Financial Crime (FinCrime) is simply a crime that involves taking money or property that belongs to someone else for financial gain. FinCrime is a multi-trillion pound business for criminal organisations, with an estimated 2-5% of global GDP representing illicit funds, laundered through global financial networks.
Fraudsters have been committing financial crime since even the bronze age with dishonest weights and measures meant to defraud trade customers. We now find ourselves in the information age, FinCrime is not only more common, but more complex and harder to tackle. Modern FinCrime happening across the world today includes fraud, misconduct, handling the proceeds of crime and the financing of terrorist activities.
The global economy, cryptocurrencies, and the prevalence of digital technology in financial transactions have bred a new generation of money launderers and identity thieves who are eager to commit financial crime. Never before has it been so critical for financial institutions to carry out rigorous customer due diligence.
Common FinCrime Trends
There are new and common fraud techniques being played out in the financial markets. These gambits make KYC (Know Your Customer) measures more imperative than ever.
Two particularly common offences being carried out by fraudsters include Company Owner Impersonation and Money Laundering.
By fraudulently claiming to be the owner of a company, Company Owner Impersonation culprits aim to set up business banking accounts, merchant sites and payment platforms. Fraudsters may ultimately be planning to apply for government funds or grants through the fraudulent company ownership ruse. The ability to verify a genuine connection quickly and efficiently to the business in question is crucial in KYC processes.
An increase in fraud paired with increasing drug trafficking means billions of pounds of criminal proceeds are subject to Money Laundering every year. The emphasis on financial institutions for detecting, monitoring and reporting suspicious activity is greater than ever.
Some of the most damaging financial crime horror stories are represented visually here via Market Watch.
Your Role in Tackling FinCrime
UK FCA regulated businesses need to demonstrate they have carried out adequate customer due diligence. Failure to do so can result in fines, reputational damage and, in extreme cases, prosecution.
The regulatory requirements for Anti Money Laundering (AML) compliance are constantly evolving. AML checks should include an array of procedures including KYC to help prevent and detect financial crime early.
Managing this compliance risk means taking steps to be sure you know who you’re dealing with. Getting this process wrong can cause delays, inconvenience and a negative customer experience.
DQ Global & Experian Join Forces
Experian is a leading global information services company which plays a key part in helping financial institutions comply with legislation through its data-led solutions. Experian and DQ Global have now joined forces to enable you to easily identify, assess and mitigate FinCrime.
The soon to be launched DQ Compliance Solutions will allow you to collect high-quality data to provide a robust view of businesses, what they do, and the people behind them to better understand the compliance risk enabling you to “Know Your Customer”.
Without the need for complex integrations and high set-up costs, Experian’s FinCrime data can now be easily surfaced within your data ecosystem.