Effective collaboration key to fight against financial crime

With criminals showing growing ambition and sophistication—often aided by developments in technology or the increasing complexity of the financial system itself—the challenge confronting anti-financial crime professionals is significant. However, through cooperation between the private sector, law enforcement, and regulators and the pooling of resources, knowhow, data, and analytics capabilities, clear opportunities to scale up the efficiency and effectiveness of anti-financial crime efforts are emerging.

From a practitioner perspective, such initiatives offer considerable scope to advance best practice and knowledge across the compliance profession.

Stronger together

Public-private partnerships are far from straightforward, often being hindered by data sharing issues or broader technological, commercial, or logistical factors.

The Fintel Alliance—a successful partnership involving anti-money laundering regulator AUSTRAC; Western Australia Police; and analysts from banks including Westpac, National Australia Bank, Commonwealth Bank of Australia, and Australia and New Zealand Banking Group (ANZ)—provides an example of how such challenges can be addressed in practice and the positive outcomes of collaboration.

One area in which the alliance works together is in identifying and disrupting organized crime syndicates using ATMs to launder the proceeds of crime. ANZ’s financial crime team created an algorithm to center on the ATM, effectively regarding the deposit machine as the “customer” and enabling the bank to observe instances where suspicious transactions were being made on behalf of several different customer accounts.

Although historically financial institutions investigate anomalous activity at the account or customer level, this algorithm was able to “connect the dots” and determine the sum deposit value from the overall activity, with other tools, such as CCTV, providing more details about the depositing party.

The bank presented its findings to the Fintel Alliance and disseminated the business rules for the creation of “clusters” of potential interest. The participating banking members of the alliance then held a “week of action” to share close-to-real-time bank data, which identified targets for investigation. This intelligence was disseminated to Western Australia Police, supporting a live law enforcement investigation. The probe, codenamed “Operation Saintly,” resulted in the seizure of cash; vehicles; firearms and ammunition; encrypted communication devices; and commercial quantities of cocaine, MDMA, methamphetamine, and cannabis.

Following the success of the operation, the Fintel Alliance supported law enforcement in the investigation of “Operation Taipan,” focused on one of the largest alleged money laundering syndicates in Australian history. Again, the positive outcomes were significant, including the seizure of millions of Australian dollars in cash, four luxury cars, jewelry, and illicit tobacco.

As of May, the partnership has led to 13 arrests.

The International Compliance Association is a sister company to Compliance Week. Both organizations are under the umbrella of Wilmington plc.