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Digitalization and the fight against financial crime

James Mirfin
James Mirfin
Global Head of Digital Identity and Financial Crime Propositions

Digitalization is transforming the fight against financial crime, with new technologies helping legitimate industry players to root out corruption but also creating opportunities for criminals to exploit. In the first of a five-part series, we assess this landscape and highlight the value of tools such as digital ID.


  1. Digitalization offers enormous advantages in the global fight against financial crime, although sophisticated technology also presents new opportunities to criminals.
  2. Moving away from traditional paper-based identity verification to embrace digital equivalents transcends geographies and enhances both speed and efficiency.
  3. Refinitiv is helping customers to #FightFinancialCrime, including through the award-winning World-Check and with forthcoming solutions to establish robust digital identities.

The disruptive power of digitalization has turned the financial services industry on its head.

AI and machine learning capabilities are key drivers behind this rampant digitalization and as the fintech revolution continues apace, nimble entrants into the financial sector are offering increasingly customer-centric, digital experiences.

Technology has thrown the doors wide open to allow small start-ups the opportunity to challenge incumbents, with the latter often finding that they must rethink traditional, paper-based processes and embrace the digital age.

Watch: Refinitiv Know Your Customer (KYC) innovation video

Sean Durkin, Head of Data Science at Barclays, comments that AI-related machine-learning technologies are “going to offer a level of scrutiny and scale never before seen, and really cut to the chase with regard to efficient and scientific decision-making”.

Durkin also offers some insight into how the bank is embracing technology.

He says: “Among the work the bank is doing these days, it is actively engaged in the use of machine learning technologies such as neural networks to assist in a variety of operations, from customer service to fraud detection and prevention.”

The fight against financial crime

Digitalization offers enormous advantages in the global fight against financial crime, but of course, there is a caveat: digitalization offers equal opportunities to both financial criminals and legitimate industry players.

Patricia Moreira, managing director of the International Secretariat of Transparency International, a global leader in the fight against corruption, also highlights this concern.

She says: “There are a number of examples worldwide where we can really see technology contributing to the development of the fight against corruption. But because we’re talking about corruption, I need to make a comment on the other side.”

Moreira is generally in favor of technology and the benefits it brings, but comments that “it also has a dark side”.

Expert Talks commissioned by Refinitiv. Digitalization and the fight against financial crime

This view is echoed by Stacey Nash, Head of Enterprise Financial Crime for the United States Automobile Association (USAA), an organization focused on serving the needs of active and retired U.S. military members and their families.

Nash cautions that, while developments in the fintech space, including mobile banking and investing, make life easier for us, they also offer capabilities to financial criminals: “The people who are perpetuating (financial) crimes aren’t going to go and get honest jobs.

“They’re going to constantly try and figure out how to commit crime. We have to be just as vigilant in our forward thinking, as far as building the capabilities to protect consumers”.

The message is clear: not only should industry players invest in digital capabilities for the benefits on offer, but they should also embrace the digital era to ensure that they do not become the weakest link and the target of financial criminals.

Quantifying fraudulent activity

Emile van der Does de Willebois, the World Bank’s Global Lead for Financial Markets Integrity & Asset Recovery, suggests that quantifying the scale of fraudulent activity is all but impossible.

He says: “If you see how much illicit money flows annually in the financial system (by the smallest estimate it’s in the US$20 billion range, but many estimate that it’s much, much more than that) and see that only a fraction of a fraction of that amount is being recouped.”

Nash also comments on the issue of scale, revealing that the USAA “blocks more than nine million cyberattacks and prevents on average $8.7 million in fraud losses a day”.

Fraud and corruption remain pervasive and organizations should embrace technology and fight back.

1% of criminal proceeds generated in the EU are confiscated by authorities. Digitalization and the fight against financial crime

Read our 2019 report on innovation and the fight against financial crime.

Advantages of digital identity

Essentially, compliance teams need to harness the power of digitalization and invest in the right tools to work smarter and achieve more within the confines of often scarce resources, effectively honing these resources.

Dr. Eugene Soltes — author of “Why They Do It: Inside the Mind of the White Collar Criminal” —agrees: “Ultimately, I think the challenge with most compliance and misconduct issues is because they are a needle in the haystack. The question is effectively honing your resources to find them.”

Many forward-thinking financial institutions are actively investigating innovative ways to achieve this. One of these ways is through the use of digital identity in order to boost their agility and responsiveness to the demands of tech-savvy customers.

Moving away from traditional paper-based identity verification to embrace digital equivalents transcends geographies and enhances both speed and efficiency. This in turn boosts productivity and means that potential financial crime-related risk can be detected with greater accuracy.

For example, a secure digital identity can be used by banks to seamlessly verify and prove the identity of new customers or to authenticate existing customers seeking to make changes to their personal information online or through call centers.

As customers deploy digital products, services and capabilities, Refinitiv offers market-leading solutions to help them fight financial crime including our multi award-winning World-Check One — also available as an API — and upcoming solutions and tools to help establish and verify digital identities.

James Mirfin Quote. Digitalization and the fight against financial crime

Power of collaboration

At a macro level, collaboration remains a key tool for digitalization and the fight against financial crime.

Nash agrees: “When I think about the areas of banking that I’ve been in over the last 20 years, fraud is one area where competitors will come together to share best practice and leverage strengths because we are fighting the same criminals.”

Refinitiv Qual-ID Digital Identity Verification