Preventing money laundering and terrorist financing, new challenges in the banking sector

Despite being two totally opposite realms, the digital world and life in the analog world not only coexist, but are interconnected. Money laundering is one of the crimes that has experienced greater adaptation to the digital world, thus becoming one of the booming cybercrimes. In this sense, Vector Management Consulting, a company owned by Vector ITC Group, has developed a product to help banks quickly identify these crimes.

“Money laundering is becoming one of the most growing criminal acts in the digital world, a 55% in recent years. Therefore, it is vital for both financial and credit institutions and e-commerce to find ways to identify customers who potentially want to carry out this type of practice before they are effective.“, explains Jose Miguel Cortina, Director General of Vector Management Consulting

Uptick in money laundering

Money laundering refers to the series of procedures and mechanisms for giving legality and placing on the market assets from criminal activities. The proliferation of such activities is based on one fact: since the beginning of the crisis the volume of the submerged economy in Spain stands at around 20% of GDP, according to Randstad, almost doubling the values (just over 10%) of 2007. This data not only reflects the upward trend towards the practice of these facts, but also emphasizes the ineffectiveness of anti-money laundering and prevention measures, especially in the online world.

The current environment of internal control of the financial system in the world has changed and continues to change at great speed. It has gone from having to “manage risks” to trying to at least know or “narrow down uncertainties”. Full certainty in prevention no longer exists. The money was digitized and the legal tender materialized in banknotes came to the fore against the millions of daily transactions that coexist in the international financial sector.

“Banking has always been and should continue to be the leading example of financial economic crime prevention,” says Jose Miguel Cortina. In this sense, control systems for the prevention of laundering of the twentieth century are already history and it is necessary to harmonize the technological developments of financial products with analogous internal control.

Possible criminal liability for recklessness

Along with the development of technologies, part of the world seems to mutate into a more responsible and less corrupt consciousness. The laws are evolving in this sense and the responsibilities for wrongdoing are placed in the subjects that make up this society of the 21st century. And in this context, two of the crimes to pay particular attention to are money laundering and the financing of terrorism. “Under certain parameters of occurrence, responsibility, even by recklessness, lies with the organization itself as an autonomous entity and its highest governing bodies. Therefore, prevention awareness must be real and evidenced,” they add from Vector Management Consulting.

Earlier this year, the European Union (EU) states gave the go-ahead to the new rules that reinforce the anti-money laundering and terrorist financing directive, a proposal that Brussels pushed in response to terrorist attacks in Europe and the “Panama Papers”.

Under the new rules, access to records on the actual owners of the companies, those who, regardless of whether or not they are owners, are the true beneficiaries of them, will be expanded. In addition, state financial authorities will have access to centralized records of banks and accounts to identify their holders, thereby enlaging to improve cooperation between countries in the fight against illegal financing and terrorism.

Vector Management Consulting Proposal

Faced with this scenario, from Vector Management Consulting, they propose solutions that allow:

  • Understand the new products and relevant new risks associated with them
  • Having technology to assist in these activities
  • Be aware of the regulations to be applied at all times to avoid sanctions and even recklessness
  • Seek reasonable safety along with efficiency that accompanies business development with the development of control in an evolving couple
  • Finally, have reasoned and reasonable information on risk control associated with the PBC and the FT that allows the development of the business by reducing as far as possible the current areas of uncertainty generated by:
    • A technology in continuous and rapid development,
    • In constant regulation and legislation
    • A digital internationalization that mixes disparate cultures and above all:
    • The obvious sophistication of organized crime and terrorist groups.