Despite financial crime costing the global economy US$2.4 trillion annually, banks and financial institutions are hesitant to share data with regulators, according to the ceo of market data company Refinitiv.
Privacy and risk
David Craig said jurisdictions globally need to standardise privacy laws and improve data sharing protection to combat financial crime in a more effective manner. He explained banks and financial institutions have been hesitant to share data with regulators due to fear of breaching privacy laws, or handing in evidence that could be used lawsuits. Mr Craig was commenting at the Refinitiv Pan Asian Regulatory Summit, held in Hong Kong. He said it was crucial for financial stakeholders to share data as criminals had become more sophisticated and were investing in technology and networks, explaining ‘our argument is that we need to have a lot of risk intelligence and data across the system. more than just meeting compliance requirements.’
A May report from Refinitiv found organisations in 19 countries had spent 3.1 per cent of their turnover, or US$1.28 trillion, to fight financial crime including bribery, corruption, money laundering, fraud, theft, cybercrime and human trafficking. However, Mr Craig said the amount was ‘not invested effectively.’ About 20 initiatives across the world are currently combating such crime, but Mr Craig says their effort has been ‘very limited.’ He explained, ‘regulations say you can’t share data,’ but ‘privacy is just one issue, there are also risks. If you’re a bank or a financial institution and you share your data with a regulator and they might find something [to prosecute you] … so they have to get into an environment where there’s safety, where a bank and a regulator can share data, but they won’t prosecute the bank.’