Crime costs the UK an estimated £24 billion a year, and most of the proceeds are concealed through banks and investments. By money laundering, criminals can expand their operations and increase profit, as well as finance terrorist activity. The National Crime Agency states that £90 billion in crime proceeds is laundered through the UK each year.
Money laundering has a huge impact on wider society, beyond simply enabling crime itself. It drives up property prices, insurance premiums and interest rates, and costs regulators, businesses and governments precious budget pounds in their quest to combat it. UK banks alone spend around £5 billion a year in their attempts to prevent financial crime, which is £1 billion more that the entire UK prison budget.
The Financial Conduct Authority’s (FCA) Executive Director of Supervision Megan Butler, has recently encouraged the financial sector to be open to using more technological methods to combat money laundering as opposed to relying simply on regulatory tools and manual supervision.
The FCA believe that there is huge scope to make more use of technology within transaction monitoring, but tech could also be better employed in onboarding, maintenance, client screening and reporting.
Cybercrime now makes up nearly half of all crime in the UK, highlighting the need to use more high-tech and advanced methods to fight lawbreaking. And by utilising advancements in machine learning, AI, natural language processing and robotics, money laundering could be much better managed and prevented.
Butler stated that many in the financial sector are reluctant to use more advanced techniques, for fear of failing to meet legislative requirements, or simply the difficulty of adding new software to reliable, yet unwieldy and outdated, systems.
But Butler has reassured firms that the use of new tech would be and should be embraced, offering up support and advice to those wishing to try new things. She encouraged people to speak out if they discover anything that might help. “If there are any methods, innovations or technologies that help you combat crime, tell regulators about them – and do not be afraid to move first.”