Building on our commitment to drive positive change through data and insight, Refinitiv has joined the UN’s Task Force on Digital Financing, the global task force charged with recommending strategies to harness the potential of financial technology.

 

We are in full support of the G20 Action Plan to promote and support the UN’s sustainable development goals (SDGs) and its clear objective to ‘ensure that no one is left behind in our efforts to eradicate poverty, achieve sustainable development and build an inclusive and sustainable future for all.’ We will continue to work tirelessly to help further the achievement of these global SDGs and deliver innovative solutions to pinpoint risk and criminal activity at every level. 

 

“Digital innovation is stepping up
to the plate with new solutions which help organisations to pinpoint risk and eradicate financial crime within their own operations.”

Counting the cost

Financial crime, including bribery and corruption; money laundering; fraud; theft; cybercrime; and slave labor/human trafficking, is pervasive: Refinitiv’s 2018 True Cost of Financial Crime survey1 revealed that nearly half (47%) of respondents had fallen victim to at least one form of this crime in the preceding 12 month period. In financial terms, these crimes led to an estimated US$1.45 trillion in lost turnover, but the cost does not end there. Critical social and humanitarian consequences impact the lives of millions of individuals across the globe on a daily basis – for example, estimates reveal that 40.3 million people remain trapped in modern day slavery. Moreover, there is the opportunity cost of illicit funds diverted from legitimate economies to consider. Our collective inability to combat financial crime and halt the illicit financial flows that it facilitates correlate with exponentially rising environmental crime and an international lack of success in achieving the SDGs that are aimed at halting the global biodiversity loss that will impact every country, every society and every individual.

 

Digital innovation – a double-edged sword

Part of the solution lies in each individual organization taking targeted steps to pinpoint risk and eradicate financial crime within their own operations – and digital innovation is stepping up to the plate with new solutions to help organizations achieve this, but this same technology is, of course, also available to ever-more sophisticated criminals. Digital innovation can help to reduce illicit financial flows by, for example:

  • Enhancing the exchange of information, which in turn promotes transparency 

  • Improving companies’ ability to identify suspicious behaviour more quickly and more accurately

  • Enabling organizations to maximize their resources and work smarter, for example by recognizing patterns of behavior that could indicate potential risk

  • Promoting efficiency in a cost effective manner, for example by enabling governments to conduct digital investigations

  • Improving public scrutiny and offering individuals access to improved ways to report suspicious behavior for the benefit of society

The caveat is that digital technologies can also facilitate crime. For example, such technology can allow the easy creation of online criminal networks that transcend traditional boundaries, and can facilitate the frictionless transfer of illicit funds via digital currencies. Anonymous online activity can also facilitate crimes such as tax evasion. The private sector therefore has a critical role to play in actively embracing the innovation on offer and taking concrete steps to fight financial crime. It is encouraging to note that globally 97% of respondents in our 2019 survey2 of over 3000 managers with compliance-related responsibilities believe technology can significantly help with financial crime prevention and, moreover, 60% across the globe are prioritizing automation and digitization for investment. However, a change in the prevailing mindset is needed – 67% of respondents are hesitant to report financial crime incidents externally as this may sour relationships. Trusted data and collaboration At Refinitiv we believe that clean, complete and reliable data, combined with invaluable human expertise and the right technology can create a powerful combination to identify risk and criminal activity. We further believe that collaboration and the open sharing of such data are crucial to realizing the potential of innovation, particularly between tech companies, governments and financial institutions and are encouraged that this view is supported by the US Financial Crimes Enforcement Network (FinCEN) and its regulatory partners’ joint statement encouraging banks and credit unions to take innovative approaches to combating money laundering, terrorist financing, and other illicit financial threats. 

 

1. Download the 2018 True Cost of Financial Crime survey

2. Download the 2019 Innovation and the fight against financial crime report

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