systems to combat criminals. There is a need to create an organizational structure where employees and stakeholders are trained continuously to embrace compliance and security. It can go a long way is tackling emerging threats.