the full picture, this week – 18 May 2018

By Cheri Burns | May 18th 2018
the full picture, this week – 18 May 2018 | encompass blog

the full picture, this week – 18 May 2018

by | May 18, 2018 | All Blog Posts

Each week, the encompass team offer a definitive round-up of the best news and views on what’s been happening in the world of financial crime, money laundering, and Know Your Customer.

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anti-money laundering and financial crime

As always, we have news from across the globe this week, including the UK, Mexico, Malta, Hong Kong, Sweden and Austria. There’s only one place to start though, and that’s in Singapore, where the Government has been making some big announcements.


In the world of financial crime, no doubt where the big news this week stemmed from. In Singapore, the authorities launched two major papers designed to crack down on money laundering within the city-state.

Titled “Legal Persons – Misuse typologies and Best practices” and “Best Practices for Countering Trade Based Money Laundering”, the papers were launched by the Anti-Money Laundering and Countering the Financing of Terrorism Industry Partnership (ACIP). The papers contain the best practices and risk mitigation measures of industry leaders in combating trade based money laundering (TBML) and the abuse of legal persons; as well as the latest “red flags” and financial crime typologies. It is relevant to financial institutions, professional services providers and other gatekeepers alike.

ACIP has also recommended that financial institutions come together through ACIP to share data and analytics to further guard against money launderers. The story has featured across many publications across south-east Asia, including Open Gov Asia, Channel news Asia, The Straits Times and Connected to India.


Royal United Services Institute (RUSI) have written some commentary on the role played by HM Revenue & Customs (HMRC) in the fight against money laundering, offering suggestions on how they can become more effective in their role as an AML supervisor. Separately, the charitable sector has been identified as a key target for financial criminals in the UK.

A report from the Charity Commission, and reported in Third Force News, suggests charities appoint a trustee with a specific commission for risk management to help mitigate the endeavours of criminals.


Hundreds of millions of pesos have been stolen from Mexican banks by thieves using phantom wire transfers, Reuters reports.

Hackers sent hundreds of false orders to move amounts ranging from tens of thousands to hundreds of thousands of pesos from banks including Banorte, to fake accounts in other banks, the sources said, and accomplices then emptied the accounts in cash withdrawals in dozens of branch offices.


We covered last week how the OCCRP are covering the murder of Maltese journalist Daphne Caruana Galizia. In a follow up piece, the OCCRP have told how Ms Galizia death is related to the online gaming industry. The industry has reportedly been targeted by mafia groups who have used gaming platforms to launder millions of Euros, partly due to poor enforcement by the Malta Gaming Authority (MGA).

Hong Kong

A Hong Kong Government report has put the risk of money laundering within the municipality as “medium high”. The report notes that Hong Kong is attractive to money launderers due to the scale of capital flows that run through it every day. It further states that money launderers are changing their game as rules are tightened in one area, they move to another.

“So it’s basically like an air bubble under the carpet,” said Angus Young, a specialist in regulation, governance and compliance who teaches at Hong Kong Baptist University. “Once you press down on one side of the carpet the air bubble moves to the other”.


In a fascinating read in the Atlantic, journalist, Rene Chun has written on how Sweden could become one of the first countries in the world to go cashless – after being one of the first to print money in the 17th Century. The article covers how criminals are now targeting high value technology goods – and even rare animals such as owls – rather than banks or ATMs due to the lack of money. Read the full article in the Atlantic.


In Vienna this week will be a comprehensive meeting of UNODC, the United Nations Office on Drugs and Crime. The Guardian has reported on some of the more ingenious methods that criminals have used to launder money, such as selling obscure items on eBay for extortionate amounts of money; using stolen credit cards, or paying for empty rooms on Airbnb; or finding Uber drivers to are willing to do “ghost journeys”, UNODC have their work cut out in their discussions on how to prevent cybercrime and money laundering.

“Cyberlaundering is on an upward trajectory. It’s rising with the everyday use of the internet”, says Michael Perklin, a digital forensic investigator responsible for catching cyberlaunderers.

“Keeping track of the ingenious ways in which cybercriminals are utilising digitally enabled means of laundering is one of the major policing challenges of the moment,” says Dr Michael McGuire, a professor of criminology at the University of Surrey.

Finally, who would have thought that financial crime was now sexy enough to attract Hollywood A-listers? Word reaches us that Steven Soderbergh is to direct a new film, based on the Panama Papers, with Antonio Banderas, Meryl Streep and Gary Oldman.

FinTech and RegTech

Faisal Husain, writing in Banking Frontiers, has made a strong argument for financial institutions to begin utilising RegTech solutions. He writes that RegTech can be of benefit across many business functions including, identity management, fraud prevention, regulatory reporting and market surveillance. Vishal Ranjane of Protiviti agrees, writing on his blog:

RegTech is an important part of a financial institution’s digital transformation journey. As processes become more automated and more data becomes available, financial institutions need to have the right analytical tools and dashboards to comply with regulatory rules such as anti-money-laundering (AML) and know-your-customer (KYC) requirements.

Their views have been confirmed by Global Banking and Finance who have reported on the FinTech Disruptors 2018 survey. One of the key takeaways from the survey is that 60% of respondents thought that anti-money laundering and Know Your Customer (KYC) compliance was the area within RegTech that was of the greatest interest.

In Forbes magazine, Ben Cukier has suggested that FinTech companies diversify from targeting just millennials. He writes that millennials have less wealth than any other generation, and while they will (eventually) inherit money from their baby-boomer parents, FinTech companies may run out of money waiting, and so should go after them.

Following the UK Government’s appointment of David Ferguson and Louise Smith as FinTech envoys to Scotland last year, Wales and Northern Ireland are to receive their own envoys. Richard Theo, co-founder and CEO of Wealthify, will be the Welsh envoy, while his Northern Irish counteIPArt will be Georgina O’Leary, director of innovation, research and development at Allstate Northern Ireland.


As always, it’s been a busy week within the world of tech. This week we look at the use of facial recognition by UK police forces and some of the technology, that will for better or worse, impact upon the World Cup in Russia.

First up, Santander. The Spanish banking giant has announced plans to launch a stand-alone digital bank in the UK, following in the footsteps of RBS. Santander is also considering whether to bring its digital lending service Openbank to the UK, which already boasts 1.3m customers in Spain.

Pressure group Big Brother Watch, has revealed that at least two UK police forces are trialling the use of facial recognition technologies. Moreover, extensive work still needs to be done to enhance its reliability. South Wales Police, one of the two forces who confirmed its use, alongside the Met, said that the technology made 2,685 “matches” between May 2017 and March 2018 – but 2,451 were false alarms. More information can be found in a report from Big Brother Watch.

Shortly after releasing a report into cyber-crime the National Crime Agency has released its strategic assessment into organised crime, noting that technologies such as “the dark web, encryption, virtual private networks (VPN) and virtual currencies will support fast, “secure” and anonymous operating environments, facilitating all levels of criminality.”

The BBC has found an interesting angle on new technology within the UK, noting that the UK leads the way in “compassionate” technology. The Beeb reports on a company called Beam that helps disadvantaged individuals by using social media to match individuals with sponsors to help them gain skills or employment.

While we may be salivating over the promises of Elon Musk to send humans to Mars within a decade, consider this. What if the next outposts in space are built, not by humans, but robots. Geek has the full lowdown.

World Cup Tech

You may not have noticed, but it is only 26 days until the World Cup and this World Cup is more technology focused than any other that has gone previously. Firstly, UBS bank has been crunching the numbers and has declared who will win the competition. Find out here who will win, and which country will come as high as fourth. FIFA is allocating two tablets to each team to see real time tactics, positional data and video footage. There’s no way that won’t lead to some irate managers.

On to the technology that will impact upon fans now. Government Communications Headquarters (GCHQ) has warned England fans not to connect to mobile hotspots or VPNs for fear of their data being hacked or compromised, reports the Telegraph.


“HSBC and ING have conducted their first live, commercial trade finance transaction on blockchain, for agrifood trading giant Cargill” report GT Review. Poland is set to become the first country in the world to put all its banking records on the blockchain.

Coincentral have also reported on the impact that blockchain will have on the global economy, possibly confirming the Polish decision as a good one. And the question being asked by Brink News is whether blockchain can reduce the possibility of cyber-crime within financial services, noting that there are indeed positives, but also negatives, to the use of blockchain.

artificial intelligence

We have a number of different takes on the impact artificial intelligence will have upon the planet in this week’s roundup of the top AI news, including how it will affect religion, reshaping of jobs, and asking whether AI has a race problem…

Confession Chatbots, Catholic robots named Bless-U2 and an app called Muslim Pro… CNBC have the latest on how AI will shape religion in the future.

Do AI and computer algorithms have a race problem? Artsy looks at some examples of how AI is shaped by, and therefore designed to work for, white males.

“Data sets reflect the hierarchy in which we live,” said Kate Crawford, an artificial intelligence expert at NYU, at a recent research and development salon at the Museum of Modern Art. These biased algorithms and skewed data sets “reify what are fluid social categories,” she said, making the white man the online default, the norm. (Type “CEO” into Google image search and you’ll see an endless mosaic of suited white guys.)

In Finextra, Michael Davison of Atos considers how AI and data will shape the future of financial services.


The argument for and against cryptocurrencies continues to rumble on. Let’s check out the latest developments…

In Project Syndicate, Nouriel Roubini, says they are very definitely not the answer.

Of course, the crypto-cartels would counter that customers who incur the cost of buying a token will benefit if that token appreciates in value. But this makes no sense. If the price of the token rises above the market value of the good or service being provided, then no one would buy the token. The only plausible reason for forcing the use of a token, then, is to hike prices or bilk investors.

Ever wondered how the owners of cryptocurrencies keep their cryptographic keys secure? The same as real money, in a vault. Read more (with some eye catching pictures) in Quartz.

Is Facebook considering launching its own coin? Business Insider has the story.

Thailand has begun regulating cryptocurrencies in order to prevent against money laundering and cybercrime.

A new study has shown that Bitcoin mining continues to use a tremendous amount of energy, and by the end of this year, could be as high as half a percent of the world’s electricity consumption.


Harvard Business Review features an article on how factories will need better processes in place, for both robots and humans in the future. Banking Technology follow this up by examining the benefits of intelligent process automation (IPA), including, cost and efficiency savings, reduced risk, scalability and flexibility and better accuracy and quality.

supply chain

Within supply chain, the big story continues to be the fall-out from President Trump’s decision to remove the US from the Iran deal. A number of companies who had begun to move back into Iran are now likely to find themselves facing sanctions from the US Government as a result. France has been particularly vocal on the subject, as a number of French companies had moved back into the region following the deal’s completion. EU leaders met Wednesday in Sofia to try and find a solution. Danish company Maersk has already pulled out of the region reports the Guardian.

Gulf News and CNBC consider whether EU leaders can salvage the deal. Iran has reportedly asked China to continue buying its oil, as the US decision has impacted upon oil prices. In other news, manufacturing has come top of a list of industries most under threat from hackers, representing 46% of all cyber attacks in 2017 report TEISS.

“We’ve seen manufacturing becoming an increasingly attractive target to attackers in recent years and we believe this is for a number of reasons,” explains Jon Heimerl, senior manager of the Threat Intelligence Communication Team, Global Threat intelligence Center at NTT Security.

The world of Know Your Customer (KYC), compliance and financial crime never sleeps, and if your challenges are keeping you up at night let us help. encompass robotically automates information and news discovery for KYC requirements for onboarding, event-driven refresh and remediation. Driven by your internal policies, our platform automatically constructs corporate ownership structures, discovers beneficial owners, and in minutes screens all relevant entities and persons for regulatory, reputational and financial risk.

Author: Cheri Burns
LinkedIn Profile | Cheri Burns

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