We have just reached the 1 year anniversary since the beginning of the Covid-19 pandemic in the UK. 1 year of not being able to see our friends and family, 1 year of lockdowns and restrictions, and a whole 365 days of working from home. The last year has been one that we could never have imagined. It has been challenging for many, and the start of a new opportunity for others.
Working from home means we currently live, breathe and sleep at our jobs. Having this disconnect from our daily corporate way of life has forced us all to adapt, in many ways for the better. But today we look at what changes it has brought to the Financial Crime Compliance industry as a whole and how it has shaped a new landscape. Has the coronavirus pandemic created the perfect breeding ground for financial criminals and opportunists?
We speak with Munir Merchant, CEO and Founder of Contineo FRS to get his thoughts.
What has been the impact of Covid-19 on the Financial Crime Compliance (FCC) sector in your view?
Major parts of the financial crime activity chain for money laundering, terrorism financing and sanctions circumvention already occurs within the digital economy, as we already know. The pandemic has unfortunately not hampered the ability of criminals and organised groups to continue with their illicit activities and schemes via electronic channels. In fact, we have learned from our clients and partners that they have seen a higher than normal rate of detection throughout 2020 when it comes to financial crime activity. Also, we have learned that regulators worldwide have continued to expect the highest standards from regulated organisations when it comes to FCC controls.
In terms of impact, what we are seeing is organisations that have little or no FCC controls in place are increasingly being scrutinised by regulatory authorities, as they are vulnerable to being exploited by organised groups. These are mainly non-banking organisations in sectors such as crypto currencies, gaming & gambling, high risk corporates, and payments. And banking organisations, that largely have such controls already in place, are focussing on validating their effectiveness and efficiency based on new financial crime typologies that we have seen over the past year to make sure they are not vulnerable.
In summary financial crime activity has increased and it’s spread to broader non-banking segments of the economy has been accelerated by the pandemic.
Do you think that due to the pandemic there will be any change in the way we fight financial crime?
The role of technology, in harnessing data to enhance detection capability and automate decision making in an explainable manner, has become a big focus area. A lot has been said about this over the past few years, but in 2020 a lot of organisations have thought this through in detail and understood the benefits across a number of use cases. Take the use case of real time transaction screening for example, where there are massive efficiencies that can be introduced by means of leveraging data that organisations already have available.
I think that the pandemic has caused such approaches to be considered more seriously as the way forward, and I believe that this will become the way forward.
How has Covid-19 affected your organisation and how have you had to adapt?
We all know the adverse impacts that the lockdown has had on everyone’s mental health, stress & anxiety levels. And much like the case everywhere, our workforce has also been impacted in such a way. But we were quick to act upon this and since March last year we have been, and continue to be, as flexible as we can be to ensure that our team members have a healthy work life balance, especially those with young families. We make sure we regularly speak with each individual to understand the help and support they need, and ensure that we do all we can to support them.
As an employer we have a moral duty of care to all our staff, and throughout 2021 as we hopefully move back to some form of normality, we will continue putting the wellbeing of our teams worldwide as the first priority.
Crisis and chaos are the perfect storm for financial criminals to target weaknesses and exploit vulnerabilities. This means that banks and financial institutions (FIs) need to ensure that their systems are robust and their security is constantly monitored. Compromises to internal platforms can be critical.
At Contineo FRS, we specialise in protecting banks and FIs by using ground breaking technologies and methodologies to fight against financial crime in an ever growing digital world. Our team has extensive knowledge across money laundering, terrorism financing and sanctions. Request a brochure and get in touch to find out how we can help your organisation.