Financial crime threat evolves as fraudsters’ techniques get more sophisticated

Refinitiv, a global provider of financial markets data and infrastructure, has released its Financial Crime in sub-Saharan Africa Report 2020, which highlights several noteworthy compliance trends. Responses show a high level of awareness of financial crime and a desire to upgrade compliance systems. The survey highlights that the crime threat continues to evolve, with techniques used by organised crime groups and fraudsters becoming more diverse and sophisticated.

According to the findings this year, more than 28 percent of respondents recognise that driving internal behaviour change within their companies is their primary challenge, 61 percent expect a substantial increase in their compliance investment, 74 percent have a Know Your Customer (KYC) program, while 66 percent embraced innovative compliance technology.

Only 43 percent indicate they have a sanctions program despite the growth in regulatory risk, especially in the area of ‘green crime’. Sub-Saharan Africa is home to a diverse range of wildlife and plants, as well as natural resources, and this has increasingly become the target of organised crime. We note that there is a robust regulatory response to green crime, thus increasing regulatory risk. The EU has included environmental crime as a predicate offence under the 6th EU Anti-Money Laundering Directive (6AMLD); and the Financial Action Task Force (FATF) priorities for 2020 will focus on illegal wildlife trade.

According to the report, sub-Saharan Africa based organisations should be especially vigilant, and it is encouraging to see that organizations are striving to meet the regulatory challenge. “Africa is at the forefront of embracing mobile technology and is host to more than half the world’s mobile money services. With this increased mobile access comes the threat of identity theft and money-laundering. In response, digital identity technologies, including those of Refinitiv, are quickly evolving to meet this need and as our survey reports, a quarter of respondents have already adopted digital identity solutions,” said Nadim Najjar, the MD for Middle East and Africa, Refinitiv.

“The shift towards digitalization is a theme that comes through very clearly in our report. The pace of this transformation is likely to have accelerated in response to Covid-19 and it is unlikely to diminish once we exit the pandemic,” he added.

Najjar concluded that forward-thinking compliance functions will be focussed on how they can best make the transition towards digital channels and tools, while ensuring the needs of their business and customer base are accounted for and their regulatory requirements are fully addressed.

Refinitiv provides financial markets data and infrastructure, serving over 40,000 institutions in over 190 countries. It provides data and insights, trading platforms, and open data and technology platforms that connects the global financial markets community – driving performance in trading, investment, wealth management, regulatory compliance, market data management, enterprise risk and fighting financial crime.

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