Financial Crime, Fraud, AML, CTF Articles

Why Financial Crime and Cybersecurity Need to Team up

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 launch joint attacks? A smart military leader would merge his forces against the joint attacks. That’s not happening in financial institutions,...

Financial Institutions: Key in Fighting Weapons of Mass Destruction

Sanctions 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 and proliferation financing to see how those who traffic in such dangerous commerce are identified and thwarted. Understanding the terms Two key terms fill discussions of the fight...

Combatting Money Laundering & Terrorist Financing

Money Laundering
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 involve a source of money or objects that have monetary value. 2.    They involve moving the money through channels that conceal the original source. 3.    This money movement and concealment...

Financial Crime, Money Laundering and Terrorism Financing

Money laundering
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 done to fight it? What is financial crime? The term “financial crime” is an umbrella term covering a broad range of crimes rather than a specific act. Almost...

Why I Love Working in Financial Crime / Anti-Money Laundering

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, fraud, corruption and terrorism. Fighting against those illegal efforts does not always entail the epic gun battles presented in movies....

Societal Costs of Money Laundering

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 by activities that go to great lengths to remain hidden from public awareness. That hasn’t stopped organizations that fight these crimes,...

Value of Anti-Money Laundering & Counter-Terrorism Financing

(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 bad economic conditions. Banks struggling to stay afloat when funds from legitimate sources decrease may start accepting questionable transactions. This...

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