2021 Asia Trends and Outlook: The Future Fight against Financial Crime – A paper from Kapronasia and NICE Actimize

The digitization of the Asia-Pacific financial sector has accelerated amid the coronavirus pandemic as individuals and businesses move online. While this presents new opportunities, it also poses new risks as financial criminals follow the money online. With face-to-face contact reduced for safety and hygiene reasons, it is more challenging than ever for financial institutions to stay ahead of fraudsters and money launderers.

In Asia Pacific, regional financial centers like Singapore make especially attractive targets. Still, countries such as Australia, Taiwan, and Japan are also grappling with growing domestic instances of fraud, money laundering, and in some cases, insider trading. Some of these crimes also occur across multiple jurisdictions as criminals seek to obscure the origins of illicit financial flows. Cross-border financial crime often exploits banks’ tendency to pursue compliance in a siloed manner, which reduces their ability to share information effectively.

The recent FinCEN files leak shows the risks inherent in this siloed approach: Financial institutions may miss the bigger picture of financial crime risk. That certainly was true with the Malaysia 1MDB scandal, which ensnared banks in Singapore. The FinCEN files also revealed irregularities among transactions made by banks based in Australia and Japan.