Financial Crime Symposium 2022

Deloitte Australia recently hosted its 3rd Annual Financial Crime Symposium 2022 on 4 May in Sydney, and virtually, bringing together a range of local and international speakers who consistently articulated messages on the need to relentlessly challenge how we respond to and disrupt financial crime. The event profiled developments in global financial crime frameworks, perspectives from the Department of Home Affairs on the impact of financial crime, why assurance is critical to an Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Program, and the importance of culture as part of financial crime risk management. This article provides a summary of the key takeaways from the event.

The opening address by the Deputy Secretary in the Department of Home Affairs, highlighted the complex nature of the global environment in which stakeholders now operate as well as the ongoing significant impact of financial crime, which weakens Australia’s national security, reduces Australia’s attractiveness for trading and investment activity and undermines our political processes and democratic institutions.

While it is difficult to quantify the true cost of economic crime, this is estimated to cost the Australian economy up to AUD60.1 billion per year. Despite remaining an attractive target for criminal groups, Australia has developed a broad response to disrupt economic crime which includes the AML/CTF regime, strong powers for law enforcement and an international taskforce to support international cooperation and the identification of emerging ML/TF trends.

Our panel on the global financial crime framework (including senior representatives from ANZ, Institute of International Finance and Deloitte’s Forum for Tackling Illicit Finance) emphasised that continued efforts are required to tackle financial crime effectively including ongoing legislative reform, a renewed focus on managing international safe havens for illicit funds and emphasis on all stakeholders (public and private) working together to break the cycle of money laundering. Traditionally, efforts to fight against financial crime have been segmented and siloed by jurisdiction and organisation, however, this has proven ineffective with criminals actively exploiting these siloes to their advantage.

Opportunities do exist to overcome jurisdictional data privacy and information sharing legal requirements and there needs to be a shift towards greater collaboration and timely information sharing to drive an uplift in fighting financial crime. Already seen as a key mechanism to facilitate greater cohesion within evolving AML/CTF regimes, international experiences indicate that public-private partnerships (such as the FinTel Alliance) and private-private partnerships (that is, between financial institutions) can play a greater role in driving collaborative innovation by providing opportunities to test new ways of working, and can be used as a means of building trust between stakeholders.  

Similarly, collaboration also needs to exist within organisations across all three lines of defence – particularly when assessing the effectiveness of AML/CTF programs. A discussion panel (including senior representatives from AUSTRAC, AMP and Deloitte’s Global Financial Crime Leader) on this topic recognised that reporting entities’ approaches to assurance and monitoring as part of maintaining an effective and sustainable AML/CTF Program must continue to mature.  

Often within organisations, assurance can be seen as an ‘extra cost on top of everything else’ or a ‘tick the box exercise’, however, it should be considered an enabling function which provides senior management and boards with relevant visibility of organisational compliance, thereby providing an opportunity to deploy both strategic and tactical solutions to further strengthen their programs.  

AUSTRAC highlighted the need to adopt a multi-faceted approach to assurance, from the periodic Independent Review through to thematic deep dives and post-implementation and program assurance.  The role of the board has changed significantly in recent years and boards are increasingly engaged on understanding their organisation’s financial crime risk exposures and performing assurance over these areas. Where appropriate (and dependant on organisational structure), all three lines of defence should work together to ensure that the assurance performed is providing clear, accurate and meaningful insight to boards.

Underpinning the success of any AML/CTF Program or broader financial crime strategy is culture, and organisations need to actively encourage a positive culture of compliance. AUSTRAC and Deloitte’s Culture Practice Leader noted that this means ‘bringing the culture to life’ with real-life examples and ensuring employees understand the ‘what and the why’ – what are the financial crime risks that their organisation face and why the processes are in place to mitigate them.

International experiences tell us that organisations that bring the importance of AML to life by encouraging a curious mindset in their employees, emphasising their role in disrupting financial crime through sharing of lessons learnt and that reward risk mitigation behaviours are expected to see the benefit of these behaviours as part of their overall AML/CTF program uplift.