Fraud and financial crime: Increasing intelligence and information sharing across departments

Fraud and financial crime: Increasing intelligence and information sharing across departments

By Riley Peterson, Director, Head of Strategy and Governance, MUFG

Interview ahead of the 2nd Annual Fraud and Financial Crime Europe Summit, taking place 2-3 April in London
Can you please tell the Risk Insights readers a little bit about yourself, your experiences and what your current professional focus is?

I’m an American with 15 plus years of experience in Financial Crime. Half of that was gained in the US and half in the UK/EU. Most of my career to date was spent in Big 4 consulting so I’ve been inside almost every major bank in the world. In 2017 I made the move to one of my key clients, MUFG Bank and have been there ever since.

My current focus as the head of Strategy & Governance, is working with our global and country heads of financial crime to ensure all branches in the EMEA region are working off our global standards.

What, for you, are the benefits of attending a conference like the Fraud and Financial Crime Europe Summit and what can attendees expect to learn from your session?

These events are great because they really force you out of your office for a day or two to meet up with other people in your profession. You get to catch up with old friends, meet new people and get a better understanding of where the industry is headed.

I particularly like understanding how other institutions are leveraging technology to step away from the endless volume of alerts and focus on actual analysis.

What are the impacts of the 5th EU money laundering directive? How can it be implemented effectively?

For me, the key is consistency across all EU member states. The cloud of Brexit may have an impact on the UK laws, but settling on consistent definitions of things such as “prominent public functions” (PEPs) and “legitimate interest” (Trusts) will be fundamental to successful implementation. If consistent definitions are not reached, we risk criminal’s forum shopping around member states looking for the most relaxed standards.

In your opinion how can intelligence and information sharing across public and private intuitions create effective detection and prevention of fraud and financial crime?

Intelligence and information sharing are crucial to preventing financial crime. I really can’t think of a time in history where information sharing wasn’t helpful in service of the greater good.

In medicine, information sharing is a regular occurrence. It’s how public agencies such as the CDC successfully create vaccinations to combat the most common strains of influenza.

Financial crime really needs to take a similar approach. Obviously there are concerns with data privacy, but these concerns must be balanced against the risk of another major terrorist event. If we can’t share personal information, we need to be more open about trends in the market. Regulatory bodies have been unable or unwilling to provide this information in the past, so FIs really need to take the lead.

What impact is GDPR having in intelligence and information sharing?

At this point, GDPR is having a minimal impact at my organization. But bear in mind that we don’t do any retail banking in the UK, only corporate and investment banking. As a result, most of the information on our clients is publicly available.

How do you see the impact of Fraud and Financial Crime evolving over the next 6-12 months?

I imagine there will be more data breaches such as with the Panama Papers. The amount of proactive investigations and event driven reviews will increase and put more pressure on the front lines.

I also foresee that a downturn in the economy will lead to under-investment at the first line, putting more pressure on the control functions.

Obviously, criminals will continue to get smarter and more technically savvy. I would predict financial crime moves into virtual spaces and challenges our fundamental definition of currency. Criminal activity will move from the real world into video games, and blockchain will obviate the need for traditional vehicles for settlement such as SWIFT.

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