The Real-World Impact of Financial Crime

Written By Monica M

Investigating financial crime is a complex task that resembles solving a puzzle with missing pieces. Following the money trail can be complex and time-consuming. The continually evolving nature of financial crime, regarding how illicit fund flows change and the unusual activity trends identified in the industry, requires considerable effort to stay abreast of. The level of creativity seen in how bad actors move funds means that we must consistently keep up with what they are up to.

As an industry, we have made significant technological advances in detecting financial crime. Data analytics, artificial intelligence, and machine learning are used to monitor transactions, detect suspicious activity, and automate certain compliance functions. The training and knowledge sharing available in the industry has significantly increased compared to ten years ago, along with the level of cross-collaboration that occurs across the public and private sectors in the fight against financial crime.

The Challenge

Although progress has been made, there is still more to be done. 

  • Bad actors continue to access and compromise the integrity of the financial system

  • Human crime continues to increase, with no one safe from being a target.

  • Law enforcement and prosecutors are not getting more resources to keep up with bad actors.

Working on financial crime investigations long enough can lead to: 

  • Focusing more on investigation mechanics

  • Detaching from real-world impacts

  • Getting accustomed to prosecution challenges

  • Accepting the status quo without challenge

These outcomes arise due to a lack of resources: people, data, tools, and time.

Private Sector vs. Public Sector

A significant challenge in our industry is comprehending the processes involved in reporting suspicious activity and how that information is used once the SAR has been submitted to FinCEN. The nuances of the processes that lead up to the reporting of a SAR, and what information from the SAR law enforcement looks for, can be a mystery to either side, meaning the private and public sectors. Too often, this leads to one of two things occurring:

  • The SAR reported to FinCEN is inefficient due to how it is written and can fail to adequately describe the suspicious activity, or

  • The SAR is well-written, but the reporting institution does not have everything included in the SAR that law enforcement needs to take action on it. 

This can be due to:

  • The lack of understanding as to what law enforcement needs in the SAR to take action on it; 

  • Differences between how agencies act on information obtained from SARs; or

  • The SAR author lacks access to certain data, like chat history, IP addresses, or device information.

The Bridge

At FinTrace, we bring first-hand experience from both sides of the financial crime landscape. We've written unusual and suspicious activity referrals, drafted SARs, and reviewed and acted on them, giving us a comprehensive, end-to-end understanding of the process. This unique perspective enables us to bridge the gap between sectors and strengthen the collective fight against financial crime.

Our team is experienced working with financial institutions of all sizes, fintech companies, law enforcement agencies, and prosecution offices. 

We have experience helping fintech companies launch compliance programs, and we understand the challenges they face in implementing and maintaining these same programs. 

We know what willful blindness looks like when organizations prioritize profit above all else.

We have worked within financial institutions under consent orders and understand the level of work that goes into getting out from under one. 

We have experience working with suspects and victims of human crime and understand what it is like when such cases are successfully prosecuted – and when they are not. 

Our experience involves educating and raising awareness within organizations that believe their level of AML, fraud, or corruption risk exposure is lower than that of a bank. We use examples of detected and deterred incidents within the organization to demonstrate otherwise.

FinTrace was founded to help bridge the gap between the private and public sectors. By providing services to the private sector while actively collaborating with the public sector, we remain connected to both worlds and maintain the link needed to achieve our mission.

  • Deter bad actors

  • Defend the integrity of the financial system.

  • Disrupt bad actors

Monica M