FINTRAIL has recently launched its Financial Crime Intelligence and Investigations practice, something we’re really excited and passionate about. We believe that intelligence and investigation form critical and complementary parts of any robust financial crime risk management program. Before we explain why that is, we’ll kick off with a couple of definitions:
Intelligence: This is information about an event that you receive in advance of it happening. Examples from history include the intelligence gathering (on both sides) about troop movements in the Second World War. Examples in financial crime include receiving information from an issuing bank about an account that is purportedly connected to fraudulent transactions in another account.
Investigation: This is the process that takes place after an event occurs, and usually tries to figure out what went wrong or what is going on once a credible threat has been identified. So, following a terrorist attack, for instance, the police will launch an investigation to try to understand as much about the attacker’s background as possible, and exactly what happened to support any formal judicial or enquiry process.
Although we’ve separated out the two concepts theoretically, they are intrinsically linked with each feeding the other. To use another example, a firm might look at new typologies that criminals are developing to commit fraud, and proactively add new rulesets to transaction monitoring to detect similar behaviour before the fraud takes place. This process will flag a number of customers, some of whose accounts will need to be closed or who may be vulnerable. It might also flag other accounts with suspicious behaviour, but which appear to display a different typology. These accounts can be individually investigated, but if there are enough of theme, there may be sufficient information to identify a new typology (intelligence), and therefore a new set of rules stemming from the new activity observed - it’s a cyclical process!
So, what is FINTRAIL doing in this space? Well, we’re bringing together the leading technology and new data, along with our expertise (if you look at our Team page, you’ll see we’ve all been doing this kind of work for years!) to provide intelligence and investigations expertise as an outsourced service. In start-ups, this can help keep small financial crime teams lean while still having access to the best capabilities in this area and removing the more complex work around intelligence and investigations from the fast-paced environment of a start-up. And for more established firms, this provides access to the latest technology, and can help with resourcing challenges on a long or short-term basis. We hone in on customer protection and solid recommendations for system, rule or other structural improvements on the basis of our findings; and this is why intelligence and investigations are such a crucial part of any financial crime risk management framework, as it actively helps to inform and improve existing systems and processes, keeping them up-to-date, proactive and targeted at the most serious threats.