November 23 2016
When it comes to money laundering, the criminals are winning. More than $1tn of illicit financing moves through the financial system each year. Only 0.2 per cent of those proceeds are seized by authorities, making the financial crime industry the largest and most profitable in the world.
Since money laundering enables pernicious crimes such as bribery and corruption, human trafficking and terrorist financing, it is essential for banks to improve their detection and reporting of suspicious activity to law enforcement. Such efforts are under way but they require broad public and private support to transform the financial system into a hostile environment for criminals and terrorists.
At the centre of the problem — and the solution — are “suspicious activity reports”, which are filed with the government when a bank suspects that funds are the proceeds of criminal activity. Various factors have had the unintended consequence of banks promoting the quantity of SAR filings over their quality.