This paper examines the effectiveness of suspicious activity reporting in our financial system.
The volume of suspicious transaction reports submitted by banks and others across key financial centres is growing at 11% per year, with over 2.6 million reports expected to be filed in the UK and the United States in 2017. However, this study finds that between 80% to 90% of this suspicious reporting is not useful to active law enforcement investigations.
Responding to these challenges, this report examines the emergence of new information-sharing partnerships between financial institutions and law enforcement agencies, set up in a small number of countries, which allow public and private institutions to share insights on terrorist and serious crime threats.
- Provides the first international study of FISPs, describing current international variation across the US, the UK, Canada, Australia, Hong Kong and Singapore.
- Draws lessons and establishes good practice from existing models to support and inform national and international policymakers to develop FISPs and increase the efficacy of the fight against money laundering.
- Establishes a principles-based approach to the development of FISPs.
- Raises further reflections for international policymakers about the strategic approach to tackling financial crime.
About the Authors
Nick J Maxwell heads the FFIS research programme. Nick is the founding Director of NJM Advisory, a research consultancy focused on anti-money-laundering issues and public–private collaboration. Prior to this, Nick’s professional career has included: Head of Research and Advocacy for Transparency International UK; providing anti-money-laundering specialist advice to a NATO taskforce in Afghanistan as an Intelligence Liaison Officer; managing the International Economics Programme at Chatham House; and leading the public policy function at the Institute of Chartered Accountants in England and Wales (ICAEW).
David Artingstall is an Associate Fellow at the RUSI Centre for Financial Crime and Security Studies, where his research interests include AML/CTF policy, risk and information sharing. He is also an independent consultant specialising in AML/CTF and regulatory risk issues. His roles as a consultant over recent years have included assignments as an international contracted expert for the IMF, UNODC, EBRD, Council of Europe and European Commission providing technical assistance on national AML/CTF frameworks. Prior to becoming a consultant, David held financial crime policy and intelligence roles in various public sector organisations, including the Financial Services Authority, the UK FIU and Special Projects Branch at the National Criminal Intelligence Service, and the Metropolitan Police Special Branch, where he specialised in terrorist finance intelligence and investigation.
This paper is published by RUSI and the Future of Financial Intelligence Sharing (FFIS) programme, a joint initiative with RUSI's Centre for Financial Crime and Security Studies.