Conversations

Conversations: Ross Delston, Attorney & Expert Witness

Course Duration: 30 minutes
Course Points: 
30

On Fridays with Fintelekt this week, host Shirish Pathak, Managing Director, Fintelekt is joined by Ross Delston, Expert witness, attorney & former US banking regulator (FDIC), who shares his varied experiences in policy responses to trade-based money laundering and trade-based terrorist financing, anti-corruption, corporate transparency and the risks from new technologies.

Our key picks from this interesting conversation full of anecdotes and experiences from Ross’s long career are: 

  • There hasn’t been much progress in combating TBML and that all elements in the trade supply chain should be covered by an AML programme, and made to file STR reports to achieve any tangible results. 
  • Ross compares the new AML law in the US, especially in the area of public access to beneficial ownership registries, with that across the European Union, India and other countries.
  • On NFTs and ICOs, he believes speculation may be a more important issue than money laundering fuelled by the huge rise in prices of various classes of assets over the years.
  • Conviction rates in money laundering are often low because understanding the flow of money, and especially explaining it to a jury, is difficult and it may be easier to prosecute the predicate crime rather than money laundering.

For more expert comments, please view the entire episode. 

Conversations: Dr. J. Michael Skiba, International Financial Crime Expert

Course Duration: 21 minutes
Course Points: 
20

Fridays with Fintelekt today features J Michael Skiba, international financial crime expert, with host Shirish Pathak, Managing Director, Fintelekt Advisory Services in a conversation around fraud. Michael, popularly known as Dr. Fraud, has had several years of experience helping individuals and corporations become safer against frauds, scams and schemes.

Michael’s experience shows that in the financial services sector, fraud is more a matter of opportunities, as 96% of people committing fraud have no criminal history. He says that the Covid-19 pandemic has changed many aspects of the ecosystem due to the transition to work from home, creating gaps in data security and increased stress on companies. This has also reduced the personal thresholds at which people respond to an opportunity to commit fraud.

With increasing automation and the use of technology, his concern is that the human element in fraud management is getting lost. Corporations need to continuously train people and build expertise in running automated platforms. He recommends the creation of a task force with people across various departments to share insights and create a sense of synergy and cooperation in fighting fraud.

To develop a strong deterrent against fraud, Michael feels that it is not just the creation of laws, but the support and proper enforcement of the laws that is critical. The lack of information sharing is another challenging aspect of fraud detection that needs to be addressed.

Listen to the entire episode for more insights on organisational culture, criminal behaviour and rationalisation of fraud from his book “The Psychology of Fraud”. 

Conversations: Jessica Davis, Insight Threat Intelligence

Course Duration: 36 minutes
Course Points: 35

Fridays with Fintelekt today features Jessica Davis, President, Insight Threat Intelligence, an expert on terrorist and illicit financing, with host Shirish Pathak, Managing Director, Fintelekt Advisory Services.

Jessica explains the implications of the complex situation in Afghanistan, and the likely evolution of Al Qaeda, ISIL-KP, their own strategic objectives and their relationship with the Taliban in the region. All of these groups are drawing resources from Afghanistan, but counter terrorism financing (CTF) options with the global community are fairly limited, especially without any CTF forces on the ground. 

On CTF methods in general, Jessica strongly believes that all of the current measures have negative externalities, and that as a CTF community, some of the human rights or financial implications of CTF measures may have been glossed over. There is a need for the AML/CFT community to take a long hard look at regulations and recommendations and ensure that they are tied directly to observable and prevalent terror financing mechanisms.

Jessica is the author of the highly rated book Women in Modern Terrorism (2017) and is slated to publish another one Illicit Money: Financing Terrorism in the 21st Century in September 2021. In the conversation, she also speaks about the motivation behind her research and the various perspectives she has explored in her books. 

Visit the website of Insight Threat Intelligence https://www.insightthreatintel.com/ for more insights and analysis around Jessica’s work and the books she has authored.

Conversations: Shawki Ahwash, North Africa Commercial Bank

Course Duration: 23 minutes
Course Points: 20

This week Fridays with Fintelekt hosted by Shirish Pathak, Managing Director, Fintelekt features Shawki Ahwash, Head of AML/CFT & Sanctions Division, North Africa Commercial Bank from Beirut, Lebanon.

A career banker, Shawki enjoys sharing the knowledge that he has gained with others through training and teaching. He feels that AML/CFT is a dynamic and evolving field and technology has changed everything about it – be it onboarding, profiling or monitoring of customers and transactions.

During the Covid-19 pandemic, banks have had to take proactive measures to combat fraud and cybercrime and have had to sensitize their clients. The need of the hour is to upgrade and re-skill front-line staff that is dealing directly with the customer.

For AML/CFT to become more effective, he recommends that banks and financial institutions conduct a separate risk assessment for sanctions and AML, ascertain the quality of data to reduce false positives and move away from filing defensive STRs. High quality STRs which provide the underlying predicate offence, an elaborate narrative, profile of clients and the circumstances of the transaction to the extent possible will contribute to the regulator’s database and aid the understanding of newer trends and typologies.

On the new AML law in the UAE, Shawki thinks that many Arab or GCC countries may copy some of the steps – around screening, targeted financial sanctions, DNFBPs, etc. – to fortify their regulatory environment on anti-financial crime.

For many regional trends and insights on crypto, financial inclusion, screening, and others, tune in to the entire episode. 

Conversations: Bharath Vellore, LexisNexis Risk Solutions

Course Duration: 32 minutes
Course Points: 30

This week on Fridays with Fintelekt, Shirish Pathak, Managing Director, Fintelekt is in conversation with Bharath Vellore, Managing Director, APAC, LexisNexis Risk Solutions on a variety of issues within financial crime compliance and the role of technology.

Some insights shared from Bharath’s decade-long experience working with Accuity and now with LexisNexis:

– There is a lot of progress in the awareness of money laundering risks across sectors and across types of institutions. While banks have had years of experience and knowledge around compliance, the intent to comply is present within newer sectors like fintechs or DNFBPs. They may have a much shorter learning curve to reach the maturity level of banks.

– Now more than ever, technology is becoming the most important tool in the kit to address compliance, and to gain on 3 Es – viz. Efficiency, Effectiveness and Explainability.

– There is growing awareness amongst banks as well as freight forwarders and cargo companies on the risks from trade, but there is more to be done on digitising trade information flows.

– Mule accounts are risks of a unique kind that overlay the world of fraud and financial crime, and will require efforts and information flow across these two departments, often working in silos in financial institutions.

– A collaborative approach by regulators is the best way for them to get a deeper understanding of emerging technologies in the fintech or crypto industry, and for industry players to get the confidence of being aware of the risks, the gaps, and the compliance required.

For many more interesting nuggets, listen to the entire episode. 

Conversations: Sofia El Mansouri, Compliantly LLC

Course Duration: 21 minutes
Course Points: 20

This week on Fridays with Fintelekt, Shirish Pathak, Managing Director, Fintelekt converses with Sofia El Mansouri, Compliance Consultant from Morocco, also known as The Compliance Lady.

Anti-corruption and the impact of the Covid-19 pandemic feature primarily in this episode, with Sofia explaining noteworthy developments and global anti-corruption initiatives over the last few years. She specifically emphasises the role of the non-financial sectors and professional enablers in transnational corruption and whitewashing of financial crime proceeds.

The impact of the pandemic has been significant and raised considerable risks of questionable commissions, kickbacks, over inflated prices, and facilitation payments, even as policy makers and governments are consumed with urgent relief and such priorities, rather than dealing with corruption.

Sofia calls the ‘Biden Memo’ (the National Security Study Memorandum recently introduced by the US) a game-changer, expected to bring in reforms not just in the US but possibly also elsewhere as more countries follow suit. She advises the compliance community not just within financial institutions but also investment advisors and professional service providers such as lawyers, accountants to take proactive steps to prepare for increased AML enforcements and more stringent regulatory requirements.

For more expert insights on this topic, watch the full episode. 

Conversations: Leah Callon-Butler, Emfarsis

Course Duration: 30 minutes
Course Points: 30

In this episode of Fridays with Fintelekt, host Shirish Pathak, Managing Director, Fintelekt Advisory Services is in conversation with Leah Callon-Butler, Director, Emfarsis on cryptocurrency and blockchain adoption, its challenges and potential benefits to society.

Leah’s company Emfarsis, helps early stage companies with their product to market fit. She says that often when a new technology is evolving, it isn’t clear to consumers how it can solve their needs. The same goes for blockchain and cryptocurrencies and Leah works to tell the right stories about how this technology can improve people’s lives. 

An example is her video about the Play to Earn NFT game – Axie Infinity – which has garnered considerable popularity amongst people affected by the pandemic by helping them with an alternative revenue source as it allows cashing out into real money (https://www.youtube.com/watch?v=Yo-BrASMHU4).

While Leah is all for allowing innovators to build new solutions, she recognises the role of regulation in fostering trust and confidence, in making regulated financial institutions enter the space and make it more accessible. However, there is a fine balance to be achieved. She feels that regulating too early without proper industry consultation and understanding of how the technology works could lead to unintended consequences. She thinks that blockchain technology could be more useful to compliance and potentially be a better way to prevent crime. 

For more such insights around the challenges with the FATF travel rule, the financial inclusion potential of the crypto economy, and a variety of resources that the compliance community can use to keep in touch with developments in this space, watch the entire episode. 

Conversations: Colin Camp, Pelican.ai

Course Duration: 25 minutes
Course Points: 25

On Fridays with Fintelekt this week, Colin Camp, Senior Director, Business Development and Sales, APAC of Pelican is in conversation with Shirish Pathak, Managing Director, Fintelekt Advisory Services on access to data, artificial intelligence and financial crime compliance.

According to Colin, the only way banks can get on top of their compliance issues now is to be smarter and use modern technology.

Financial institutions need not rip off their old technology for new, but to look at how AI solutions can be used to supplement and improve the existing applications and to make compliance more efficient by employing the new tools.

Among other issues in the conversation, Colin speaks of the challenges around Trade-Based Money Laundering and how it has risen the ladder of priorities of regulators and governments. However, it is linked with other issues such as trade-based terrorist financing, trade-based fraud, human and wildlife trafficking. To truly stamp out the issue, there is a need to facilitate the sharing of data.

Conversations: F. Christopher Calabia, Bill & Melinda Gates Foundation

Course Duration: 19 minutes
Course Points: 15

On this episode of Fridays with Fintelekt. Shirish Pathak, Managing Director, Fintelekt Advisory Services is in conversation with F. Christopher Calabia, Senior Advisor, Supervisory & Regulatory Policy, Bill & Melinda Gates Foundation about financial inclusion and the role of digital financial services.

The Gates Foundation supports work that addresses inequities in healthcare, education and economic empowerment, especially for women and girls and believes that access to digital financial tools allows the unbanked and underbanked sections of the population to lift themselves and their families out of poverty sustainably.

The Foundation therefore has a direct interest in promoting appropriate regulation and support for the relatively new business model of digital financial services, and in ensuring that it is not abused for money laundering or terrorism financing.

Chris applauds the FATF’s initiative in broadening the dialogue and reaching out proactively to a wider set of stakeholders to study the unintended consequences of its standards. The consultative process will bring in voices that have not been represented in these discussions before – such as the poor, women, advocacy groups and international development organisations.

The conversation explores many more themes around the role of stablecoins in financial inclusion, regulatory evolution and how it can keep pace with technology trends, and the need for innovative approaches to regulation. 

Conversations: Irfan Yar, Global Counter – Terrorism Institute LLC

Course Duration: 24 minutes
Course Points: 20

On Fridays with Fintelekt today, Shirish Pathak, Managing Director, Fintelekt is in conversation with Irfan Yar, Research Fellow, Global Counter Terrorism Institute. 

Irfan questions the progress achieved by regulation and advancements in technology in curbing terrorism financing, when ironically the scale of global terrorism is increasing. He believes the primary reason is due to the focus on curbing the conventional methods of terror financing such as banking, charitable donations or wire transfers, while ignoring the role of state sponsorship, which is the biggest income source for terrorism. He also highlights the correlation between terrorism and transnational organised crime.

Irfan’s advice to governments and the private sector is to look beyond cash and money as sources of terrorism financing to gold, precious metals and high value items which can be used to exchange with cash or to trade with drugs. Working towards reducing corruption is also critical, as it can help illegal actors and terrorists in transferring money.

Watch the entire episode for more on the impact of economic sanctions, understanding the domestic socio-politico-economic drivers of terrorism, international cooperation and financial inclusion. 

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