A ‘ground-breaking’ public-private intelligence-sharing partnership has been established to use banking data to laser in on criminality.
The National Crime Agency (NCA) has announced that it is working with seven UK retail banks – including Starling Bank, which describes itself as ‘Britain’s first digital bank’ – on what it describes as a ‘major project to identify and take action against organised crime’.
The banks are providing the NCA with account data ‘indicative of potential criminality’. Staff from the NCA and banks have formed a joint-team to pore over data side by side. Any intelligence outputs will inform the NCA’s investigative work and help the banks to identify risk.
The director of the National Economic Crime Centre (NECC) in the NCA described the joint-initiative as ‘the first time this has been tried on such a scale anywhere in the world’.
‘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 NCA stated in its announcement (26 July).
RELATED ARTICLE AI-enabled criminality ‘probably’ biggest growing risk in financial fraud battle – a UK-focused news report (30 January 2024) on a session titled ‘Financial crime, fraud and payment scams’ at an event (‘Payments Regulation and Innovation Summit’) in London
‘First time this has been tried’
“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,” said National Economic Crime Centre director Adrian Searle in the NCA’s 26 July announcement.
Searle, who joined the NECC in 2022 from NatWest where he was group head of data and security risk, described the co-working as a “truly innovative approach to try and prevent this criminality”, describing it as “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,” Searle explained. “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.”
This initiative builds on a ‘limited’ pilot between the NCA and two of the banks between October 2021 and February 2022. This tested the ‘practicality and benefit’ of fusing banking data with serious and organised crime data.
The pilot demonstrated that such an approach ‘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 states.
RELATED ARTICLE Cat-and-mouse game: company registers up the ante against fraudsters – a write-of a discussion at Global Government Fintech Lab 2024 (25 April) titled ‘Fighting financial fraud with technology’ featuring representatives from Denmark and the UK
Data must meet ‘set of markers’
The newly announced alliance is already a couple of months into its operations and has so far ‘delivered 90 intelligence packages in support of both NCA and wider law enforcement investigations’. These have provided support to the NCA’s priority operations against threats including organised immigration crime, fraud and money laundering.
Analysts 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,’ the announcement continues. It states that eight such networks have so far been identified, which are being evaluated by the NCA.
The agency adds that three ‘intelligence packages’ have been shared with banks to ‘assist their understanding of the threat and to improve their defences against organised crime’.
The organisations involved have designed data-sharing principles ‘to ensure that only account data with multiple clear indicators of economic crime is included,’ the NCA states.
‘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 announcement continues. It adds that the volume of accounts identified represents a ‘very small fraction of the UK total.
RELATED ARTICLE Fraud fighters: public authorities look to fuse technology with data to battle criminals – a write-up of a Global Government Fintech webinar on 7 November 2023 titled ‘Following the money: how can data and technology combine to help governments beat fraudsters?’
JMLIT points the way
The NECC launched in October 2018 with officers or representatives from the NCA itself, Serious Fraud Office, Financial Conduct Authority (FCA), City of London Police, HM Revenue & Customs, Crown Prosecution Service (CPS) and Home Office.
Pre-existing collaboration between financial crime-fighting authorities and banks include the Joint Money Laundering Intelligence Taskforce (JMLIT), a partnership formed in 2015 between law enforcement and the financial sector to exchange and analyse information relating to money laundering and broader economic threats.
In addition, new legislation to tackle fraud and money laundering has recently come into force in the UK, with the Economic Crime and Corporate Transparency Bill becoming the Economic Crime and Corporate Transparency Act on 26 October 2023. This handed the NCA greater powers to compel businesses to hand over information suspected to be used for money laundering or terrorist financing.
As well as Starling and the two banks involved in the initial pilot, the banks involved in the newly announced initiative are Barclays, Santander, Metro Bank and TSB.
The Financial Conduct Authority (FCA) is participating in the pilot in an observational capacity.
RELATED ARTICLE UK anti-fraud and economic crime legislation aims to tackle fake identities – a news story (30 October 2023) on the Economic Crime and Corporate Transparency Bill gaining Royal Assent
Singapore and Netherlands developments
The NCA’s announcement of the initiative comes just under four months after the Monetary Authority of Singapore (MAS) announced the launch of ‘COSMIC’, billed as the first ‘centralised digital platform’ to facilitate sharing of customer information among financial institutions to combat money laundering, terrorism financing (TF) and proliferation financing globally.
The name of the platform – co-developed by MAS and six major commercial banks – stands for ‘COllaborative Sharing of Money Laundering /TF Information & Cases’.
Confidentiality obligations had previously prevented banks from notifying each other about unusual customer activity. Singapore’s Financial Services and Markets (Amendment) Act 2023 and accompanying subsidiary legislation, which set out the legal basis and information-sharing safeguards, was then introduced.
Earlier this month (1 July) five Dutch banks (ABN AMRO, ING, Rabobank, Triodos Bank and De Volksbank) announced that a joint-initiative titled Transaction Monitoring Netherlands (TMNL) would be ‘wind[ing] down its existing activities and capabilities in the coming period’ ahead of the development of a ‘future business plan’ as those involve look to adapt to new European Union (EU) anti-money laundering (AML) rules.
*** The Central Bank of Ireland’s nascent ‘Innovation Sandbox Programme’ will have ‘Combatting financial crime’ as its first theme. Applications will open in September 2024 and the programme itself will run from December 2024 for six months.
