The Role of Compliance in Policing Financial Crime

Financial Crime refers to any kind of criminal misconduct or compliance breach related to financial services or financial markets. Some of the most common types of financial crime include money laundering, bribery, and market abuse. 

The need to prevent financial crime, especially during a pandemic, when investment professionals are working from home across an expanded and decentralized risk map, is even more important than usual. As such, the scale and repercussions of financial crime have never been greater or more serious. 

• Biggest Foreign Bribery Case: Brazillian engineering giant Odebrecht was fined US$2.6 billion in 2017 for the bribery of politicians, political parties, officials, lawyers and bankers in 12 nations. The astronomical fines show no signs of abating, with Goldman Sachs recently agreeing to pay $2 billion to the US Justice Department due to its involvement in Malaysia’s 1MDB scandal.  
• Most Significant Financial Conduct Authority (FCA) Penalty: Deutsche Bank was fined over £163 million by the FCA for failing to maintain an adequate anti-money laundering (AML) control framework between 2012-2015. 
• Largest Financial Conduct Authority (FCA) Breach of Rules Fine: Global mining group, Rio Tinto was fined approximately £27.4 million by the FCA for breaching Disclosure and Transparency Rules.

There are, of course, further repercussions of committing financial crime, including negative press coverage and irreparable brand damage.

Regulators of Financial Crime

There are numerous regulatory authorities in different jurisdictions throughout the world – each with their own distinct set of rules. Ensuring compliance with this “patchwork of divergent regulations” costs businesses an estimated $78 million annually. Below is a selection of some of the world’s most well-known and active financial regulatory bodies:

Complexity of Financial Crime

Due to the sheer number of different financial regulators, and the dozens of languages, apps and communication streams that investment professionals now use, financial crime compliance can be a complicated undertaking, and it’s getting even more complex. Aggregating and analyzing the thousands of emails, chat messages, and hours of phone calls that each investment professional is making per month, can cause a backlog of alerts that compliance teams struggle to address, without technological assistance. The indefinite work-from-home conditions, where employees are working in more casual, isolated environments, further threatens the integrity, accuracy and speed of regulatory compliance efforts. 

How Can Financial Crime Be Prevented

If you want to address financial crime before the fines, before the media scandals and before the brand damage, then it’s imperative for you to have a financial compliance program in place in order to ensure key regulatory objectives are met, investors are protected, and markets are kept fair, efficient and transparent. By having an effective financial crime compliance system in place, you can deter and protect against financial crime by taking a preventative, rather than reactive approach.

How Technology Can be Used to Tackle Financial Crime

Compliance monitoring solutions, such as Behavox Compliance enables enterprises to bring more visibility to their internal data; catching bad actors — before it’s too late, and even, in some cases, preventing financial crime before it takes place. Through a combination of advanced data analytics and artificial intelligence, Behavox Compliance triggers alerts of suspicious employee communications and behavior. The AI-powered solution boasts the best global detection rate of true positives in the industry, with up to three times more escalations compared to competitors, and a 90% reduction in false positives compared to legacy solutions.

Through reducing the number of false positives, compliance officers can save up to 5 hours per day, thereby increasing the effectiveness of the average compliance team by more than 60%.

Catch Financial Crime Quickly and Accurately

Using Behavox Compliance gives financial institutions access to Behavox’s 80+ proprietary scenarios (including specific money laundering, bribery, and market abuse scenarios) to identify potential examples of financial crime. Built for the most demanding business environments on the planet, Behavox Compliance can aggregate an organization’s global communications across more than 150 data types pertaining to dozens of voice and text applications in 10 languages and counting, including English, French, Japanese, Spanish and many more.