The FCA have released a thematic report on Understanding the Money Laundering Risks in the Capital Markets. The results of which are summarised in a pdf here.
The FCA have also launched a formal Handbook. Called the Financial Crime Guide: A firm’s guide to countering financial crime risks (FCG). It’s not a manual on how to do the crime but it will help you recognise what is going on and what your responsibilities are.
Obviously there are two types of Transaction data in any Suspicious Transaction (money laundering or market abuse).
Structured Data. This is typically easy to get to as it’s stored in trading systems, order tickets, market data and so forth. Analysing this data to find the Abuse Needles in the Innocence Haystack is now a multi-Billion dollar business.
Unstructured Data. This data is maybe archived (email/Bloomberg) and maybe not (instant message, FaceTime, WhatsApp) or maybe archived but difficult to parse in any meaningful way (Voice & Mobile). Analysing the entire corpus of a firms unstructured data is typically a labour intensive manual process farmed out to a junior or external company.
The trouble for Firms is that the intent for most frauds (suspicious trading, market abuse, money laundering) is hidden in the Unstructured Data, a Call here, a BBG IB there, maybe a surreptitious Instant Message or WhatsApp.
Re-constructing the suspicious trade is easy with the Structured Data but re-constructing the actual fraud is impossible without the Unstructured Data.
The FCA say as much
Voice and e-communications surveillance2.42 Firms adopt electronic communications surveillance to address risks in relation to poor employee conduct and market abuse. Some participants told us that, given the potential correlation between some market-abuse behaviours and money-laundering behaviours, electronic communications surveillance is an existing resource that may also help to identify money-laundering risk. This is particularly true if electronic communications surveillance information is used to give further context to a transaction-monitoring alert.We observed good practice where participants revised terminology or lexicons for their electronic communications surveillance systems to incorporate lessons learned from money-laundering case studies in the media, such as the Deutsche Bank case
Happily we provide just such a service in our Fingerprint Platform,
We’ve been working on the technology for 3 years now and have over 30 firms on our platform. We ingest email, Bloomberg & Voice communications (we are soon to release Slack, Teams & Skype for Business). We use a clever Text search engine that returns relevant data to your search terms rather than a relatively dimwitted database that returns precisely what you asked for. Across the data we run a set of Suspicious Term searches as well as Watch & Restricted Lists, Any suspicious communications are placed into our incident management workflow so your firm can process them and decide to take further access or not. It’s all cloud hosted so there is zero infrastructure footprint on your site.
If you would like to discuss your Unstructured Data and how it can be leveraged for MAR, AML or just better general supervision give us a call on t: +44 (0)20 3011 4145