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Tag: FINANCIAL CRIME

Hong Kong Fintech
The global financial services sector is accelerating its transformation in response to changing values and shifting consumer preferences. Hong Kong is responding in its own unique way. Global events over the last decade have brought home the reality that we are living in a fast-changing world. The economic crisis and rapid technological development are changing consumer behaviour. Millennials – with a particular distrust of traditional financial institutions and an affinity with the digital world – have adopted an entirely different set of attitudes towards financial services. The Millennial Disruption Index found that 71% of millennials would rather go to the...
FinCrime Cyber
The worlds of financial crime and cybercrime are colliding, converging into one. The biggest threat to businesses globally is the new cyber-enabled financial crime. Yet businesses and even financial institutions tasked with protecting our money continue to fight this combined threat with multiple separate defense systems and multiple separate defense teams. The situation is like a military leader trying to fight different enemies on different fronts. While those enemies remain in different fronts, it makes sense to send separate defense forces against them, each focused on fighting only the enemy assigned to it. But what if those enemies merge and...
Sanctions Mojca Ivezic
(This is a guest post by Mojca Ivezic) How would you picture those who work to prevent weapons of mass destruction (WMD) from falling into the wrong hands? Would you picture them heavily armed and with a military bearing? Then you might be surprised. Although such individuals sometimes fight the spread of WMD, the front lines feature a different type. The bulk of front-line defenders are less likely to have military backgrounds than financial ones. That’s because the most vulnerable place to identify and block those who spread WMD is through their financial dealings. So, we look at the world of sanctions violations...
Money Laundering
(This is a guest post by Mojca Ivezic) Terrorist funding detection has been practiced the same way as money laundering detection ever since Counter Terrorism Funding (CTF) initiatives were added to Anti–Money Laundering (AML) efforts after 9/11. Although the two have similarities on the surface, a deeper look reveals more differences than similarities. In fact, some have rightly called terrorist funding “money laundering in reverse” because of marked differences in its sources and goals. Do the two warrant similar treatment in detection methods? Or do their dissimilarities call for different detection approaches? How are they similar? Money laundering and terrorist financing share three similarities: 1.    They...
Money laundering
(This is a guest post by Mojca Ivezic) In what ways has financial crime hurt you? Most people would respond with a yawn. We might think it is limited to a few fraudulent schemes that deprive a small number of people of a few hundred or a few thousand dollars. While we might sympathize with victims of such schemes, we often fail to see how far-reaching financial crime is. The reality is that financial crime affects every one of us personally, as well as impacting whole economies. So, what is financial crime? What does it do to us? And what is being...
AML Mojca Ivezic
(This is a guest post by Mojca Ivezic) Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) efforts include a hidden world that few people outside the banking industry know. It’s the world of Know Your Customer (KYC) and Customer Due Diligence (CDD) compliance, and most who know about it consider it dreadfully boring. Even some of my colleagues. For all those friends and colleagues who listened, either in disbelief, or while falling asleep, to my enthusiastic explanations about why I like KYC and AML, here is why. I find it very exciting to have a small, but important role in the war against crime,...
Societal-Cost-Money-Launderin
Money laundering is a crime that many people consider irrelevant to them. If a problem at all, they consider it a problem only for banks. That is far from true. Money laundering has massive effects not only on financial institutions, but also on governments, industries, economies and all individuals. What are the effects of these widespread crimes that fly under the radar of much of the population? And why are these effects so massive? Understanding the economic cost It’s hard to pin down a dollar amount for what money laundering costs the global economy. Normal economic activity measurements can’t track funds generated...
AML CTF Value
(Updated 2016) Anti–Money Laundering (AML) and Counter Terrorism Funding (CTF) are not the most popular subjects in banking circles. Bankers often find Know Your Customer (KYC) and Customer Due Diligence (CDD) regulations confining and cumbersome. Those regulations are elaborate and strenuous, to the point where even some KYC/CDD team members consider them tedious.The value of AML and CTF, though, far outweighs its disadvantages. We see this as we look at why financial institutions sometimes choose to cut corners on compliance. And we see the consequences of doing so. Why institutions cut corners One common reason that some institutions relax their practices is...
Money Laundering Layering
One key to fighting money laundering is understanding its process and the vulnerabilities in each stage of it. In the first stage, the Placement stage, money launderers deposit their criminal revenues in financial institutions. In that stage, detection teams proficient in Know Your Customer (KYC)/Customer Due Diligence (CDD) practices for combatting money laundering do extensive investigations to detect efforts to place illicit funds in their financial institution. Unfortunately, many placements still succeed. That moves the battle that KYC/CDD teams fight to the second money laundering stage, Layering. Layering involves building a complex web of money transfers to obscure the funds’ criminal...
Money Laundering
One key to fighting money laundering is understanding its process and the vulnerabilities in each stage of it. The first stage is Placement. Placement entails depositing illicit funds into financial institutions. Several vulnerabilities lie in this stage. So, we look at it to see what questions money launderers must answer in this stage to overcome their vulnerabilities, and how detection teams skilled in Know Your Customer (KYC)/Customer Due Diligence (CDD) practices seek to exploit them. How can we deposit large amounts of money? During placement, money launderers have a sum of money of such magnitude that depositing it as a lump sum...
AML KYC CDD
Anti–Money Laundering (AML) and Counter Terrorist Funding (CTF) efforts involve the little-known world of Know Your Customer (KYC) and Customer Due Diligence (CDD) regulations. These involve an intensive review of account applications, resolute investigation to verify new customers’ information and ongoing monitoring of established customers’ transactions. Working on KYC/CDD teams is not glamorous; many outside that world would consider it tedious. Yet the work of those teams provides financial institutions with their best defense against the possibility of money laundering or terrorist funding gaining a foothold among their assets and damaging their reputations or stability. Reasons to fight money laundering and...
FinCrim Fraud Terrorism
“Financial Crimes” is a term used to describe a variety of criminal acts including money laundering; terrorism financing; bribery; corruption; sanctions violations; proliferation financing; cyber financial crime; various types of fraud (securities fraud, insider trading, market manipulation, bank fraud, insurance fraud, payments fraud, health care fraud, medical fraud, credit card fraud, cheque fraud, corporate fraud, and other types of frauds and scams); and other crimes against property. In recent years, financial crimes have become a multi-billion dollar global phenomenon with criminal methodologies adapting and changing faster than governments, legislators, enforcement agencies and businesses can keep up. The associated risks...
Money Laundering Terrorism Financing
Money laundering and terrorism funding both have devastating effects. While acts of terrorism are more noticed because of their highly public nature, Money laundering is no less of a threat. In fact, concentrated efforts to combat money laundering were pursued long before terrorist activities grew to the point where Counter Terrorism Funding (CTF) was added to formal Anti–Money Laundering (AML) efforts. To completely stop money laundering and terrorism funding is beyond our ability. For each action regulators and prevention specialists develop, criminals adopt new ways around it. An ongoing game of cat-and-mouse ensues, with each side constantly testing new ways...