Acuminor's PPP Expert discusses the challenges for Public Private Partnerships ahead.
"Public Private Partnerships (PPPs) in the anti-money laundering (AML) sector need to be improved," I am sure you have heard before. Or how about this one: "PPPs must do more." PPPs do not need to do or be anything other than what they are, so these statements are false.
There is ample evidence that PPPs are a successful tool for the AML sector in bringing private companies and law enforcement/regulatory authorities together to prevent serious and large money laundering cases from occurring.
However, just because they are not required to be more does not mean they can not be, or that they can not serve as the foundation for the development of another useful tool.
Why should PPPs be anything other than what they are?
It all boils down to one major issue: the lack of a long-term collaborative and information-sharing infrastructure between private and public AML entities. For single cases or investigations, the traditional PPP setup works, but not indefinitely.
The development of siloed work environments, in which each side rarely collaborates with the other outside of the PPP structure and the submission of suspicious transaction reports, is a major consequence of this problem (STRs).
As a result, both sides of the industry have developed their own AML and financial crime priorities, understanding, and outputs. This is demonstrated by the lack of context in the reporting of risks and typologies that link predicate crimes and threats to financial products, services, customer types, and so on.
Or there is the misunderstanding about STRs, where regulators claim to be "drowning" in the volume of STRs submitted, or that they are being used to shift accountability from banks to other stakeholders.
The point is that there is a gap in understanding and terminology between the private and public sectors of the AML industry that needs to be bridged on a national and international level.
We do not have to start from scratch.
We can look at some existing infrastructure examples that connect various stakeholders to see if the PPP structure can improve communication and information sharing between the private and public sectors.
On a national level, the Joint Money Laundering Intelligence Taskforce (JMLIT) in the United Kingdom is providing vital information and updates on money laundering risks and typologies to a wider audience of stakeholders.
The Lithuanian AML Center, which was established in 2021, is developing knowledge and best practice sharing initiatives for its private sector stakeholders, among other things.
On a global scale, the Europol Financial Intelligence Public Private Partnership (EFIPPP) brings together private and public sector stakeholders to improve understanding of anti-money laundering threats and risks, share information, and promote the use of new tools and technology. As a result, the PPP structure has already been expanded and developed; all that is needed now is central coordination, stakeholder motivation, and policy implementation.
While these examples have been successful to varying degrees and point to a promising future for scaling PPPs globally, the addition of many stakeholders to a network can cause it to operate slowly, inefficiently, and reactively, often unable to keep up with developments occurring outside of the structure itself, especially in the criminal world.
How can we make sure that attempts to scale up PPPs are not slowed down by massive amounts of data and stakeholder input? A common taxonomy and technology
We must advance and embrace technology.
The most obvious and immediate role for technology in the expansion and development of PPPs is to make it easier for thousands of stakeholders to share all kinds of information in a timely and efficient manner. It should also allow the anti-money laundering industry to be more proactive in the face of unexpected criminal discoveries and developments. It is time to go beyond PDF documents and emails and start having round-table discussions!