This will be the year of artificial intelligence and therefore those companies that have the structure in place to be proactive and embrace innovative technologies will be the winners in both the short and long terms.
In the financial crime world, big data is the norm and being able to capitalize on what it affords can only be accomplished effectively through technology.
There will also me more of a demand for the financial sector to adopt a holistic approach to their compliance programs and ensure that AML/TF, Fraud, Corruption, Tax Evasion and Cyber-crime are all part and partial of complete program.
Bearing this in mind, organizations will need to broaden their training and ensure they are providing the necessary skills to compliance personnel that is not siloed.
As we are seeing Amazon, Facebook and Google enter the artificial intelligence (AI) arena, opportunities for exploitation will grow exponentially. I foresee that the criminal element will embrace modern technologies as they become available and rely on them to carry-out their nefarious activities.
In the context of cybersecurity, this can enable ransom attacks at the corporate level of high net-worth companies. The ongoing creation of apps will continue to be made available through the dark web, which will enable exploitation with greater ease with criminals targeting individual accounts and large corporates engaging in seemingly normal internet activities.
Homeowners will continue to embrace connected home devices and the majority will fail to recognize the vulnerabilities created.
This will lead to more opportunities for exploitation and raise the risk for fraud and theft as criminals groups won’t even have to physical enter a house to, say, unlock a door or steal data through wi-fi-linked devices. .
In the fraud environment, the demand by consumers for real-time transfers, including cross-border, opens a plethora of opportunities for the criminal element. As these transactions will be occurring in almost real time, financial institutions will need AI to assess the validity in almost real-time.
Cyber training an essential prevention tool
Organizations need to emphasize even grater training to prevent social engineering and phishing attacks in 2018 as last year saw historic ransomware attacks and surges in cyber incursions across the board, including some of the most insidious vectors, such as business email compromise fusillades.
As this technique continues to generate millions for criminal groups, it is essential that employees embrace the need to ensure they are not contributing to providing opportunities for exploitation of their institutions.
Institutions must embrace security systems that ensure employees are secure whether on-site or off-site and not advocate using public Wi-fi connections, including mobile devices, as those are choice avenues for hackers to get into personal device to puncture corporate cyber bulwarks.
As we saw in 2017, we will continue to see ongoing data-breaches since many corporations have yet to fully understand their cyber-risk vulnerabilities.
Too many individuals and corporations do not proactively deal with risk until after the fact, a harsh lesson many of the largest data hubs on the planet that were victimized last year, including credit reporting bureaus, government agencies, hospitals, law firms and the like.
Criminals exploiting virtual currencies, dark web to continue
On that note, 2017 also saw ongoing attacks on Crypto-currency exchangers and holders, which due to the value potential, will continue to be a target. The anonymity that can be provided through a block-chain that has no link back to the human puppet master often makes using crypto coins a criminal’s dream.
In recent years, we have continued to witness the dark web being a source of education for criminals focusing on cyber and fraud attacks.
It is no longer necessary to be an educated hacker seeing all the tools can be acquired on the dark web for a reasonable cost. This availability will continue to create opportunities in 2018 for new entrants into fraud and cyber-crime.
Global crackdown on corruption will also gain momentum in 2018
On the corruption front we have continued to witness The Justice Department’s aggressive prosecution of global companies for anti-corruption violations.
Companies will need to ensure they have a comprehensive corruption compliance program, which considers government’s expectations. In 2017 many countries reinforced their whistleblowing systems and procedures for whistleblower protection.
This was declared as a priority by the Head of the Organisation for Economic Co-operation and Development (OECD) Working Group on the Anti-Bribery Convention, Drago Kos, when he articulated his determination to advance whistleblower protections during the celebrations of the 20th anniversary of the OECD Convention.
Stronger public, private partnerships crucial
On the challenging issue of domestic and international public and private cooperation, we saw great strides in 2017, but also a sobering realization that more, much more, needs to be done to counter large scale criminal networks and improve results in arrests, convictions and asset forfeitures.
We have witnessed how private and public partnerships in money laundering can work to achieve results that have failed in the past.
For example, the collaborative approach taken on human trafficking has demonstrated that through working together, public and private results can be obtained far exceeding those through each sectors’ individual focus.
For example, the Joint Money Laundering Intelligence Task Force, created recently in the U.K., should be a model that is embraced around the world, which supports the notion of public and private partnerships.
Corporate anonymity still a flashpoint
The relatively lax global rules around beneficial ownership and current country weaknesses will continue to be highlighted, hopefully with a goal of enacting legislation to negate these systems that enable anonymity.
Pressure should also continue to exist in North America by the Paris-based Financial Action Task Force (FATF), the international standard-setting body for AML procedures, for gatekeepers to be brought in under money laundering legislation.
To be sure, though, the political climate found around the world will also create challenges for our collective industry notwithstanding this, as we have in the past we will continue to strive to meet our obligations and ensure our countries remain safe and sound places to live.