In this week’s Financial Crime Wave, a new term, “regtech,” enters the financial crime fray, describing firms using advanced technology to bolster compliance, several large banks have stated they are analyzing or actively adopting automation to lower compliance costs, head counts, the United Kingdom gets tougher on corporate liability, accountability for staff failures, and more.


Get used to hearing a new term, “Regtech,” and how firms in that space can help fincrime compliance

The digital space is a fast-changing device, and companies who do not change with the times could lose their hold on the marketplace while banks that don’t understand available new technologies could lose out on strengthening both systems, accuracy and resources. RegTech is a new term buzzing around that refers to tech companies that can help institutions stay in compliance with regulators and various laws by better uncovering when criminals, fraudsters and the corrupt try to break them, (via BizReport).

To appease regulators, maximize AML resources, more banks turn to AI

Financial institutions (FI’s) have made extreme efforts to reduce the amount of manpower and other physical resources required to complete compliance-related processes, as well as to achieve greater productivity and profits overall. This has meant a reliance on artificial intelligence (AI) and the development of new, cutting-edge technologies to help ease some of the burdens that have come with the global movement towards greater financial security. In many cases, these new technologies have had a significant impact on the way banks and other institutions go about tackling their anti-money laundering (AML) obligations, (via Global Radar).


Cybersecurity/Virtual Currency

Former top RCMP official sees rise in cyber attacks, use of virtual currencies, but sees hoping in using blockchain tech to block criminals

Cybercrime is on the rise across the globe, and financial crimes committed through the internet make up the bulk of the problem that governments are facing as we step into the future. Canada has decided to take serious action against criminals who use the internet as a tool to commit these financial crimes, and they have good reason to. A sit-down with the former RCMP Chief Superintendent Marty Cheliak reveals the plans for current protection from financial crimes, as well as the future of cryptocurrency, and the revelation that with more requirements for AML duties, crypto currencies can be an asset to cops, instead of criminals,  (via Military Technologies).


Online fraud, cybercrimes expected to surge in 2017, says Bangkok police

Online fraud and cybercrimes are expected to grow in the next year while street crimes could shrink as Bangkok Metropolitan Police target loan shark gangs and criminals working independently, (via the Bangkok Post).


Large banks looking to lower compliance costs by automating as industry “matures”

Goldman Sachs, JPMorgan and other banks are considering or actively automating certain compliance functions to cut costs while still boosting productivity, efficiency and being able to meet their regulatory obligations. A top JPMorgan official in a recent earnings call stating the bank will be “bending down” as processes mature and move to automatic systems, (via EfinancialCareers).

China has achieved rapid economic growth over recent decades, and its banks are now among the largest in the world, but in some cases the aggressive expansion of the sector internationally has come at the expense of anti-money laundering controls, where foreign regulators have sanctioned operations for extensive gaps, (via the London School of Economics and Political Science).

Virtual currency

Qatar looking at intersection of virtual currency, terror finance

Qatar has strengthened the legal framework to tackle money laundering and terrorist financing as a preventive approach against crimes by addressing the intersection of virtual currency and terror financing, among other issues, (via the Qatar Scoop).


U.K. FCA penalties fall significantly from prior year, but firms still face compliance challenges, higher expectations

So far, in the 2016/17 financial year, U.K. Financial Conduct Authority (FCA) penalties stand at £18m compared with the total of £885m in 2015/16, but there are still clear compliance concerns for London banks in the areas of liability, gauging customer risks, and program controls, (via Lexology, citing Freshfields Bruckhaus Deringer LLP).

U.K., following lead of U.S., considering tougher corporate liability for financial crime compliance failures

Britain is considering introducing a tough U.S.-style anti-corruption regime for multinational companies and their senior executives by making them liable for failing to prevent the economic crimes of staff and agents. Ministers on Friday unveiled a range of proposals on how to crack down on corporate fraud, money laundering and false accounting as part of a consultation on how to repair public trust in businesses and improve accountability after companies have paid billions of pounds in fines for misconduct. Some suggestions include introducing U.S.-style “vicarious liability,” that makes companies guilty through the actions of staff, introducing corporate criminal negligence charges for economic crimes and broadening a section of the Bribery Act that criminalizes a company’s failure to put in place adequate compliance systems for staff and agents, (via Reuters).


Former secrecy havens now models of corruption enforcement, says WEF

Luxembourg, Japan and Sweden are the top countries most adept at tackling corruption, according to a World Economic Forum analysis. Other countries rounding out the top 10 include Denmark, Singapore and Switzerland, interesting developments as many of these countries were considered bastions of corporate secrecy, a veil that historically has helped criminals, terrorist and the corrupt move, secure and legitimize their assets through the international financial system, (via Business Insider).

Rolls-Royce to pay more than $800 million to settle global graft claims

Rolls-Royce PLC said Monday it has reached agreements in principle with prosecutors in the UK, the United States, and Brazil to settle bribery allegations and will pay about $809 million for the global resolution. In the UK, Rolls-Royce and the Serious Fraud Office reached agreement in principle for a deferred prosecution agreement that requires payment of £497 million ($599 million) plus interest and the SFO’s costs. The payments will be made under a schedule lasting up to five years. In the United States, Rolls-Royce said it agreed to pay the Justice Department about $170 million, (via the FCPA Blog).

Banks and trusts should do more to fight financial in sports, says DNB

Banks and trust companies can do more to prevent corruption money laundering and fraud in football, the Dutch central bank DNB concluded after investigating how financial firms deal with the risk of shady practices in the global sport, the Volkskrant reports, (via the NL Times).

Correspondent banking

Banks should view, analyze each correspondent relationship, not blanket judge, drop them, says Basel

Banks will have clearer guidance on how to best manage risks related to money laundering and the financing of terrorism under proposals issued today by the Basel Committee on Banking Supervision. The draft revisions aim to ensure that banks conduct correspondent banking business with the best possible understanding of the applicable rules on anti-money laundering and countering the financing of terrorism. They reflect growing concerns in the international community about banks avoiding these risks by withdrawing from correspondent banking, which may, in turn, affect the ability to send and receive international payments in entire regions, (via Military Technologies).

Terror financing

In recent homegrown, lone wolf terror attacks, counterfeit frauds have financed attacks

In many recent cases of homegrown and lone wolf terror attacks, though the story of the terrorist attacks has been well publicized around the world; the method the perpetrators used to finance their weapons is less known. How did these terrorists pay for their weapons? The answer: counterfeiting has become a preferred method to get cash and finance terror attacks in a technique referred to as transaction laundering, something merchants should be aware of, (via Finextra).


HKMA offering certifications on AML, cyber, wants officers steeped in  both disciplines

The Hong Kong Monetary Authority said it will require bankers operating in the city to be trained and certified to deal with cyber security and money laundering, beefing up its regulations to prepare for competition with Singapore to be the Asian hub for financial technology, (via


OFAC levies more than $500,000 penalty on TD Bank for Cuba, Iran, trade, securities violations

On January 13, 2017, OFAC announced a $516,105 settlement with TD Bank for 167 apparent violations of the Cuban Assets Control Regulations (CACR) and Iranian Transactions and Sanctions Regulations (ITSR). According to the announcement, beginning in 2003 or 2004, TD Bank’s Global Trade Finance business, based in Canada, engaged in a series of trade finance transactions that generally involved import-export letters of credit for TD Bank’s Canadian customers. In some cases, employees were aware of the violations, which were deemed non-egregious, (via Lexology, from Sullivan & Cromwell).