The Future of FinCrime & Compliance: Key Takeaways for 2023

Exiger recently sponsored the Future of FinCrime & Compliance Conference put on by the International Compliance Association (ICA). The event, held May 12 in London, is an annual gathering for industry leaders in the UK and across Europe to benchmark strategy and best practices on how to stay efficient and vigilant in today’s ever-changing financial ecosystem.

Left to right: Neil Whiley, Emma Hardaker, Luke Jewell, Merlin Linehan, Samar Pratt

Sanctions: Learnings from Russia and Managing Future Geopolitical Risks

Navigating the multitude of Russia sanctions has been a challenge for many businesses this year. The international complexity and geopolitical concerns already created a demanding environment, but the speed at which these sanctions came into play was the main issue.  It exposed a major scarcity of experienced professionals in the field and led to a major push to increase capacity, enhance capability and upskill workers.

Samar Pratt, Global Head of FCC and Advisory Solutions at Exiger, noted the biggest challenge was figuring out how to best help our clients by quickly and adapting our products and services in a way to help them most.  We found some companies had great KYC & CDD frameworks but lacked sufficient capacity to deal with such an uptick in volume of alerts. For these clients, we were able to offer help via our Managed Services, providing an experienced group of analysts to help support the already established risk management program. For other clients, the Russian sanctions highlighted a weak KYC & CDD framework and a poor understanding of sanctions risk exposure. Exiger’s Advisory Team was able to respond to this by assisting with remediations and program designs.

Looking to the future, it’s evident sanctions will continue to become even more complex.  Horizon scanning has identified China as the next region of concern, albeit there is more uncertainty about whether there will be the same level of alignment among countries as there is for Russia. With such a major financial and economic foothold, imposing sanctions on China would undoubtedly trigger many knock-on impacts.

It is crucial to prepare for the potential consequences of any future sanctions event, and financial institutions should learn from others the importance of KYC and screening in this area. By staying proactive and continuously innovating, businesses can navigate the intricate landscape of sanctions regulation successfully.

Innovation with Constraints: Improving Compliance in the Illegal Wildlife Trade

Another interesting discussion focused on remaining responsive to changing regulations, as well as new and emerging threats. Illegal wildlife trade (IWT) is a crime rarely discussed in the FCC world, despite its prevalence today. Two speakers shared their insights on how financial institutions can drive continuous improvement in compliance by combatting the illegal trade.

As it stands, IWT is the fourth largest means by which criminal funds are moved, benefiting from its immense international footprint.  To increase awareness on the gravity of this issue, the Financial Action Task Force (FATF) has recognized IWT as a predicate crime to money laundering, and countries that fail to comply risk being grey-listed.

The financial sector’s international presence facilitates the speed and quality of knowledge sharing in a way that governments cannot. Although every company’s potential exposure will be different, adopting the language of the financial sector can enable corporates to understand the associated risks of IWT and the importance of having a robust ESG framework in place.  IWT is not solely an ESG concern — or merely limited to poaching — and every institution should ensure they’re not exposed to any of the financial flows associated with IWT.

It’s crucial to recognize that IWT is not an isolated threat; it demands our concerted efforts to combat it effectively. It is considered a severe financial crime intricately linked to other organized criminal activity, such as the arms trade and trafficking. Companies must take this into account when considering what factors may drive their Supply Chain Risk Management (SCRM). 

How Exiger Can Help

Exiger’s Supply Chain Explorer provides a means to address these diverse risks and develop a future-proof supply chain risk management solution for any company.  Our platform can help companies meet the urgent imperative to protect global supply chains from various risks, including those related to IWT.

Exiger is revolutionizing the way corporations, government agencies and banks navigate risk and compliance in their third-parties, supply chains and customers through its software and tech-enabled solutions. Exiger’s mission is to make the world a safer and more transparent place to succeed. Emboldening its 550 customers across the globe, including 150 in the Fortune 500 and over 40 government agencies, with award-winning AI technology, Exiger leads the way in ESG, cyber, financial crime, third-party and supply chain management. Its work has been recognized by 40+ AI, RegTech and Supply Chain partner awards.