The World Economic Forum-supported Global Coalition to Fight Financial Crime outlines five recommendations for the Great Reset to achieve a recovery that protects citizens from criminals.
1. Police have the capabilities to dismantle criminal groups, such as through the recent disruption of European criminals’ widely used encrypted telecoms service EncroChat. Despite this, more than 98% of criminal assets are not recovered. Obstacles to recovering criminal assets should be removed so they can be used for the good of society. A starting point would be to improve access to and sharing of financial and beneficial ownership information across borders. A multi-stakeholder initiative co-hosted by the Forum’s Partnering Against Corruption Initiative (PACI) has mapped various verification strategies currently being deployed around the world from manual to advanced technological approaches.
2. Public-private partnerships against financial crime are effective. Governments should build a policy and legal environment that facilitates innovative cooperation between law enforcement, financial intelligence units (FIUs), regulatory agencies and the private sector.
3. Keep the information flowing: fighting financial crime requires multi-disciplinary partnerships between law enforcement, public agencies (financial intelligence units, customs, tax authorities, judiciary) and the private sector, all working across borders. Data Protection laws must not be misused by criminals and should be adapted to create the legal and policy environment to allow for appropriate information sharing and the testing of innovative technological solutions to combat financial crime.
4. Financial crime has the potential to undermine financial stability and affects internal security interests.Therefore it should be part of regular risk assessments and integrated law enforcement response.
5. Financial services providers should move from reactive financial crime ‘compliance’ into proactive ‘risk management’ cultures that protect the societies that financial institutions serve. For this to happen, policy-makers should examine and realign the incentives they have placed on the private sector. This could focus on developing outcome-based metrics for the effectiveness of anti-money laundering programmes rather than concentrating on technical compliance and controls measures.