The changing face of financial crime

Tom Hughes 14.12.2016

Financial crime has been around since the concept of money and in recent decades we've seen a dramatic change as technology has improved at an exponential rate.

Financial technology has been overwhelmingly positive, allowing for greater movement of capital and funds across the globe and improving many people's lives in the process. Unfortunately with all this good there has been some bad too. New technology provides criminals and rogue forces/states ever new ways to commit crime, launder money and finance terrorist activities. We've also seen governments using financial sanctions more to impress their distaste for regimes seen as undesirable, the burden of implementing these policies falls on financial services organisations. Regulators, struggling to keep pace with the changing landscape have pushed ever more regulatory and reporting requirements on to firms who in response have had to spend ever increasing amounts of capital and resources meeting these demands.

In the future financial crime will continue to evolve alongside technology and here in the U.K. The FCA has made it clear in its new mission statement that tackling financial crime will continue to be a core focus for them. For companies the risks of non compliance are large and the chance of being fined ever greater (1 in 5 banks has experienced enforcement action).

The challenge now facing financial services firms is to continue to meet regulatory requirements, especially as they move to a focus on principle and 'judgement framed' rules rather than a strict framework. How do you provide best practice and provide proof you have done everything within your means? Secondly some of the largest banks based in the U.K. have to deliver new capabilities on a global basis.  Ensuring consistency across the globe is challenging, especially when you have to take regional cultural differences into account.  One example of which is the use of names, it's not uncommon for people in some cultures to use multiple names and variations of first and family names.  New systems and processes have to be capable of managing all these cultural differences as well as being nimble enough to react to new challenges and threats as they occur. The final challenge is to deliver all this change and increased security whilst maintaining or improving the customer/client experience. A problem made more profound by the expectation of people to want everything immediately.

It's not all doom and gloom in the financial crime world though, there's opportunities out there for companies and several new technologies could pave the way to deliver all these new capabilities whilst reducing work load.  How and how quickly firms make the most of big data and distributed ledger technology could determine how many resources are freed up to deliver growth and get a jump on their competitors, no one expects to completely beat financial crime but there's opportunities to reduce it to the lowest possible value and 2017 could see the start of a winning campaign for companies embracing new technology.

Tom Hughes's picture
Senior Consultant


Business Analyst - Manchester
Agile Project Manager - Financial Crime Transformation - Tier-1 Global Bank based in Sheffield
Business Process Analyst - Transformation