Phil Rolfe, financial crime expert and CEO at P2 Consulting and P2 FinCrime

It was announced recently that Belgium’s biggest banks have proposed a system to share suspected money laundering information. They follow in the footsteps of Dutch banks, where 12 months ago, five of Holland’s banks announced an initiative to set up Transaction Monitoring Netherlands (TMNL) and work in conjunction with the Dutch Banking Association to help combat financial crime.

Collaborative work like this – sharing data, intelligence and best practice on processes and systems – is great news for law enforcement, bad news for financial criminals. But banks need to start working together in the UK too – filing SARs and participating in industry groups isn’t enough. There is no competitive advantage to be gained from working alone – collaboration is key to effective AML.  This is what UK banks need to do:

• Going Dutch: talk to the banks in Holland, who have already set up TMNL, to understand the framework and the pitfalls – it is a tried and tested method, so it’s useful to learn from them what has worked and what hasn’t
• Central bank involvement: the ‘Big Four’ high street banks need to start working with the Bank of England and the Treasury to pilot data captur
• Start with baby steps: the banks working collaboratively on AML would need to define the simple data points to be used initially and build from that starting point
• Pooling data and spotting patterns: the main issues facing AML professionals are ‘Big Data’ challenges, so the more data that can be pooled the better. That combined with AML teams sharing intelligence and best practice means the chances of spotting unusual data patterns and detecting financial crime rise significantly. The banks involved also need to agree who will host and govern the data store.
• Look for anomalies, not scenarios: the new entrants in the financial crime software space do not rely on binary scenarios – they look for anomalies in the patterns of data. The benefit is that any anomaly can trigger an alert, so rather than relying on coding a binary trigger based on a set scenario, the software flexes to seek unusual activity in the data.

The message is simple – the bigger the data pool, the more likely it is the banks will detect evidence of criminal activity. Criminals aren’t fussy – they will target and institutional weakness, all the banks out there are possible targets. So it makes sense for those “targets” to work together in the war against the financial criminal fraternity. UK banks have some ground to make up, so need to get going sooner rather than later.

P2 FinCrime have the experience and capability to support you and your business today, please email me at phil@p2fincrime.com or call +44 (0) 7798 666 454.