Preventing Financial Crime in Banking and Payments - Journal

In the times of the global pandemic and beyond, financial institutions need to ensure the safety of their customers’ data and money.

What can companies do to detect and prevent Financial Crime in Banking and Payments, especially against the background of COVID-19?

More than ever, Financial Institutions have a crucial role to play to keep their customers and communities where they have a footprint safe from money laundering, tax evasion, fraudsters and scammers.

To this effect, there are a series of steps they can follow, preferable within a framework of private and public partnership as fighting financial crimes must be done from various fronts and not a single one in isolation.

Create and maintain detailed customer profiles so it is easy to detect normal from suspicious behaviour, while keeping a smooth customer journey
Educate customers in best practices for good digital safety (especially for Fraud Typologies, but also to avoid being involved in Mule schemes for example)
Combine inbound/outbound payments monitoring and apply advanced analytic techniques to maximise efficiency (e.g. try to evolve from fixed rules into more dynamic solutions)
Capitalise on relationships with Regulators, Law Enforcement and Providers, in order to align all effort and use the adequate tools
Develop intelligence functions that are capable to detect new trends and typologies so the relevant controls can be adapted to face emerging threats. Also use these teams to enhance situational awareness using non-traditional sources such as Open Sources

How to best manage the huge amount of data to provide enhanced analytics for Financial Crime?

As General and President Eisenhower said once “plans are worthless but planning is everything”. Given the huge volumes of data financial institutions collect and collate, it is very difficult to try to monitor absolutely everything. A risk-based approach must be adopted and part of that approach is defining the Financial Crime Typologies.

These Typologies will drive the relevant collection plan, where data will be sourced from the systems and across the markets we closely monitor. This is especially important in organisations with a wide footprint, as they generate huge amounts of data and are subject to different risks.

How can companies prepare for more Financial Crime risks that come with further digitalisation?

This is closely linked to the previous question. Building a Typologies library is the first step to drive a risk-based approach mentioned above. The next is ensuring those Typologies are reviewed and updated (especially against the backdrop of major events like the COVID-19 pandemic) and more importantly, develop a function within financial crime risk that can identify and manage emerging risks.

All these elements should converge towards a data-driven risk management that can support not only Financial Institutions internally but have a positive impact in the societies they engage for business.

Join Francisco as he delivers his speech on Applying Advanced Analytics in Financial Crime Prevention and Detection during our 10th Annual Digital Banking and Mobile Payments Summit coming up this April!

Visit event website

Francisco Mainez is the Head of Data and Analytics for Wealth and Personal Banking Financial Crime Risk at HSBC. Francisco leads a team that supports all activities related to data extraction, analysis and insight reporting, covering Money Laundering, Financial Crime Typologies, Operations, Customer Due Diligence and Tax Evasion, among other areas. His team is also heavily involved into moving towards Advanced Analytics solutions for Financial Crime.
While in HSBC, Francisco has also worked in other Financial Crime Teams, such as the Financial Intelligence Unit and Compliance Reporting. Prior to HSBC, Francisco fulfilled roles in Standard Chartered Bank in London and Singapore after completing several tours of operations in Military Intelligence for NATO and the European Union in different geographical locations.
Francisco holds a MSc in Information and Knowledge Management and a BSc in Politics and International Relations from the University of London-LSE, along with several professional certifications: CAMS, CISI Investment Operations, CFCI (Certified Financial Crimes Investigator) and SAFe (Scalable Agile Framework). In his spare time, Francisco likes to read history books or ride motorcycles.