After graduating from the Faculty of Law and the Faculty of Economics and Business, I gained my MBA and worked as a lawyer attending to legal affairs from the domain of company law in various institutions and positions. I am currently the Director of Compliance and Management Board Support at the bank Hrvatska Poštanska Banka. The scope of my work at the bank includes compliance, prevention of money laundering and fraud.
Financial crime and what we can learn from banks
The growth of market economies and the accumulation of global wealth over the last 30 years were accompanied by a significant increase in financial crime. Economically motivated crime represents a major threat to the development and stability of economies. Financial crime includes crimes against property, fraud, money laundering, corruption, cybercrime, identity theft, information security and the like.
Perpetrators of criminal acts require financial support to achieve their goals, while a successful terrorist group, just like any other criminal organization, is capable of building and maintaining an efficient financial infrastructure. They rely on professional services to manage their finances, such as those provided by bankers, accountants and lawyers, and benefit from a range of financial products.
Due to prevalence and advancement of digital technology, financial crime has taken on a whole new dimension. Criminal organizations operate transnationally to avoid detection, with stolen funds crossing many physical and virtual boundaries before reaching their final destination.
The use of advanced monitoring technology saw an increase in opportunities for detection and the fight against financial crime. In the area of money laundering prevention, it is easier to detect criminal acts as there are a number of tools available to bank employees who can quickly collect and review data related to accounts and transactions, and block suspicious and dubious transactions. Various platforms monitor lists of politically exposed persons and other individuals exposed to high risk of financial crime.
Due to the complex nature of financial services, especially following the development of digital services, the detection and prevention of fraud in the financial sector became an almost overwhelming challenge. Threats may be domestic or international. They may come from within or outside an organization. Income from fraud is rarely generated in cash. Unlike money laundering, where there is intent for money to enter the system, assets that are the target of fraud are for the most part already in the financial system.
Being aware of the risk, governments around the world have implemented critical internal control systems and increasingly regulate financial institutions (primarily banks) by establishing domestic and international legislative frameworks. This discussion will present what we can learn from banks, as gatekeepers of the financial world.