With terrorist attacks on the rise, any legislation that creates a more hostile environment for the funding behind them must be welcomed.
The problem is, however much due diligence and additional risk assessment the new legislation introduces, it cannot be relied on to solve illicit money flows once and for all.
The level of sophistication that today’s terrorists and criminal organisations use to launder their money is frightening, and while the new legislation is a step in the right direction strategically, operationally the average company or financial institution is light years behind the techniques being employed by terrorist networks.
The transactional ecosystems within which criminals and terrorists hide their funds are so complex and vast that, manually, they can be near impossible to identify. The flow of illicit funds is often hidden in plain sight.
Red flags and all-important anomalies can often only be identified through the analysis of billions of financial transactions and broader datasets in real time.
This is beyond the limits of human intelligence, let alone conventional compliance, and can only be achieved through big data technologies that are enhanced by machine learning.
Effective anti-money laundering (AML) and combating the financing of terrorism (CFT) require not just tougher legislation but big data and machine learning-powered tools that can identify transactional patterns a human would never spot.
While lowering the cash payment threshold above which customer identification is required could be a deterrent for some criminals, without the ability to analyse and integrate billions of data points from multiple sources to detect criminal behaviours, this could result in an increased burden of false positives.
False positives are the results of investigations on perfectly legitimate customers, accounts or transactions that seem criminal but which, after a huge amount of time and money spent investigating them, prove to be perfectly innocent. They are the single biggest obstacle in the financial fight against terror.
The UK’s Prompt Payment Code will have a significant impact on the relationship between large businesses and their suppliers. What does the Code mean for your business? And how can you navigate this change effectively?
When it comes to the relationship between Europe and Britain – uniformity isn’t a word that currently springs to mind. And that’s not just a reference to Brexit. Whilst the Europe and Britain do find themselves in the midst of a political break-up – their monetary policies are also showing signs of divergence.
Europe’s introduction of the General Data Protection Regulation (GDPR) next May will have implications for businesses around the world and US corporates should start getting ready if they haven’t already done so.
The recent NotPetya cyberattack underlined the need for organisations to address their exposure and how to mitigate the risk.