THE Chief Executive of Banking & Payments Federation Ireland (BPFI), Brian Hayes, spoke at the International Fraud Prevention Conference 2021 on how the banking industry can help in fighting financial crime and the growing risk of money laundering.
The conference is hearing from many stakeholders on how a multi-agency response can help build up capacity in the detection and prosecution of financial crime both internationally and here in Ireland.
Addressing the conference Brian Hayes said: “Banks and their staff are playing a major part in identifying those involved in money laundering, people smuggling and international organised crime through the reporting of suspicious or unusual activities to the authorities, a role and responsibility that is becoming even more onerous in recent years given the extremely sophisticated nature of international crime and how the internet can be used to evade detection.
"Banks across the EU spend more than €100 billion annually in compliance in this area. However, the speed and sophistication of financial crime is now on such a scale that rapid information sharing and ever closer collaboration between banks, tech, policymakers, and the gardaí must be part of a whole new public-private partnership approach to the problem. The growth of online fraud and financial crime throughout Covid is a warning to all of us.
“The criminals have a head start across all activities and banking as an industry needs the support of policymakers in closing loopholes and in committing resources to the prosecution of this crime. We also need legal certainty on the question of privacy rights and the sharing of information. The speed with which we can share information as an industry is critical to identifying and stemming the flow of illicit finance and catching the criminals.
“The European Banking Federation (EBF) and Bloomberg have estimated that barely 1% of all cases of AML are prosecuted and about 1% of criminal proceeds in the EU are confiscated by the authorities.
"Compliance must be matched by a legal framework that is risk-based and an EU response that delivers a harmonized approach which is clear for everyone. For too long the EU approach in this area is anything but coordinated or streamlined.
“BPFI is anxious to progress new industry collaboration in the area of a Shared Fraud Database, the potential of an AML transaction monitoring utility similar to the Dutch banking example which can help us detect people smuggling operations by bogus bank transfers.
"These initiatives need regulatory and public policy buy-in and also need EU legislative support. We hope that the upcoming EU AML framework proposal promised by the EU Commission for publication soon will help in these areas of shared information. We also need a more harmonized approach to GDPR interpretation at a member state level.
“At all stages, the banking industry has had excellent engagement with the Financial Intelligence Unit of the Garda National Economic Crime Bureau. The establishment of the Joint Intelligence Group (JIT) between the banks and the An Garda Síochána is greatly helped in working together.
"We have recently established with the international banks based in Ireland an International JIT and this is helping in looking at the issue on a more international basis. Other good work includes specific research on new trends and skills requirements in the area of cybersecurity.”
The BPFI CEO put forward some suggestions from the industry that might help in the area of tackling financial crime including:
A new harmonized EU AML/CFT framework approach builds on the existing AML regulations but reduces the need for local interpretation/carve-outs.
Empower a new EU Supervisor and law enforcement agency locally to deliver on AML agenda.
Build up Public-Private Partnerships (PPPs) and provide legislative authority for PPPs across the EU.
A balance between GDPR rights and shared information across PPPs must be found.
Get support behind new AML detection technology and research, especially in our universities.
Be more supportive of non-competitive industry-wide collaboration that delivers on the agenda.