CYBER CRIME
Moving towards electronic verification Martin Cheek considers the new EU roadmap to combat cyber crime, including a greater reliance on digital solutions and electronic verification. Martin Cheek Managing Director, SmartSearch
Accountants are on the front line of defence against money laundering and have an obligation to do more to prevent it. 26
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ank robberies and diamond heists may make for great movie nights but, in reality, organised crime is increasingly going digital with criminals swapping balaclavas for laptops as tools of the trade. An estimated 80% of crimes now have a digital component, and the cleaning of the illicitly acquired gains almost always has some digital elements. To combat this cyber-crime wave, the European Union recently set out a roadmap to help stop the 99% of criminal assets that are currently going undetected. This is a long-term, five-year plan and it will require buy-in from a number of sectors. Key amongst these are accountants. Accountants are on the front line of defence against money laundering and, alongside other professions, have an obligation to do more to prevent it. Alongside the review of guidance on data retention and proposals for law enforcement authorities to gain access to encrypted information set out by the EU, the head of the Financial Action Task Force, Dr Marcus Pleyer, expressed his desire for the sector to do more. He commented that it’s time to shift from approaching anti-money laundering processes as a tick box exercise, and instead to adopt a much more risk-led approach. To achieve this, according to Dr Pleyer, there needs to be a shift in attitudes amongst those responsible for preventing financial crime, including accountants. Anti-money laundering needs to be looked at as an opportunity.
Know your customer
One clear opportunity for accountants is to make anti-money laundering processes more efficient. Accountants deal with hundreds of clients every day and thousands across the year. The process of verifying the identity of new and even existing clients can be cumbersome and take up valuable time. Once you’ve added in the need to check sanctions and politically exposed persons lists, accountants can spend a lot of time ensuring that
someone is who they claim to be, and that they are legitimate. Due to the time it takes to review every passport, every selfie and every utility bill, it’s understandable if accountants don’t have the time to meticulously scan these documents for irregularities – particularly as forgeries are incredibly accurate now. Those with skills in photoediting software can easily manipulate passport details to create a completely new identity. It would take a lot of time to inspect these images in microscopic detail to find any irregularities.
The future is electronic verification
To speed this process up, accountants should look to make the shift to electronic verification. As part of the EU’s plan, digital solutions are suggested to combat the increasingly online threats. The UK government has also made it clear that it supports the use of electronic verification, and that it is high time digital processes were adopted. Not only is this more effective at flagging potential risks, it also saves accountants valuable time and effort.
Preventing money laundering from the kitchen table
This shift will also allow accountants to effectively prevent money laundering, wherever they work. The coronavirus pandemic has led to sectors such as accountancy and financial services moving to more non-contact, digital ways of working as faceto-face meetings are no longer an option. These ISSUE 117 | AIAWORLDWIDE.COM
