The surge in Covid-19 related financial crime necessitates an urgent international response, a leading banking association has said. We blogged last week on how the coronavirus crisis was leading to a rise in cybercrime and fraud, and noted that law enforcement bodies such as the National Economic Crime Centre were beginning to warn of a growing threat.
In a staff paper this week, the Institute of International Finance (IFF) has cautioned that the situation is significantly grave to warrant a coordinated global response.
"Both the public and private sectors have seen an uptick in Covid-19 related financial crime across the world" the association noted. The IFF has called on policymakers from the G20 group of developed countries to lead the fight, stressing the necessity of a multilateral response to cross-border financial criminality: "Specific jurisdictional policy pronouncements are helpful, but further assistance would come from the regulatory and law enforcement community coordinating their actions in concert with the private sector on an international basis.”
The body has called for greater data sharing between financial institutions and law enforcement, both on a domestic and international level. Banks in the UK have already been asked to share on an ongoing basis with regulators their experiences in responding to cybercrime – allowing greater information flow across the sector in response to new threats. We can expect further coordination and communication between law enforcement and the private sector in the coming months, as well as greater international cooperation in tackling multi-jurisdictional fraud.
The paper flagged three further challenges:
- the need for wider use of technological innovation by financial institutions in respect of compliance and due diligence;
- the need for clearer communication of priorities by regulators; and
- the need for the Financial Action Task Force and similar bodies to ensure an internationally cohesive response.
The Covid-19 crisis has raised a number of new challenges for financial crime risk management which should be tackled on a consistent, international basis the IFF states...Action on the mitigation of financial crime flows across borders requires a collective response by the global community.