Intelligence sharing across institutions for effective prevention

Intelligence sharing across institutions for effective prevention

By Remy Jansen, Head of Department, De Nederlandsche Bank

Interview ahead of Fraud and Financial Crime Europe Summit (Get 15% discount on the Summit using presenter code: Fraud/EU)
Can you please tell the Risk Insights readers a little bit about yourself, your experiences and what your current professional focus is?

I started my career at De Nederlandsche Bank (DNB) in 2002 in pension fund supervision. At the time my main focus was the solvency of pension funds. After having worked as internal auditor at DNB and the Bank of England I moved to a new department responsible for quality assurance of supervision. During that time I familiarised myself with the area of integrity supervision, for instance as project manager of a thematic review focusing on the involvement of Dutch financial institutions with financial benchmarks post Libor. Since 2015 I am Head of Department responsible for the integrity supervision of amongst others Dutch banks, payment services providers and money remittance companies. Our aim is to ensure that Dutch financial firms have a sound risk and control framework in place to prevent and manage all relevant integrity risks, including money laundering, corruption and terrorism financing. To this end we conduct various (on-site) Investigations, intervene (if necessary using formal powers) to mitigate legal breaches and risks that are insufficiently managed and provide guidance to and liaise with the financial sector and other authorities to strengthen the effectiveness of preventing and managing integrity risks.

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?

Conferences such as the Fraud and Financial Crime Europe Summit are for me a great opportunity to learn about the latest developments in the financial sector and to be informed by experts on solutions that are being developed and implemented at specific firms and by third parties. In my session I intend to explain the current developments in the Netherlands regarding public sector – private sector partnerships as well as plans by Dutch banks for more  cooperation in the space of AML/CFT, and to discuss the focus points of DNB in the context of tackling financial crime.

In your opinion, how intelligence can be shared more effectively between private and public sectors?

I will discuss more in-depth the initiatives in the Netherlands during my session. But more in general, I believe the key element for successful cooperation between public authorities and financial institutions is trust. This goes further than trusting the other party to do the right thing with the information shared. This starts with clarifying the role of each organisation in the partnership, being clear about the objectives of each stakeholder for this partnership and afterwards holding each other accountable to the roles and arrangements that have been agreed at the start of the partnership. I believe this part is much more challenging than the legal, technical and operational aspects of information sharing.

What are the legal restrictions on information sharing and what are the implications?

This varies between jurisdictions. I am not an expert on the legal situation in the United Kingdom, but in the Netherlands there are provisions in various laws that restrict the sharing of AML/CFT related information between public and private entities and also between private entities. Furthermore, the Dutch AML laws specifically restrict to what extent AML processes can be outsourced to third parties for instance when exploring KYC or transaction monitoring utilities. Given the fact that both public authorities and financial institutions want to increase the effectiveness of AML/CF, the legal situation is a subject that is currently being discussed by public authorities and private institutions also with the Dutch government.

What is the context behind using the right data and what are the potential uses?

“Garbage in, garbage out” applies also to data needed for AML/CFT purposes. As the AML supervisor DNB notices that many financial institutions are still struggling to collect and retain complete and accurate data on their clients and transactions. This is partly a legacy issue, having paid less attention to KYC in the past, but partly also a IT issue since many firms are in the process of improving their IT systems or have not done so yet. Having complete and accurate data available (and state-of-the-art IT tools) is essential for being able to conduct proper KYC processes and to monitor transactions in a sophisticated way including exploring new techniques such as machine learning, deep learning and AI. I believe there is still much room for improvement in transaction monitoring once these new techniques have been fully implemented by financial institutions.

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

I believe 2019 will again be an interesting year for fraud and AML/CFT with the AMLD5 being implemented in EU member states (including in the Netherlands), potentially the EBA taking on a bigger role with regard to AML supervision, the latest developments with regard to tax evasion, crypto’s and the geopolitical developments. A lot is happening, awareness of financial crime has never been higher also among media and politicians. Financial institutions must deliver on their ambitions to improve its AML/CFT frameworks as well as their efforts to cooperate more closely with peers and public authorities on KYC and transaction monitoring.


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