Project FFIS: the current response to the threat of economic crime as "inadequate and fragmented"

The current response to the threat of economic crime has been described as "inadequate and fragmented" in a research project funded by the Royal United Services Institute (RUSI) in the UK.

In the discussion paper titled "Lessons in private-private financial information sharing to detect and disrupt crime," the Future of Financial Intelligence Sharing (FFIS) project examined 15 private-private partnerships initiatives around the world aimed at combating financial crime.

According to the survey, "tdriving impetus for supporting more effective economic crime-related (ECR) private-private information sharing is that the threat of economic crime is severe, but the response to the threat is inadequate and fragmented."

The FFIS project's response revealed that efforts by the public and private sectors to combat money laundering, fraud, and cybercrime frequently operate in "silos" both within and between their respective "domains of economic crime."

In contrast to each private sector organization acting independently, the FFIS survey found that collaborative analytics, such as public-private partnerships, had a "greater chance" of identifying underlying criminal behavior.

The use of collaborative analytics is expanding, according to a survey of international private-private partnerships, but platforms vary widely in "practice and form."

The FFIS stated that "now is an appropriate time for policymakers to consider a more strategic approach to encouraging and co-designing the capabilities of private-private (ECR) platforms into a joined-up public-private strategy."

According to the FFIS, the development of public-private strategic collaboration should be "encompassed within a shared strategic vision between public and private sector stakeholders for how economic crime is addressed" and be carried out in a setting with "clear enabling legislative and regulatory environment."

A "framework of good governance, data ethics, and accountability" should be used to implement this development, as well as "sustainable funding, attention to cyber security risks, adequate information security standards, operating procedures, and professional standards."

The framework must also take "due regard to privacy protection and the potential for analytical bias," as well as "appropriate use of technology to enable information-sharing and a robust approach to data ethics."

The study examined 15 different platforms related to private-private economic crime, including programs in the US, UK, Singapore, the Netherlands, Switzerland, Estonia, and Australia.

The survey also noted a "nascent and under-developed policy landscape" supporting private-private information sharing related to economic crime, with a number of platforms having "maturity and history of operations" that varied greatly.

The Transaction Monitoring Netherlands (TMNL) initiative, which was started by five of the biggest Dutch banks, is one instance cited by the FFIS.

To gather encrypted transactional data from customers, these institutions include ABN AMRO, ING, Rabobank, Triodos Bank, and De Volksbank. TMNL enables the screening and identification of potentially unusual transaction patterns that might point to illegal activity, in addition to the nation's FIU.

Norbert Siegers, the chief executive of TMNL, said in an interview with the Wall Street Journal that the initiative had not yet developed outcome metrics but that it had produced about 2,000 alerts since it went into operation.

He claimed that "we are basically an analytics factory, where we create [anti-money-laundering] models to find potential patterns, but the investigation of the alert is still done by the banks." 

Hennie Verbeek-Kusters, a former chair of the Egmont Group and current director of FIU the Netherlands, told the Wall Street Journal that it was a "very straightforward way to take information exchange and cooperation between banks to the next level."

By fLEXI tEAM