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Why It’s Time to Rethink Your Approach to Financial Crime Training

It’s been ten years since the global financial crisis and many are reflecting on the current state of play in the financial services industry. Financial crime is still one of the biggest challenges the industry faces. Ahead of our webinar on the topic, Principal Consultant, Liz Hornby, says it’s time to take a fresh approach to financial crime training.

What was your reaction when you read the recent news that Danske Bank, Denmark’s biggest lender, had been accused of laundering $150 billion through its branch in Estonia? Shock, embarrassment, apathy? Just another fine in a long list of similar failings?

Ten years on from the financial crisis is a good time to reflect on why the industry is still allowing itself to be used as a conduit for financial crime.

A large part of rebuilding trust in banking must acknowledge the industry’s role in shutting the door to money laundering and terrorist financing. We also need to recognize that this drive is not just a legal and regulatory obligation, but a social and moral one.

The Impact of Financial Crime

Money laundering and terrorist financing ruins lives and kills people. The figures are shocking.
Here are just two, taken from the recent speech by Christopher Woolard, Executive Director of Strategy and Competition at the FCA1:

  • It is estimated that $150bn is made from forced labor every year—that’s over $4,750 a second.
  • The drug trade, and the professional brutality that sustains it, is valued at $320bn annually.

There is no room for complacency; banking is a high-tech industry that prides itself on hiring the “Smartest Guys in the Room”2 and yet the criminals always seem to be three steps ahead.

How Should Firms Approach Financial Crime Training

Perhaps we need to shift our thinking and acknowledge that robust anti-money laundering policies and procedures are never going to be enough. The key is an engaged workforce who act as an alert and proactive first line of defense, and who understand and accept their individual responsibilities in this area, not only to their employer, but also to society and the potential future victims of financial crime.

In the last reporting period, the FCA revealed that 922,544 internal Suspicious Activity Reports (SARs) were made to Money Laundering Reporting Officers (MLROs).

Behind each one of those SARs is an individual who:

  • is vigilant
  • is motivated
  • is able to recognize the ‘red flags’
  • knows how to make a report

As an industry, our collective goal must be to drive the level of reporting even higher. This means taking a new approach to training in this area, to create financial crime training that drives lasting changes in behavior.

Whilst the mechanics of making a SAR can be successfully addressed by traditional training programs, there is growing recognition that the other behaviors and skills listed above require a new approach.

To find out more about our financial crime training offering, including custom courses and instructor-led training, get in touch. Alternatively, view our catalog of off-the-shelf financial crime courses.

  1. FCA (2018), 'Technology and global ties: turning the tide on financial crime'
  2. Taken from the book, The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron by Bethany McLean and Peter Elkind

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