Adoption of technology & public-private co-operation is needed to fight money laundering in ME

By Helen Langton, CEO, APAC & Middle East at International Compliance Association (ICA)

Money Laundering remains a significant threat across the world, with estimates putting the value of illegal assets channelled through the financial sector at up to $2 trillion. The Middle East is a special case with unique challenges, such as the high number of transactions, the geographical proximity to unstable or sanctioned territories, as well as the remarkably wide range of operating banks with a global presence.

Stopping money laundering in the Middle East is directly linked to saving lives in the region, and elsewhere. In order to achieve this, it is extremely important to allow private-public sectors cooperation, information sharing, technological development, a risk-based approach, and AML training.

Data sharing represents a significant component to achieve a more co-operative and collaborative future. We could take a big step forward in better tackling money laundering if  the required parties were able to pool data. But we need to look at ways to reconcile our wish to become more effective in our AML work, while also preserving the right to privacy and data protection.

This vision of information exchange includes co-operation not only between regulated entities, but between the public and private sector, involving engagement between regulated entities, FIUs, law enforcement, and supervisors. This is particularly important in the context of COVID-19.

Countries such as the UK have developed ‘efficient information sharing mechanisms’. Whether data sharing is restricted to the exchange of strategic information or whether it also includes an exchange of operational data remains a significant consideration.

The key to balancing data sharing against privacy requirements – as well as meeting many other current AML challenges – lies in the development and deployment of new technology.

Technology plays a fundamental role in the evolution of AML from a reporting and intelligence -gathering exercise towards a more pro-active endeavour aimed at stopping money laundering.

Years ago we all worked with a tick-box approach. Eight years ago, we introduced the risk-based approach. The next step is to use more digital tools to become more effective in our mission. New technology can help us to be smarter and more effective in the fight against financial crime, with technological solutions supporting improvements in KYC / CDD checks, transaction monitoring, risk identification, communication as well as data pooling.

Since ICA was first established we have been working with regulators, law enforcement, FIUs, NGOs and the private sector developing initiatives to increase not only knowledge, but understanding. We have concentrated on explaining the social consequences of money laundering and financial crime, demonstrating it really isn’t a victim-less crime. Putting this into context helps ensure a united and collective view that for from just meeting the regulatory requirement for such preventative measures, we all have a part to play in mitigating the impact.

Throughout the Middle East, ICA have worked with regulators in the creation of training and knowledge sharing initiatives resulting in bespoke on-line and classroom based solutions as well as focus groups and events. Targeted and tailored training is a key component in the ongoing fight against financial crime, it is an investment in our future.

Let’s always remember the importance of the work being undertaken by industry practitioners, regulators, supervisors, law enforcement and standard setters alike. Money laundering fuels organised crime and terrorist groups. Stopping financial crime is about stopping the financial flows that enable drug trafficking, terrorist financing and environmental crime. It saves lives. That’s what really matters.