Learnings from the first gathering of the Global Coalition to Fight Financial Crime

Over the last 2 days, I had the privilege of attending in beautiful (but rainy) Stockholm the first gathering of the Global Coalition to Fight Financial Crime (GCFFC) around the theme of ? Accelerating collaboration ?. And this was a fantastic event. Not only because of the variety of subjects discussed: on top of the traditional AML/CFT and sanctions topics, we also went through human trafficking, wildlife protection, scams, trade-based compliance, the use of virtual assets by mercenaries, technology , privacy and much more.

But it was also great because of the stellar line-up of speakers and attendees, from the inspiring new FATF president Elisa de Anda Adrazo, to other FATF and Egmont Group representatives, members of the civil society, FIUs and regulators , law enforcement members but also, obviously, obliged entities.

The discussions were engaging, sometimes daunting but also driven by passion and enthusiasm. We all ended the sessions fully energised.

So, what will be some of my learning points?

1 - it is clear that despite many millions that are currently spent to fight financial crime , the trend is not positive and the whole system requires a fundamental re-thinking if we want to go head-to-head with the bad guys….

2 - Those same bad guys usually work as one unit on transnational basis, sometimes with advanced technology, not being hampered by local regulatory or boundaries considerations. On the opposite, despite the great motivation demonstrated by the financial crime fighters community, we are facing some hurdles:

• we need to improve the communication and continue breaking the silos between the members of our ecosystem (obliged entities, FIUs, regulators, civil society, law enforcement etc) to all align on shared objectives to ultimately increase the effectiveness of the financial crime fighting community: do we want to prevent the financial system being used for illicit purpose, do we want to increase the number of prosecutions or assets seized or do we want to reduce the harm that is done to the society at large, and in particular the least protected amongst us…?
• we need to facilitate the exchange of information between stakeholders through PPPs (public private partnerships) but also PPPs(private private partnerships). The more data we can pool the most effective our defences will be. Yes there are privacy requirements to appropriately consider, but financial crime and privacy imperatives can match if none of them is driven by dogmatism. Privacy by design and financial crime by design should be both achievable.
• we need to be more agile in using cutting-edge technology to increase the quality of our insights as a community, going towards a utility vision by which obliged entities will gather their knowledge and capabilities to build IT solutions that will ultimately benefit to a greater number.

3 - We (regulators and obliged entities alike) need to shift from a purely technical compliance approach that is indeed easier to demonstrate but less powerful, to enrich it to a purpose-built compliance where resources will be allocated to the priorities that really matter, and where regulators will be looking at those entities that are playing the game as partners and not only to catch them if they did not capture this bad client or this inappropriate transaction.

4 - Last but not least, resources.

On the FIUs side it is certainly important to recognise that if we want them to adequately contribute to this great but complex cause they need appropriate staffing and IT capabilities. They are a key part of the chain and the whole system cannot work if they can’t properly contribute. The proper recognition by politicians of the importance of the fight against financial crime is a directly related subject.

The challenge is different for the obliged entities. It is less so a question of quantity of staff than it is one of skills availability and building. Our job becomes more and more complex and requires skills you don’t receive during studies, or at least not in an articulated manner to fight financial crime. Investing as a community in training or certification programs to develop the next gen of financial crime fighters is key for the sustainability of the whole system.

If not done yet, I encourage you to keep an eye on this website that already contains some interesting resources on the above subjects: https://www.gcffc.org

There is much more that could be said but I wanted to share this with you, hoping that it either creates reflections here on Linked In or within your respective institutions.

We are at turning point and just to give some stats about what we are doing that, I have extracted the following from the material we received during the conference: money laundering is estimated between 2-5% of the global GDP ($90B to 1,5trillion) but less than 1% (0,2%?) of the proceeds of crime laundered via the financial system is seized; the global illicit drug market was estimated at $300 billion of proceeds globally whilst $120 billion is lost to corruption every year; 100.000 organised related crimes took place in 2021; 40 million people suffer from drug use disorders… And there are many more stats available to demonstrate that our ?? raison d’être ? is clear . We must keep up the fight but under improved conditions and ways of working.

Finally, a word of thanks to John Cusack and Che Sidanius for having invited me and for the fantastic two days.