Thomson Reuters published a report on “Revealing the True cost of Financial Crime”.  The report can be downloaded from its website.

For those forced into slave labor by criminals infiltrating supply chains, or the victims of sex trafficking gangs who launder their profits through the financial system, the cost is catastrophic. For others, it is wrongly seen as a victimless crime, only impacting big businesses, and even having benefits for some such as cheaper goods. Organizations are paying a heavy financial cost, collectively spending billions trying to prevent financial crime, yet they are seeing ever greater amounts disappear from their businesses as a result of money laundering, fraud, theft and corruption. At a national level, revenues lost through financial crime mean governments collect less tax revenues and fewer schools and hospitals are built, causing disarray due to the criminal and terrorist activities it funds.

What is financial crime? The usual focus of financial crime is on the illicit money flows from crimes such as money laundering, bribery and corruption that support human abuses including modern slavery, drug trafficking and prostitution. For the purpose of this report Thomson Reuters Risk have taken a wide definition covering all financial crimes, which goes beyond those with which Thomson Reuters is traditionally involved, to provide as complete a picture as possible on the social and financial impact: About this survey This report is based on research commissioned by Thomson Reuters that was conducted online by an independent third party in March 2018.

In this report Thomson Reuters highlights a number of issues:

The Screening Challenge:  The need to screen regularly, rather than just at the onboarding stage, is widely recognized as being an important tool in the continuing fight against financial crime. Here, the survey revealed that 41% of relationships were never screened for financial crime risk and only 36% of these relationships are screened on an ongoing basis.

Measuring the impact: The damage done by financial crime extends well beyond companies to governments, national economies and individuals.

Further costs:  Fear and de-risking:  For many organizations, the costs do not stop there. Those found, knowingly or unknowingly, to be involved in money laundering or other financial crimes risk regulatory fines, reputational damage and even prosecution.

Counting the true cost:  Putting a cost on financial crime is notoriously difficult; historically, many organizations have been reluctant to publicize losses. To address this issue we asked anonymized survey respondents to estimate the impact of each type of financial crime on their organization.

Fighting back:  Organizations are committed to fighting financial crime, but there are gaps in training and resources.

Conclusion:  The Thomson Reuters survey reveals that, despite ever tightening regulation and significant spending on preventative measures, the impact of financial crime across the globe remains huge.

Source:  Thomson Reuters Risk