The Payments Association, which celebrates innovation and collaboration across the payments industry, has released a new whitepaper. It examines the current arrangements for sharing data to prevent economic crime in the UK.
Collaboration between regulated entities and between public and private sector is key to progress on data sharing to prevent economic crime. The report also presents the changes that may be introduced by the relevant provisions of the Economic Crime and Corporate Transparency Bill, now making its way through Parliament.
Global estimates suggest $2trillion is laundered annually and fraud is now at epidemic levels. Illicit finance has become one of the world’s most prevalent businesses. The report states, “Economic crime is, in short, the crime of our times, and is increasingly being recognised as a threat to the UK’s national security”.
Improving UK data sharing
With the government having a firm spotlight on economic crime and fraud, the whitepaper, entitled Data Sharing to prevent Economic Crime: Why you can now share data with confidence, sets out clear recommendations about ways in which data sharing in the UK could be improved to prevent economic crime while taking account of existing and forthcoming privacy legislation, including:
- Collaboration both between regulated entities and between public and private sector is key to progress on data sharing to prevent economic crime.
- Confidence in their ability to share data without risk of prosecution is vital for financial institutions to be able to combat economic crime.
- The position of data providers to financial institutions, not just regulated entities, must be covered in both legislation and guidance. This is because many financial institutions want to be able to use the latest technology and data. But alas, they do not have the technical resources or are too small to do this for themselves.
What’s prevents data sharing?
The whitepaper also surveyed the membership of The Payments Association. It identified several key issues which prevent the effective and privacy-conscious sharing of data to prevent economic crime:
- Balancing data privacy and the need to share data
- Siloed data within firms, inconsistent formatting of data
- Criminal exploitation of technology
- The cross-border nature of economic crime
- The multiple data-handing laws across borders
Most commentators agree that the very limited way that the financial industry is sharing information is outdated. It must be vastly improved if the UK wants to stop the rising tide of economic crime. A robust data-driven (preferably global) solution is, therefore, seen as critical.
The whitepaper, in collaboration with Form3, finds the nation is at a crossroads where many forces are aligning to open up the opportunity for more effective data sharing. Both within the public sector, within the private sector and between each sector.
Data sharing is crucial to stopping crime
Jane Jee, lead of project financial crime at The Payments Association, said: “The UK lacks the infrastructure to effectively defeat fraud and economic crime. Criminals operate without regard for our laws and our borders. Therefore, data sharing is a crucial part of any organisation’s armoury to stop them. This report is a must-read for all financial institutions concerned about the rising tide of crime.”
Michael Mueller, chief executive officer at Form3 – benefactor for project financial crime at The Payments Association, added: “The effective use of data sharing within the payment ecosystem can deliver a seismic shift in collaboratively combatting economic crime. This whitepaper reflects the current barriers to data sharing that financial institutions in the UK face. As well as the opportunities that can be realised when these can be overcome.”
Tony Craddock, director general of The Payments Association, commented: “We are very excited to share the results of this report. Every one of us has our payments data shared with agencies in the UK and sometimes elsewhere. All for the purpose of complying with anti-money laundering legislation and fraud protection.
“As a result, it is vitally important that individuals, businesses and governments all understand what is possible. This is in addition to what doesn’t work and what is necessary to keep everyone involved in the payment landscape secure.”