6 Countries. 5 Days - Talking Financial Crime across the GCC

 “One step away from failure.”

That was the assessment David Craig, President of Financial & Risk at Thomson Reuters, gave as the status of the global fight against financial crime at Davos in late January. Alongside David Wainwright, Head of Interpol, they pointed to the statistic that:

“Only 1% of illicit funds are currently confiscated.”

The message is clear. Without a coordinated effort against financial crime and corruption, we are fighting a losing battle.

With that message ringing in my ears, alongside Jesse Spiro, Global Head of Threat Finance and Emerging Risk from the Thomson Reuters Washington DC office, I set out on a week long trip across the GCC. In 5 days, we covered 6 countries, met with 1 Embassy, 3 Central Banks, 3 Financial Intelligence Units, 1 National Anti-Terrorist Financing agency and more than 10 other regulatory bodies. 

We took part in 1 Risk Summit, presented on 3 panel discussions, conducted 4 workshops, recorded 2 video/podcasts and released 1 Financial Crime Report.

We met with representatives from the UN, the Wolfsberg Group, MENA FATF, Transparency International, the US Treasury, the IMF, multiple FI’s and FinTech’s..... and drank a possible record-breaking amount of Turkish coffee.

So what did we learn?

One thing that strikes me is just how many different stakeholders there are involved in the fight against financial crime. David Craig is right. 1% is just a step away from total failure. Disjointed efforts, unconnected research, siloed regulatory approaches, restrictions in sharing of data, skills and knowledge gaps are just some of the issues we as an industry are facing.

When you link that to the emergence of ever more complex and advanced financial crime techniques, often designed to take advantage of these very issues, it’s no wonder that the industry as a whole is facing some tough questions.

The good news

In part, what we set out to achieve last week, was to try and share some of the expert research and insight into terrorist financing and organised crime, that Jesse and his specialised research team lead in the US, with the community in the GCC.

In return, we hoped to learn some more about the detail of the challenges the regulatory community are facing here in the region. The openness with which we were welcomed with that agenda and the genuine desire from all we met to learn and share, is in itself a hugely positive sign.

When I first suggested we held the 12th MENA Regulatory Summit in Bahrain, there were quite a few people who needed some convincing it would work. That is was a gamble.

Well, if that's the case, it was a gamble that definitely paid off!

We literally had people dragging in extra chairs at the back of a packed auditorium to hear H.E. Rasheed Mohammmed Al Maroj, Governor of the Central Bank of Bahrain, deliver a refreshingly frank and open address to the audience about the historic “Failure... to comply with rules, regulations and basic business ethics…”

In my opinion, in Bahrain last week, we held our most successful and advanced MENA Risk Summit yet, based on the engagement of regulators, the community and the level of discussion. That was the start of a theme we saw throughout the week. Having spent the past five years here in the region, I feel like we are entering a new era of openness between public and private sector.

As many will know this is a subject I am very closely aligned to. The work I do with the MENA Financial Crime and Compliance Group (MENA FCCG) and other organisations is one of the more fulfilling parts of my role. Last week I was excited by the announcement about the formation of a new partnership between Thomson Reuters, Europol and the World Economic Forum in the fight against financial crime and modern slavery.

We held a private workshop on the Future of Financial Information Sharing (FFIS), where regulators, banks and consultants openly debated the challenges of sharing information between public and private sector and what can be done to redress that. We spoke with FIU’s who openly requested help finding additional training and expertise for their teams and others who talked about their increasingly strong coordination with other FIU’s; in one example even helping sponsor another GCC FIU in its attempt to gain membership to The Egmont Group.

You also can’t help but be inspired when you spend an hour and a half in the company of regional leaders like Talal AlSayegh, President of the Kuwait Financial Intelligence Unit.

Closing Thoughts

However, I close with a few words of caution. Last week represented an extremely positive step forwards with the discussions we witnessed. But of course it’s actions not words that are needed.

Whilst on one hand we are seeing the emergence of more open dialogue than ever before, on the other we are seeing ever more barriers put up in the ability to combat serious financial crime. Ongoing international tensions, both in MENA and across the world, hamper the advances in shared international efforts against organised crime and terrorist financing.

I also question whether the impact on critical financial crime and terrorist financing research has been fully assessed, with the implementation of ever stricter data privacy legislation, such as GDPR. Public, Private sector dialogue and cross information sharing is the way forwards. There are some excellent examples such as the JMLIT in the UK.

However until local efforts can be translated into a truly global approach, we remain an industry still fighting with one hand tied behind our backs.

The views expressed in this article are my own personal views and not necessarily the views of Thomson Reuters

Thank you