The fight against financial crime is not a ‘compliance issue’, but a potential challenge to the economic stability of a whole region. How can collaboration between the public and private sectors help the fight become efficient?
- The 2020 Nordic and Baltic Regional Information-Sharing Symposium in Riga, Latvia, highlighted how the fight against financial crime is a potential challenge to the economic stability of a whole region.
- The symposium’s Financial Intelligence Unit-led Information Sharing Platform hosted 107 meetings in 2019, just a few months after being born.
- The symposium showed that greater collaboration between the public and private sectors is essential for the fight against financial crime to become efficient.
Nowhere was the fight against financial crime highlighted as a potential challenge to the economic stability of a whole region more than in Riga (Latvia) last month at the 2020 Nordic and Baltic Regional Information-Sharing Symposium hosted by The Future of Financial Intelligence Sharing (FFIS), which gathered representatives from Financial Intelligence Units (FIUs), supervisors, banking, civil society and law enforcement.
Impact of a financial crime scandal
With ABLV, Latvia has had to live through the impact that a major money laundering scandal can have in the economy of a country and a region. At the Symposium, speakers talked of the “credibility of the country”, “national security”, “international prestige and reputation” and the message was clear as the government was represented by the Minister of Foreign Affairs.
Public & Private Sector Collaboration
Collaboration between the public and private sectors is essential for the fight against financial crime to become efficient. The Symposium showed that Latvia recognizes this and is doing an immense amount of work in that direction: their FIU-led Information Sharing Platform hosted 107 meetings in 2019, just a few months after being born. There was a general agreement among participants on the importance of these initiatives and the focus now is on making them “effective”. So how can this be achieved?
Greater collaboration and innovative tools are helping to #FightFinancialCrime in Africa. What percentage of respondents in sub-Saharan Africa to a recent #Refinitiv report do you think were victims of financial crime in 2018? Read more here: https://t.co/bQ81JC0PjM
— Refinitiv (@Refinitiv) October 2, 2019
- FIU initiatives require a clear legislative framework in place in the country, setting up limits for what they can and cannot do. Greater clarity is needed in particular in regards to the clash between data protection and money laundering regulation.
- Strong leadership, particularly to set them up and get to a certain stage of maturity
- Trust is critical to make them successful and they themselves contribute to the generation of trust between the key players in the fight against financial crime
- Focus collaboration on matters that will have an impact. Crime typologies is an example suggested by most initiatives.
- Regular feedback to the private sector on the information it sends to the FIUs, so that they can refine that information and focus on what makes a difference.
- These have been very manual initiatives but it is clear that for them to move to the next level, they will have to embrace technology and analytical capabilities.
- To truly make the system safer, collaboration across sectors must happen across borders. What’s the point, raised some of the speakers, to reject doing business with a potential client if they will easily get that service in another jurisdiction?
- Importance of engaging non-financial sectors, particularly Designated Non-Financial Businesses and Professions (DNFBPs). Professional like lawyers and accountants have an important role to play in the fight against financial crime, but how could you “effectively” engage those sectors?
— Refinitiv (@Refinitiv) January 24, 2020
Stopping Financial Crime
Much progress remains to be made for the system to become truly effective in stopping financial crime and it´s true costs on the lives of citizens and institutions, but it is refreshing to see the passion, increasing trust and collaboration between the different actors that can truly have an impact.