Essential Networks: a helping hand for anti-financial crime professionals

Success in combating financial crime is achieved when public and private entities collaborate. Read our blog and discover how to harness the network effect.

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On a recent International Compliance Association (ICA) webinar Sylwia Wolos from Ground Truth Intelligence joined a global panel of experts discussing why it is increasingly important in anti-financial crime roles to utilise collaborative partnerships and networks. In this blog, we explore what forms these alliances can take, the benefits they provide, and challenges that will be encountered on the way. The overriding message, as the numerous practical examples and success stories shared by the presenters illustrate, is that working together and harnessing the network effect to combat financial crime is becoming non-negotiable. Here is why.

Organised crime networks vs anti-financial crime networks

Financial and organised criminals have benefited from using complex global networks to conduct their criminal business and to hide illicit proceeds. By using a variety of techniques including intricate ownership structures and cross border cooperation, they are able to circumvent often stringent anti-money laundering and other financial crime legislation.

Neutralising these highly complex financial crime networks, stopping the flow of illicit funds, and recovering the proceeds of crime has proved extremely challenging. By taking a leaf out of the criminals’ book and collaborating through different networks and partnerships, the anti-financial crime ecosystem has been able to show great benefits and results from these alliances.

Types of anti-financial crime partnerships

As financial criminals become more sophisticated, a solution needs to be found. The Financial Action Task Force (FATF), in its July 2022 report, explores how partnering and information sharing in the fight against financial crime, while not without challenges, is the way forward.  

The most beneficial types of networks we have seen in the anti-financial crime world are collaboration projects across four critical stakeholders falling under a variety of permutations. Here are some examples:

  1. Public-public: governments; intergovernmental organisations; law enforcement agencies.
  2. Private-private: collaboration at sectoral or regional level (eg the Wolfsberg Group, or the MENA Financial Crime Compliance Group).
  3. Academia and NGOs: in some cases including investigative journalists, working together on research/advocacy efforts with public and private groups, and educating wider society.
  4. Public-private: often mixing all 4 stakeholders detailed above.

The above examples are strategic networks driven by the primary objective of attaining successful outcomes through information and knowledge sharing. Some of these networks are centred around secondary tactical objectives, be it driving process efficiencies through KYC utilities in banks, or those advocating for a very specific topic such as diversity and inclusion; innovation and deployment of AML technology; or focusing on a specific crime, for instance wildlife trafficking.

Common barriers for anti-financial crime networks

Setting up and operating a network effectively from scratch can take time and is not without its pitfalls. Working together cohesively can prove difficult, especially if there is a lack of central control and the participants have differing, or sometimes conflicting, priorities.

A clear understanding of each participant’s role within the group is a necessary step to ensure an effective network. In addition, gaining a sense of what information is needed, and in what context it will be used, by each participant, and how it can be shared effectively, can be extremely challenging.

Furthermore, understanding and getting over regional jurisdictional, legislative and regulatory hurdles can take time. Data and privacy legislation, although vitally important, can be a barrier to the free flow of information between parties in an anti-financial crime partnership.

Benefits to Harnessing the Network Effect

The advantages of networks and partnerships far outweigh the challenges. Here are three key benefits you might be missing out on.

Access a bank of knowledge

Clearly no person or organisation can be an expert on everything, nor do organisations on their own have access to multiple experts across all areas. Networks and collaborative partnerships offer a unique opportunity for experts from public and private entities to work together. They operate as a vehicle to share perspectives and best practices effectively and provide a knowledge bank where members can access a large pool of subject matter expertise and know-how.

Being able to tap into expertise across network members, to obtain rich layers of information that you may not have access to in your area of operation, can be a game changer. The cross-pollination method of intelligence gathering, looking through multiple lenses instead of one, provides a much wider net to not only gain context but also lessen the chances of missing a vital piece of information.

Breaking global barriers

Essential networks have many use cases not only in anti-financial crime, or anti-organised crime but also in the broader compliance landscape. One such example is due diligence intelligence gathering.

The practicality of utilising a network of subject matter experts in due diligence investigations is ably demonstrated by this case study. The successful outcome for a client, who required a multi-subject investigation across one of the most challenging regions, was due to several factors. By teaming up with a network partner who had extensive local knowledge and a wide presence across the region, relevant on-the-ground intelligence was gathered and shared in real time via a collaborative secure platform, for a consistent, agile approach enabling quick and informed decision making.

As an anti-financial crime or compliance professional, it isn’t always straightforward to obtain the information you need, particularly if your investigation necessitates obtaining information across multiple regions or jurisdictions where you have no footprint.

Furthermore, accessing information securely and within the law can prove a burdensome task. Although stringent data protection and privacy laws are vital, there is parallel legislation in some areas which allows for information sharing under the right circumstances, and on secure platforms.

Collaboration brings success

Working together in essential networks, however unique to specific use cases or operational needs, is vital in reaching both common and individual goals. For instance regulators and think-tanks are continuously updating financial crime typologies, themes, and red flags. Access to this latest information through your strategic partnerships gives the ability to be proactive instead of reactive, and allows you to update your processes and procedures accordingly.

Practitioners bringing and sharing their enthusiasm and motivation with other members of the group multiplies its effect and can be a key factor in successfully reaching network goals. Having access to subject matter expertise and sharing critical information gives anti-financial crime professionals a much broader understanding of any issues or risk, thereby equipping them with the information and tools they need to take action.

Make a greater impact

What is certain is that when experts from public and private entities work together, sharing perspectives and best practices in combating financial crime, we can make a bigger impact. But what does this mean for you?

If you aren’t already a member of a network, it is worth taking the time to explore them and harness the power of the network effect for yourself. Find out which networks your organisation is a member of or explore collaborative partnerships already in place that would be the right fit for your organisation’s field of operation.

Don’t forget, a simple way to extend your network reach is by using the Ground Truth Intelligence platform to access a curated and vetted network of over 1500 sources in 250+ jurisdictions. Book your demo today and see the platform in action.