📣 NEW PUBLICATION
Welcome to the new era of private sector collaboration to fight economic crime.
Between 2023 and 2024, the UK, Singapore, the EU, Canada and Australia passed legislation to enable private-to-private sector collaboration to detect economic crime risk. The UAE and Hong Kong have raised the prospect of similar legislation, and Mexico and the U.S. have enhanced their pre-existing legislative frameworks.
In a landmark new study released today by the 'Future of Financial Intelligence Sharing' (#FFIS) research programme, we compare the respective legislative provisions in the U.S., Mexico, Singapore, the UK, the EU #AMLR75 and Canada and highlight innovation opportunities to support cross-border awareness of financial crime and fraud risk in the private sector.
We find a number of differences in the approaches between the six jurisdictions surveyed, including: whether the information sharing is compulsory or voluntary; what type of data can be shared; the economic crime threat domain coverage; the type of private sector entity that can participate; the legal threshold for sharing and purpose limitations; public sector involvement in the sharing; the threat prioritisation process; and whether the legislation includes an enabling provision for cross-border information sharing.
As the focus moves from legislation to implementation of information sharing partnerships, we identify a key challenge relating to the incentives for collaboration. Most of the legal gateways created are voluntary and, at present, largely inconsequential for AML supervisors. Even as collaboration demonstrates more effective results, the incentive structure created by supervisors for a private sector entity to invest in such collaboration remains weak.
We argue that significant changes are now required by supervisors to adapt to the new era. We urge supervisors to consider their role in encouraging effective outcomes from the private sector and, accordingly, their role in stimulating private sector activity and investment in private sector collaboration and data-sharing.
The second part of our paper raises ten innovation track options to strengthen the framework for sharing risk information across borders, not just domestically, between regulated private sector entities.
We intend that this paper can support policy-makers, supervisors and industry leaders in the journey to implement information-sharing effectively, safely and in an accountable manner at the domestic level and to realise the opportunity to ‘connect the dots’ in risk awareness across borders.
Thank you to all the participants who have contributed in our various workshops and conferences relating to this work, those who have engaged in peer-review of this study and to our sponsors who have supported this research: Deloitte, FNA, HSBC, Mastercard, Nasdaq Verafin and Swift.
Download the full paper here:
https://lnkd.in/etWcvWzt
