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ACFCS, and BAE Systems host relevant and timely “Future of Financial Crime” event

Wednesday, March 6, 2019   (0 Comments)
Posted by: Natalie Moore
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Professionals converged on MIT campus for half-day session exploring impacts of legalized marijuana, machine learning analytics, blockchain and other emerging issues in compliance and investigations


The Association of Certified Financial Crime Specialists (ACFCS), a BARBRI Professional Association, and BAE Systems Applied Intelligence, took an important step in arming financial crime prevention professionals to successfully face an increasingly complex landscape, hosting the Future of Financial Crime seminar.


Private sector professionals gathered at the Massachusetts Institute of Technology (MIT) to hear from and interact with global experts, including representatives from the Office of the Comptroller of the Currency (OCC) and Department of Homeland Security, on emerging threats and opportunities. Among the important topics covered by the sessions were challenges faced with banking marijuana-related businesses, alert monitoring, new rules in beneficial ownership and the impact of blockchain and cryptocurrency on compliance.


“The rise of new technologies, along with trends such as legalized marijuana, have profound impacts on the financial crime prevention profession,” said ACFCS President Joseph Yerant. “The real challenge for professionals lies in understanding what exactly the emerging technologies and trends mean for their organizations and compliance programs. This session was about demystifying and helping professionals understand the practical applications of machine learning analytics, blockchain and other tech in financial crime compliance, and diving into timely challenges facing financial institutions.”


The day’s initial session explored the state of the multi-billion-dollar legal cannabis industry and the state/federal law conflicts that present challenges for financial institutions to serve this rapidly growing and profitable marketplace.  Panelists David B. Chenkin, Managing Partner, Zeichner Ellman & Krause LLP, and Robert Goldfinger, Global Expert, Financial Crimes Solutions, BAE Systems Applied Intelligence, provided insights on how to approach marijuana-related businesses as customers, and an update on the impact to BSA/AML programs, including reporting requirements. The panel also covered technology tools that may be relevant in the industry.


“The landscape of legalized marijuana presents banking institutions with unique and sometimes contradictory challenges,” said ACFCS Vice President, Product, Brian Kindle. “It was extremely useful to hear from experts on how to balance the banking ‘customer’ viewpoint with strict compliance to BSA/AML laws and gain some actionable insights professionals could put into practice right away.”


Richard Graham, Head of Business Solutions Consulting for BAE Systems Applied Intelligence, provided audience members with a past, present and future perspective on alert monitoring in financial institutions. The presentation offered a grounding in monitoring practices amidst an environment of inconsistency across organizations and emerging technologies. It also looked ahead to current and emerging challenges, including dealing with increasingly large volumes of data in monitoring programs and implementing machine learning.


In May 2018, the Federal Financial Institutions Examination Council (FFIEC) issued new procedures on the beneficial owner rule and Customer Due Diligence (CDD). Against that backdrop, renowned speaker, Craig Hirsch, bank examiner and BSA/AML Specialist with the OCC, provided insight on bank examiner expectations and discussed key issues and trends the OCC is seeing at financial institutions.


“Hearing the bank examiner perspective and having the ability to address questions directly to a representative of the OCC such as Craig is invaluable for professionals in banking compliance,” said Yerant.  “Gaining insights as to the consistent issues within institutions the OCC is coming across and understanding the method behind the revised rules can help them better protect their organizations and comply more efficiently.”


The day’s final session addressed cryptocurrencies and blockchain technology from both the law enforcement and financial institution perspective. Henry Basile, Supervisory Special Agent, Homeland Security Investigations, Doug McCalmont, senior AML solutions consultant, BAE Systems Applied Intelligence, and Robert Bench, Chief Compliance Officer with Circle Financial, provided the differing perspectives on these technologies.  


More adoption and innovative blockchain solutions have brought the crypto world into the mainstream, but the criminal element continues to exploit cryptocurrencies. McCalmont did a deep dive on how blockchain technologies will impact the financial system, including introducing some interesting applications for digital identity and customer due diligence. On the flip side, Basile gave some insights into how the criminal element is exploiting cryptocurrencies, and the watch-outs for financial institutions. As the head of compliance for cryptocurrency exchange and payments firm, Bench offered a perspective from inside the industry, describing how crypto companies were deploying increasingly rigorous compliance programs.


“The feedback from participants was extremely positive around the content and the presenters,” said Yerant. “If we can provide the knowledge and access to experts that enables professionals to do their jobs better, we’ve accomplished what we set out to do. We plan to host future sessions with other topics of interest to our members and other financial crime professionals in the coming months.” 

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