Financial Crimes Compliance – Old Chestnuts, New and Innovative Approaches


In the 21st century, 96 material fines (> US$10 m) for financial crime offences (AML & Sanctions) were levied across 17 countries amounting to US$38.5 bio, or an annual average of US$1.77 bio. (Source: Financial Crime News)


Financial crime has real impact on society, populations and economies. The underlying offences relate to drug trafficking, prostitution, human trafficking, modern slavery, tax evasion, fraud, bribery, corruption and also environmental offences. Although visible enforcement action is one regulatory tool, a sobering question remains: Are fines and penalties effective in decreasing risk?


This is a particularly fraught point in a digital age where new innovative ways to commit crimes faster and more efficiently emerge. This is followed by disguise of the perpetrators and proceeds in novel manners. The spectre also looms of jailing senior bankers and imposing vicarious criminal liability for acts and omissions of others under one’s supervision.


The industry encounters difficult questions. Does full regulatory compliance co-exist with effectiveness? What does a risk-based approach with adequate controls really mean in practice? Should firms be recognised for what they have found, as well as what they have missed? The challenge is increasingly daunting as the business environment changes in a digital age, and perpetrators are ingenious in modifying their tactics. We are familiar with using carrots, not just sticks as an approach if we want to achieve desired outcomes. How do we prioritise measures to be put in place in a resource constrained environment, and how would such measures be assessed in practice?



In WMI’s session on Financial Crime Regulation led by Ms Mabel Ha, Senior AML/CFT Advisor APAC with Julius Baer and with a wealth of experience as head of Financial Crime Compliance for APAC with UBS and Deutsche Bank, there were a range of highly relevant issues covered. Key Singapore and international regulations on financial crime spanning anti money laundering, sanctions, anti-bribery and corruption and fraud, including the roles and responsibilities of a compliance officer in relation to these were addressed. Participants from a cross-section of the financial services industry exchanged views on their top challenges as a financial crime compliance officer. A common challenge is keeping up with the evolving landscape and Mabel covered new Payments Services regulations, and regulator and industry perspectives on the use of new technologies, data analytics, and public and private partnership information sharing. Insights into challenges in the broader financial sector and newer business models were discussed.


As finance knows no borders, clients, booking centres and money transfers may reside and originate in any part of the world in an increasingly interconnected financial system. The session addressed relevant papers issued by, among others, the Financial Action Task Force, Monetary Authority of Singapore and Hong Kong Monetary Authority on regulatory expectations. The discussion also identified the inherent risks in such business models, requirements and risk mitigation measures for the types of digital assets and cryptocurrencies. For the latter, the practical challenges of complying with requirements such as the “Travel rule” remains. For these, how should industry players trade, custodise, monitor and detect suspicious patterns for such classes of instruments and assets?


Applying sensible requirements designed for earlier business models and technologies to the new classes of assets and modes of money transfer require ingenuity, innovative approaches, and application of growth mindsets to traditional challenges.  There were also discussions about the existence of the Darknet Market or Russian Bazaar Hydra, and use of tools and products to increase the anonymity of virtual assets transactions (including tumblers, mixers, privacy coins). This occurred within a highly interactive session featuring guest speaker Tan Wee Soon, Head of Compliance of Julius Baer Singapore who added heft and deep practical experience also from his past Money Laundering Reporting Office roles in DBS and Deutsche Bank. Participants found it illuminating to hear from speakers who were forthcoming in sharing their vast experience and specifically, their concerns and views on managing emerging risks with digital assets.




Mabel recapped her experience: “A sound understanding and solid grasp of the regulatory framework is necessary for a compliance officer to implement and facilitate his/her organisation’s compliance with such rules. In this  session, we aimed to equip the attendees with a better understanding of why we need to do what we do, how we should support management accountability, how requirements and business models are changing – including in response to international trends – and how controls will need to be nimble to address emerging risks.  I hope the group enjoyed the quizzes and case studies and I’m also grateful for the strong interaction and openness to learning from one another.”


A country’s objective, now with the help of industry and national government partnership, is to encounter less crime, financial or otherwise.  There is no single answer to whether fines and enforcement or personal accountability fully address reducing financial crime. Large eye-catching fines which cut into profits, laden bad reputation to an individual, and thus affect ability to work in the sector are certainly deterrents. However, an understanding of the underlying risks, ways in which money flows move and work, tracing through to the ultimate criminal actors and arresting these vectors, knowledge of what and where such risks lie, how to use tools available and critical controls, must be in place. Financial bodies need to be sound and well-managed institutions. We took steps towards getting there in this insightful, forward looking, practice based, interactive session where ideas were exchanged, several hard questions raised, and status quo challenged.


This is a professional education in the 21st century.


This article was written by Ms Sharon Craggs, Senior Teaching Fellow and Director, Programme Development (Compliance) at WMI.


“Financial Crime Regulation” is a module under WMI’s Graduate Diploma in Compliance in Financial Services, a programme that equips compliance professionals with skills and expertise in established and cutting-edge compliance disciplines and prepares them for broader leadership roles in Compliance risk management.