Tech To Tackle Financial Crime

Published / Last Updated on 25/10/2019

The Executive Director of Supervision – Investment Wholesale and Specialists at the Financial Conduct Authority (FAC), Megan Butler, spoke last week at the Royal United Services Institute in London, about tackling financial crime and using technology to do this.

It is estimated that hundreds of billions of pounds in the UK alone is laundered each year.  £37 billion a year in serious organised money laundering crimes and the annual cost of fraud in the UK is at a massive £190 billion.

A third of individuals are targeted by fraud on their bank accounts each year, and an increase of 3.9 million offences have been recorded on bank and credit account frauds.

Technology is already in place to minimise and prevent tech crime but criminals are getting through with ever new ways to beat security systems.

Butlet suggests that continuous innovation in technology is the key to stopping criminals and disturbing any crime in real time.  Butler is also asking companies to experiment in intelligent technology including AI, robotics, machine learning and natural language processing to tackle financial crime.

The FCA has set up a 'Sandbox' (testing area) to support firms looking to introduce and develop RegTech.

Solutions include:

  • Tougher encryption, enabling firms to make enquiries about higher risk customers to uncover discrepancies in their on-boarding/sign up/entry to systems and due diligence processes
  • The use of multi-party computation to drive real-time analysis of payments to combat authorised push payment fraud
  • Federated learning technologies to share and identify financial crime typologies across multiple entities
  • Using privacy enhancing technologies (PETs) to establish a ‘golden pool’ of data, supporting better identification of beneficial ownerships by eliminating discrepancies between public registers and firms’ own records

The FCA is also looking to promote and support these initiatives on a global scale.

Comment

It's a constant battle, as in all crime sectors, to try and cut, detect or prevent crime.

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