Financial Crime

Financial Crimes are criminal activities carried out by individuals or criminal organizations to provide economic benefits through illegal methods. Financial crimes, which have become a critical issue in recent years all over the world, cause big harm to the economy and society. Income from financial crimes corresponds to a substantial proportion of global GDP. Regulatory bodies constantly develop new tactics to combat financial crimes. With the development of technology, criminals develop new tactics. The most common financial crimes faced today are terrorist financing, money laundering, corruption, and fraud. 

What is Financial Crime?

Financial crimes are crimes in which criminal organizations benefit financially. In financial crimes, usually, one party provides a financial benefit, and the other party suffers a financial loss. These are frequently committed for the personal benefit of the criminal and involve the illegal conversion of ownership of the property involved. They can occur in many different forms, and they happen all over the world. Some of the most common crimes facing the financial sector are money laundering, terrorist financing, fraud, tax evasion. These crimes are committed every day, and governments worldwide are frequently prosecuting financial criminals while searching for new ones.

Terrorist Organizations need financial support to achieve their goals. Terrorist organizations raise funds through criminal activity, self-financing and legitimate resources. 

Money laundering is the process of turning earnings from crime into legal earnings. Cartels and gangs are the most common money launderers. Some sophisticated techniques may include different financial institutions such as accountants, shell companies, financial and consulting institutions. These criminal organizations use assets that make money laundering and increase complexity to finance money laundering in illegal money transfers between countries and terrorism. Regulators have obliged financial institutions to implement various controls to prevent financial crimes.

These are commonly referred to as "anti-money laundering obligations." Organizations that do not fulfill their AML obligations are punished with fines by the regulatory bodies.

Main Types Of Financial Crime

  • Money laundering
  • Terrorist financing
  • Fraud
  • Electronic crime
  • Bribery and corruption
  • Tax evasion
  • Embezzlement
  • Market abuse and insider dealing
  • Information security

Measures Against Financial Crimes

There are many national and global organizations to combat financial crimes. For instance, The Financial Crimes Enforcement Network (FinCEN) is a US and Treasury Department's office that collects and analyzes financial transactions to combat national and international money laundering, terrorist financing, and other financial crimes. These organizations publish regulations that companies have to comply with. Regulators impose penalties on organizations that do not comply with regulations. Financial institutions must comply with compliance regulations such as Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements.

With the development of technology, methods of combating financial crimes are developing. With the developing RegTech sector in recent years, solutions to combat financial crimes have increased. AML solutions, designed with artificial intelligence and machine learning methods, enable the detection and prevention of financial crimes. AML solutions are growing year by year because manual control methods are dysfunctional and waste time.

Sanction Scanner provides solutions that support companies' fight against financial crimes and compliance with AML regulations. AML Name Screening Software provides companies to control their customers in sanction, PEP, and adverse media data during the customer onboarding and customer monitoring process. Transaction Screening Software enables financial institutions to control the receiver and sender of money transfer transactions in sanction, PEP, and adverse media data. AML Transaction Monitoring Software, on the other hand, ensures that all transactions of all customers are automatically controlled according to risk rules and scenarios, and anomaly transactions are detected.

Discover our AML Name Screening Software

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