Pandemic Lessons for the Financial Crime Community

Sitting in conference venues in Berlin last week, it was hard not to reflect on the discussions taking place through the lens of the coronavirus pandemic. Over the past two years, these sorts of gatherings would have been unimaginable. The ability to meet friends and make new acquaintances from Australia, Malaysia, Brazil – even neighbouring European countries – has been sadly absent as we’ve had to inhabit a 2D world powered by video calls.

But alongside the pleasure of rediscovering social contact and, of course, visiting great and storied cities such as Berlin, it was impossible not to feel a depressing sense of déjà vu; a growing frustration that despite all the world has been through in the past two years, we are no further forward in the mission to respond decisively to financial crime.

As the panel discussions meandered, the parallels with the coronavirus pandemic became increasingly clear. Financial crime is a pandemic – one that has lasted for decades, where mutations are constant as criminals adapt; as their ways and means evolve; and as their targets and opportunities expand.

Thousands of people around the world dedicate themselves to responding to this pandemic; many thousands more are the victim of financial crime as they are defrauded, suffer from the kleptocratic behaviour of the corrupt, are killed by terrorists, or are trafficked for sex or labour exploitation.

Yet, by any reasonable measure, the financial crime pandemic grows exponentially as the world’s response is mired in linear thinking, inching forward but frequently disrupted by barriers that are real, imagined or even fabricated by those resistant to the measures required to achieve a step-change (think of them as the ‘anti-vaxxers’).

There is no shortage of initiative. At the recent series of discussions attended by this author, a dazzling array of technological solutions were paraded. The Financial Action Task Force (FATF) – the global financial crime watchdog – has made good use of the past two years under its German presidency to promote and advance a ‘digital transformation’ in the response to financial crime, most recently at a conference on the fringes of its plenary meeting in Berlin.

Yet the world feels no closer to meaningfully addressing the financial crime pandemic today than it did eight years ago when we started our Centre for Financial Crime and Security Studies at RUSI. Progress has of course been made. Public-private partnerships with an array of acronyms have sprung up across the globe; enabling legislation has been passed in places; and some – but only ‘some’ – success has been reported.

Over the past two years, the world has faced another pandemic, more recent and more visible than financial crime. As COVID-19 swept across the globe, the world’s scientific community scrambled into action. Unknowns were clarified; longstanding networks in the scientific community were energised; private sector companies – in part catalysed by government investment – mobilised; and governments strove to facilitate approval processes, clear unnecessary impediments and prepare their health services to deliver the hoped-for solution. All this was done in a realm – human health – where corners could not be cut, trials and approvals could not be overlooked, and sceptics were waiting to pounce on every uncertainty.

Yet, as the whole community, indeed the whole world, had a single vision of purpose – defeat the virus, save lives and restore the freedoms we were all accustomed to in 2019 – everything and anything that was necessary to achieve these outcomes was considered. Failure was never an option.

And then it struck me, sitting in that conference in Berlin. In contrast to the single-minded mission that all felt in taming the coronavirus pandemic, similar unity does not exist in tackling the financial crime pandemic. The headline might be the same – ‘fight financial crime’ – but the desired outcomes in this community are diverse, and thus the steps taken by the protagonists are self-serving.

Governments don’t make the necessary investments in the resources required to respond to financial crime; supervisors don’t enable the innovation needed to achieve the exponential advances that are required; regulated private sector actors want solutions that make them more efficient, not more effective; technologists invent solutions that are constrained by – and thus perpetuate – this sub-optimal operational environment.

As one conference panellist noted, channelling Henry Ford, we don’t want faster horses, we want a completely new form of responding to financial crime. We want governments that recognise the cost of financial crime to society and invest accordingly; we want supervisors willing to challenge the status quo they perpetuate; we want regulated private sector actors that meaningfully contribute to identifying and disrupting financial crime, not simply ensuring a clean bill of health when they are inspected by their supervisors; and we want technologists who are inspired to develop solutions that challenge, not cement, the status quo.

As I left the conference centre, built astride a line that once marked the Berlin Wall separating East from West, past from future, and optimistically called ‘The Futurium’, it was hard not to wonder what the future of financial crime fighting holds. Do we continue on a linear path, in pursuit of a challenge that – as COVID-19 did – grows at an exponential rate? Or do we, as the people of East and West Germany did in 1989, break through the status quo and achieve a genuinely new future for fighting financial crime?

It was also hard not to wonder what the world would be like today if the health, epidemiology and vaccine community had approached its response to COVID-19 in the same linear fashion.

With all the resources, brainpower and desire to succeed that it has at its disposal, the financial crime community can do better. The past two years have proved what can be done. It’s high time the financial crime community deployed the same dedication, single-minded focus and purpose of mission.

The views expressed in this Commentary are the author’s, and do not represent those of RUSI or any other institution.

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