As we approach the final days of the UK general election campaign, it is crucial to consider the robustness of our financial system. This isn’t about tax policies or government spending, but the regulations and safeguards necessary to combat financial crime and protect people’s savings.
Our team collaborates with more than 1,000 companies globally to achieve this goal. Looking ahead to the new parliament, we anticipate the next government will face three major challenges in this area.
Online fraud. The pandemic saw an explosion in fraud as criminals exploited mobile technology, industrialising fraud in unprecedented ways. Our research shows UK consumer anxiety is high, with 88 per cent concerned they may be at risk of fraud. While a new rule from the Payment Systems Regulator requires banks to refund money lost to Authorised Push Payment (APP) fraud, it doesn’t address UK Finance figures showing that 76 per cent of APP fraud originates online outside the financial system. The next government needs to hold advertising and social media platforms accountable for their role in perpetuating this form of criminal activity.
Crowdfunding. Crowdfunding companies have helped individuals and organisations raise hundreds of millions for worthy causes. However, they have also become a tool for terrorists and criminals to raise and distribute funds. Estimates cited by the Financial Action Task Force expect the value of the crowdfunding market to reach $34.6 billion by 2026, an increase of more than 100 per cent compared with 2020. The next government should play its part in ensuring these funds don’t go to bad actors. Tightening Know Your Customer (KYC) crowdfunding requirements will help achieve this. We also encourage financial institutions to approach terrorist financing as a network problem – i.e., look beyond the primary individual or entity to their wider associates. Viewing wider relationships in this way enables firms to connect multiple signals that – together – reveal a criminal enterprise that must be reported.
Bribery and corruption. Every taxpayer is affected when politicians or their family members are corrupt. Corruption manifests in many forms worldwide, ranging from outright theft from the state to government contracts going to less qualified or more expensive vendors. Banks and financial institutions are the vanguards of the fight against this kind of behaviour because they have the clearest picture of an individual’s transactions and network of relationships. So, regulations must remain risk-based on all national and international politicians who maintain accounts in the UK, regardless of their affiliation or opinions.
Fighting financial crime comes with many uncertainties, but it should remain a priority in manifestos – not just in this election but in those to come. The only certainty is that criminals will continue to evolve their tactics, and governments must move quickly to protect the integrity of our financial system.
Stay up-to-date on the latest financial crime news and best practices – and explore the solutions we offer enterprises in the UK and worldwide – at complyadvantage.com.
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