Innovation in Compliance with Tom Fox Fighting Financial Crime and Terrorist Financing
To celebrate the 200th Episode of Innovation in Compliance, Tom Fox is joined by Dan Skolnick, the VP of Product Strategy for Financial Crimes at Lexis Nexis Risk Solutions to talk about fighting financial crime and terrorist financing with cutting-edge technologies. Dan got into the industry after a hot tip at a family party led him to Fircosoft, which was on its way to becoming an industry leader in financial crime prevention technology.
Ahead of the Curve
Financial Crimes experts are much further ahead than other kinds of misconduct investigations professionals, so Tom asks about the evolution of Dan’s professional roles over his career. Dan says that when he started working in the industry, he was Sanction Screening for OFEC - but within a year of starting in the industry, the US Patriot Act was implemented which caused a huge shift in the type of work being done. The job has gone from looking for a very specific type of information to looking for risk across your customer base. Financial Crimes experts are much further ahead than other kinds of misconduct investigations professionals and have the tools, resources and brainpower to prevent financial misconduct.
Deputizing the Talent
The government has, in effect, deputized financial services firms to help them with the terrorism financing problem that was being addressed with the Patriot Act. Because of the sheer quantity of data being collected and analyzed, financial services businesses had the information and know-how to be helpful to law enforcement and in foreign policy, developing a crime-fighting and enforcement culture. Today, you would be hard-pressed to find a bank without an executive who has that kind of enforcement or policy background.
Decision Memory and Reapplication.
Dan explains that a consequence of the emphasis on detection and prevention of terrorist financing is that you really have to prevent transactions rather than identify what happened in the past. In most cases, you need a human to intervene when you have a potential match - but there are more bad actors, more jurisdictions providing lists of bad actors, and more transactions happening on a daily basis than ever before - a technological solution is required.
The Patriot Act and Public Companies
Tom asks about the anti-money-laundering law that was passed this year which was the largest update to the Patriot Act since it was initially implemented. The new administration has made it clear that they are going to continue to fight financial crimes and terrorist financing. Dan agrees, and goes on to talk about how anti-money-laundering regulation is one of the few truly bi-partisan issues out there! Everyone expects more screening, more insights, and more reports, regardless of who is in charge.
The same is true of public companies - different industries that deal with a high volume of transactions are interested in these tools, and that has been a major push for Dan and his colleagues since being acquired by Accuity and Lexis Nexis.
Resources:
This podcast was sponsored by Lexis Nexis Risk Solutions and RegTech Pulse. RegTech Pulse examines the latest industry and technology trends that help organizations fight financial crime and streamline payments, so money and goods can move safely and securely around the world. Industry experts across the world join the conversation to share their insights and discuss best practices. RegTech Pulse is brought to you by Accuity, a LexisNexis Risk Solutions company, which helps power compliant and assured client transactions to build an interconnected and trusted financial ecosystem.
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