Financial companies face heightened criminal activity

Directors and compliance officers at enterprises, banks, insurance firms and FinTechs say they are faced with increased criminal activity, with 74 per cent of them filing more suspicious activity reports (SARs) in 2020 than the previous year, according to global research.

Cyber security and third party risk management were the biggest compliance-related challenges, with over half of the respondents (54 per cent) ranking cyber security as a top pain point, according to the research from risks platform ComplyAdvantage.

Executives from the European, North American and Asia-Pacific regions were questioned, and virtually all the 600 respondents (93 per cent ) believe real-time AML (anti-money laundering) risk data would improve their compliance operations.

Nearly two-thirds (62 per cent) plan on upgrading their legacy systems this year and just over half (54 per cent) plan on replacing or upgrading their transaction monitoring system.

One of the biggest challenges that compliance teams face, said ComplyAdvantage, is keeping current on rapidly evolving regulations and the advances of criminal behaviour, while balancing their organisations' risk appetite.

Risk indicators are becoming harder to spot as the amount of information available grows exponentially and the speed of change gathers pace.

Trends that compliance officers most fear in the coming year include increased fraud related to COVID-19 relief, risk vulnerabilities related to inconsistencies in global AML and counter financing of terrorism (CFT) systems, the growth in sophistication of computer and mobile-enabled cyber crimes via payment systems, and the continued use of sanctions as a “tool of first resort”.

Charles Delingpole, chief executive of ComplyAdvantage, said: “Due to the massive economic, political and social disruption brought about by COVID-19 international crime syndicates, rogue nations, global terrorists and cyber criminals have become increasingly more aggressive.”

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