Combating Financial Crime: The Increasing Importance of Financial Crimes Intelligence Units in Banking
Failing to contain financial crime hits banks with the double impact of crime-related losses and fines imposed by regulators and law enforcement agencies. Banks are rising to this challenge by investing heavily in staff and technologies to run their financial crimes intelligence units (FCIUs). Their FCIUs aim to mitigate reputational and regulatory risks associated with being implicated with high-profile fraud and corruption scandals such as the Panama Papers, the FIFA case and the Bernard Madoff Ponzi scheme. When a fraud or corruption scandal breaks in the media, every bank’s board of directors wants to know immediately what their exposure might be. Some banks can answer this question straight away, but others are unable to.
This research, conducted on behalf of SAS, assesses how aware banks in Europe and North America are of FCIUs and what measures they have been taking to be more prepared for full implementation of their own FCIU. We examine how FCIUs are managed and staffed, and what resourcing challenges they face as they expand. We also investigate how banks and regulators interact and whether the way they communicate with each other and with law enforcement agencies needs to change.
The research findings reveal how banks in Europe and North America are rising to the huge challenge of trying to limit the increasing levels of organized financial crime. Nearly one in five (19 percent) of the respondents in our survey of 120 banks say they have been fined by regulators or law enforcement agencies in the past three years; of these banks, 22 percent have been fined $1 billion or more.