NEWS: UK announces world’s largest fincrime data sharing project, involving seven banks and police; eight illicit networks already identified

By AML Intelligence Correspondents

BARCLAYS, NatWest and Lloyds are among seven UK banks to share fincrime data with the National Crime Agency (NCA) in the largest project of its kind worldwide, it was confirmed today (Friday).

The National Crime Agency (NCA) today revealed the project to tackle money laundering and dirty money went live in May – some 12 months after the proposed initiative was highlighted by AML Intelligence.

Other banks involved in the voluntary data sharing project are Santander, TSB, Metro Bank and Starling Bank.

Under the programme that is due to run until October, bank staff are seconded to the NCA to form a team of between 15 to 20 intelligence officers, data scientists and analysts to probe movement of money suggestive of criminal behaviour – and ensure legitimate customers are left alone.

It has already identified eight new crime networks that might be exploiting the financial system.

Adrian Searle, director of the NCA’s National Economic Crime Centre said today: “The NCA and its banking partners have designed the data sharing principles to ensure that only account data with multiple clear indicators of economic crime is included.

“The data provided by banking sector partners only includes information on customers (people or businesses) that meet a set of markers which are indicative of potential criminal behaviour. The volume of accounts identified represents a very small fraction of the UK total,” he added

‘This joint working is a truly innovative approach to try and prevent this criminality. It is the first time this has been tried on such a scale anywhere in the world’

ADRIAN SEARLE, NCA

Britain has ramped up efforts to tackle economic crime, which lawmakers say costs the economy up to around £350 billion each year, after Russia’s 2022 invasion of Ukraine shone a spotlight on how kleptocrats and criminals used the country as a haven to launder, hide and spend “dirty money”.

Mr Searle revealed that three crime networks had been passed to the NCA’s intelligence division for further investigation. The project has also uncovered new intelligence linked to 10 of the agency’s biggest investigations.

“The fundamental purpose is to bring together the collective efforts of law enforcement, government, regulators and the private sector to combat economic crime,” Searle said.

“At the moment, criminals can exploit the banking system to move money at pace across international borders in ways that law enforcement has struggled to prevent. This joint working is a truly innovative approach to try and prevent this criminality. It is the first time this has been tried on such a scale anywhere in the world,” he said.

Elsewhere, Singapore launched a digital customer data sharing platform known as COSMIC (Collaborative Sharing of Money Laundering/Terrorist Financing Information and Cases) with six banks in April. But this was led by the local regulator, not law enforcement, Searle pointed out.

DATA PROTECTION

Banks have long been wary of sharing customer data for fear of falling foul of UK and EU data protection and privacy laws, which could trigger litigation by customers whose accounts have been locked pending investigations.

But the NCA and the banks insist they only share account data with “multiple clear indicators of economic crime” on customers, people or businesses that meet a set of markers about potential criminal behaviour. Banks’ lawyers have also ensured all data sharing meets an acceptable risk.

“We are deeply conscious of the issues around data privacy,” one senior banking executive involved in the trial said.

“It’s also clear that our terms and conditions as banks enable us to share the information without notification to the customer because this is all ultimately to do with fulfilling our legal obligations to help detect crime and prevent financial harm,” the source added.

The Financial Conduct Authority (FCA) regulator is observing the project. Without this, there would have been less appetite for the pilot, the banker said.

The initiative builds on a first pilot between the NCA, NatWest and Lloyds between October 2021 and February 2022. It tested the practicality and benefit of fusing bank and crime data to better identify and disrupt economic crime – and led to one arrest and charge.

‘We are bringing together targeted bank transaction data with the crime related data sets the NCA can access. This should enable our respective analytical teams to detect and disrupt criminality, and reduce the risk banks are managing’

NCA

The volume of accounts identified, however, represents a “very small fraction” of the British total, the NCA says.

The ultimate goal is that such trials will pave the way for the use of data for real-time insight to prevent crime.

“But it’s a long way to go before we get there,” Searle said.

Here is this morning’s NCA statement in full:

“The participating banks are providing the NCA with account data indicative of potential criminality. Subject matter experts and investigators from the NCA and the banks have formed a joint team to analyse the data, alongside the NCA’s own data. Any intelligence outputs will inform the NCA’s investigative work and help the banks to identify risk.

“Use of financial intelligence in such a way will better protect the public from serious and organised crime, and protect the integrity of the UK’s financial system,” the statement added.

Adrian Searle, Director of the National Economic Crime Centre in the NCA said:

“At the moment, criminals can exploit the banking system to move money at pace across international borders in ways that law enforcement has struggled to prevent. This joint working is a truly innovative approach to try and prevent this criminality. It is the first time this has been tried on such a scale anywhere in the world.

“We are bringing together targeted bank transaction data with the crime related data sets the NCA can access. This should enable our respective analytical teams to detect and disrupt criminality, and reduce the risk banks are managing, that may otherwise have been unknown. It could also pave the way for the future ambition to use real time data insight to prevent economic and associated crimes.

“Since going operationally live in May, the project has already delivered 90 intelligence packages in support of both NCA and wider law enforcement investigations.

“The project has provided support to the NCA’s highest priority operations against threats including organised immigration crime, fraud and money laundering. For example, in one high-priority fraud investigation, the intelligence shared by this project has helped focus operational resource on new subjects of interest and identified new lines of enquiry.

“The analytical team are also working to identify new organised crime networks as well as using data science to better understand how criminals are exploiting the financial system. Eight such networks have already been identified, which are being evaluated by the NCA. In addition, three intelligence packages have been shared with banking partners to assist their understanding of the threat and to improve their defences against organised crime.

“This initiative builds on a previous limited pilot delivered collaboratively by the NCA and two UK banks between October 2021 and February 2022. This original pilot tested the practicality and benefit of fusing banking sector data and serious and organised crime data, to better identify and disrupt economic crime and protect the public.

“The pilot demonstrated that this model – where banks share relevant data with the NCA – can deliver valuable intelligence for law enforcement and financial institutions to identify and disrupt criminal activity, and that it can be done in a way that balances the protection of the public from economic crime with the protection of customer privacy.

“The NCA and its banking partners have designed the data sharing principles to ensure that only account data with multiple clear indicators of economic crime is included. The data provided by banking sector partners only includes information on customers (people or businesses) that meet a set of markers which are indicative of potential criminal behaviour. The volume of accounts identified represents a very small fraction of the UK total,” he added.

Searle joined the NCA in March 2022 from NatWest, where he worked as the Group Head of Data and Security Risk.

He has worked in a range of national security related operational and policy roles, and led the cross-government response to significant cyber incidents, as a Deputy Director in the National Cyber Security Centre.