Fighting financial crime

Our ambition is to tackle some of today’s most damaging crimes by making the financial system a hostile environment for criminals and terrorists

Why fighting financial crime matters

The challenge

Access to the financial system helps transform lives around the world, helping to reduce poverty and spur economic development. But the financial system is also used by those involved in some of today’s most damaging crimes – from human trafficking to terrorism, corruption and the drug trade.

What is human trafficking?

The trafficking and exploitation of human beings is a vast, complex, and highly profitable global business. According to the International Labour Organization (ILO) it generates illegal profits of $150 billion a year.

Human trafficking and the financial system

Criminals seek to exploit the financial system in order to move the proceeds of their illicit activity around the world. But whenever money moves through the financial system it leaves a trail. That's their Achilles’ heel and we're determined to do everything in our power to use it against them.

Human trafficking and the financial system

Criminals seek to exploit the financial system in order to move the proceeds of their illicit activity around the world. But whenever money moves through the financial system it leaves a trail. That's their Achilles’ heel and we're determined to do everything in our power to use it against them.

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Disrupting modern slavery

Standard Chartered publishes an annual statement in line with the requirements of the UK’s Modern Slavery Act (2015), setting out the steps the Bank has taken in the last financial year to ensure that modern slavery is not taking place in our operations or our supply chain. 

What is money laundering?

Money laundering enables illicit finances to be hidden within the legitimate financial system. It is estimated that criminal organisations generate $2.1 trillion in proceeds every year, with as much as $1.6 trillion of it available to be laundered. 

The three stages of money laundering

1 Placement criminal monies are put into the financial system

2 Layering the money is moved in the financial system to disguise its criminal origin

3 Integration the money is absorbed into the financial system, appearing legitimate

What is terrorist financing?

Money underpins all terrorist activity. Without it, there can be no training, recruitment, facilitation or support for terrorist groups.

Some of the sources of terrorist financing

For large terrorist organisations:
Taxation and extortion (including of drugs)
Natural resources
Theft and tooling
Trafficking
Donations

For lone actors:
Private funds
Legitimate state subsidies/benefits
Support from like-minded individuals
Card or loan fraud

What is the illegal wildlife trade?

The illegal wildlife trade is not just a threat to biodiversity. it is a transnational organised crime with links to modern slavery, narcotics and the arms trade. It fuels corruption, impoverishes communities and inspires violence. Globally, the trade is the 4th most profitable criminal enterprise.

Partnering to tackle the trade

At Standard Chartered, we want to apply what we've learnt in tackling other forms of financial crime to take the fight to wildlife traders' doors. That’s why we’re working to raise the profile of this crime within the financial sector, strengthen the collective understanding of its financial footprint, and have played a central role in establishing a transnational coalition of partners with the Royal Foundation’s United for Wildlife Financial Taskforce.

Partnering to tackle the trade

At Standard Chartered, we want to apply what we've learnt in tackling other forms of financial crime to take the fight to wildlife traders' doors. That’s why we’re working to raise the profile of this crime within the financial sector, strengthen the collective understanding of its financial footprint, and have played a central role in establishing a transnational coalition of partners with the Royal Foundation’s United for Wildlife Financial Taskforce.

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To fight the illegal wildlife trade, we must disrupt its business model

We can help prevent wildlife trafficking by targeting the heart of the industry: the money

Illegal wildlife trafficking: it will take a network to defeat the networks

Illegal wildlife traffickers rely on financial systems just like other profit-chasing criminals, which means we can trace their activities

Our commitment

"Built on a global footprint, Standard Chartered has become a linchpin of growth in emerging markets, promoting financial inclusion and global trade. This puts us at the front line of fighting financial crime. Building and maintaining robust defences is a necessary part of being in business and, as a gatekeeper to the financial system, it's our responsibility to make sure we are playing our part."

Bill Winters, Group Chief Executive

Our commitment

"Built on a global footprint, Standard Chartered has become a linchpin of growth in emerging markets, promoting financial inclusion and global trade. This puts us at the front line of fighting financial crime. Building and maintaining robust defences is a necessary part of being in business and, as a gatekeeper to the financial system, it's our responsibility to make sure we are playing our part."

Bill Winters, Group Chief Executive

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Our commitment to fighting financial crime

Access to the financial system helps transform lives around the world. But the financial system is also the lifeblood of some of today’s most damaging crimes – from human trafficking to terrorism, the drug trade to corruption.

Built on a global footprint, Standard Chartered has become a linchpin of growth in emerging markets, promoting financial inclusion and global trade. This puts us at the front line of fighting financial crime. Building and maintaining robust defences is a necessary part of being in business and, as a gatekeeper to the financial system, it’s our responsibility to make sure we are playing our part.

We realise that, at times, our past efforts to prevent financial crime fell short. That’s why we have been working hard to respond right across the bank, and we are making significant progress. We’re on a continual journey, and it’s our commitment to become a leader in tackling financial crime.

We have learnt from our past and recognise there is no room for complacency. This means engaging our people and strengthening our culture so that each and every one of us sees fighting financial crime as a core part of the day job, wherever we sit in the bank. At the same time, our business must be backed up by robust compliance efforts that address the inherent risk of the people, companies and markets that we serve – applied consistently around the world.

To make the financial system a hostile environment for criminals and terrorists, our contribution has to go beyond our own business. We’re helping to raise industry standards, working hand-in-hand with our banking customers around the world. And in collaboration with governments, regulators and other global banks, we’re taking a lead on forging new models for combating financial crime.

As we implement our future strategy, upholding the highest standards of conduct is a priority for the bank. That’s how we’ll make a positive difference to how the financial system operates, and build our business competitively and sustainably over the long-term.

Our latest thinking

Experts from Standard Chartered provide their insights on issues, events and trends linked to the global fight against financial crime.

See more of our Perspective posts by clicking our ‘Expert perspectives’ tab.

How we are fighting financial crime

We’re putting our efforts into four areas: 

The right controls

Ensuring our compliance systems match the risks inherent in the markets in which we operate.

Our point of view

"We want to be the best international bank, and we recognise we cannot be that bank without being a leader in fighting financial crime. It's not one or the other. And a core part of getting that right is developing controls that take into account the risks that we face as a bank around the world."

Patricia Sullivan, Global Co-Head Financial Crime Compliance

The right controls

Ensuring our compliance systems match the risks inherent in the markets in which we operate.

Our point of view

"We want to be the best international bank, and we recognise we cannot be that bank without being a leader in fighting financial crime. It's not one or the other. And a core part of getting that right is developing controls that take into account the risks that we face as a bank around the world."

Patricia Sullivan, Global Co-Head Financial Crime Compliance

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We’re working hard to ensure our business is backed by robust financial crime compliance efforts that address the inherent risk of the people, companies and markets that we serve. To enhance our financial crime controls, we’ve made substantial investment in new systems and processes, in training for our frontline and compliance staff, and in our people. But we know that we need to continue to innovate in order to help to keep the financial system secure from criminals and terrorists.

2018 saw the roll-out of some important new tools and processes that have the potential to transform the efficiency and effectiveness of our approach, following a number of successful proof of concepts.

New machine learning technologies offer possibilities to crunch vast quantities of data quickly and to finetune our financial crime surveillance tools; crucially freeing up time for specialists to investigate potentially suspicious behaviour and transactions.

And as technology gives criminals a growing arsenal of digital tools to generate and conceal illicit funds, we’re responding by bringing together specialist disciplines inside the Bank across cyber and financial crime. This is spearheaded in the US by our integrated ‘CyFi’ Intelligence unit.

 

Learn more

Learn more about financial crime controls, and the financial crime activity they aim to prevent, detect and disrupt from our most recent Deep Dives.

See more of our Perspective posts by clicking our "Expert perspectives" tab.

Progress

"The financial crime landscape continues to evolve, and we recognise the need to be vigilant against new and transforming threats as well as adapting to changes in relevant regulation and sanction regimes. In 2017 we built a dedicated Cyber Financial Intelligence team in the US."

Mark Smith, Group Chief Risk Officer

Financial Crime Fighters

Financial crime professionals across the Bank work every day to implement the enhanced controls that we are putting in place. This is one story from across our network.

Using financial data to fight illicit organ trafficking | Financial Crime Compliance Analyst, Pakistan

During the transaction surveillance process, it came to light that a client – a jeweller, based on the Bank’s record – had received frequent SWIFT remittances over a short period. Each of these had been credited to his local currency account, and had been immediately withdrawn as cash. A review of the payment details revealed the funds were received from a hospital abroad as commission payments for liver transplants.

Our analyst followed up. The client stated that he is a doctor using his account for remittances from his patients. Yet he was unable to produce any documentary evidence to back this up – such as a medical degree, agreements with the relevant governments, or patient details.

Our analyst escalated the inconsistencies along with the fact that the client had initially not disclosed his actual profile. He also raised his suspicion that the client was carrying out an illegal activity: receiving remittances as commission against human organ transplants. The Bank’s employee disclosed this to Pakistan’s Financial Monitoring Unit, which leads efforts to fight against Money Laundering and Terrorist Financing. The client’s account was exited from the Bank and our systems updated to restrict his on-boarding in the future.

Our Annual Financial Crime Risk Symposium

Speaker at the Annual Financial Crime Risk Symposium

At Standard Chartered, we’re committed to developing our teams working in Financial Crime Compliance. In 2016 we established an annual event, bringing together over 2,000 analysts from our Financial Crime Surveillance Unit and Customer Due Diligence teams to explore new imperatives and opportunities in the fight against financial crime.

A speaker at the Financial Crime Risk Symposium

Instead of sending a few analysts to an external conference, we deliver a high calibre event for our staff, including interactive case studies and external speakers such as Mr. Khoo Boon Hui aka Paul Khoo (former president of Interpol) and Rick McDonnell (former Executive Secretary of the Financial Action Task Force).

Speaker at the Annual Financial Crime Risk Symposium

The theme of 2018’s symposium was “The Analyst of the Future” and the event looked back on the Bank’s journey to strengthen its financial crime controls and ahead to new challenges and the need for analysts to continually learn new skills and knowledge to meet emerging threats. The programme included a keynote speech from Paul Khoo on the financial crime landscape and a focus on the risks of FinTech products and how the Bank is innovating and investing in RegTech to mitigate these risks and make its financial crime controls more effective and efficient.

Supporting governance through board level oversight

Some reflections from Sir Iain Lobban, Independent advisor member of Standard Chartered’s Board Financial Crime Risk Committee and former Director of the British Government Communications Headquarters (GCHQ)

Next steps

“We've improved our controls and we want to go further. That means using state-of-the-art technology and data analytics to try and identify those persons and transactions who are really trying to abuse this organisation and launder criminal proceeds. We have a lot more to do and we are committed to completing the job that we have started.”

Patricia Sullivan, Global Co-Head Financial Crime Compliance

Perspectives

Experts from Standard Chartered provide their insights on issues, events and trends linked to the global fight against financial crime.

Standing on the frontline of the fight against financial crime

How we're transforming our approach to tackling some of today's most dangerous financial crimes

Explore our world | 1 Apr 2018

Cracking the remittance challenge

Safeguarding financial inclusion and protecting the integrity of the financial system

Explore our world | 5 Mar 2018

We can’t let the threat of terrorism halt the flow of aid money

Some banks are withdrawing support for charities because a minority have had ties to terrorism, but not banking them could…

Explore our world | 14 Nov 2017

Cyber financial crime: the evolving challenge

How the 'as-a-service' model is providing tools to cybercriminals and what we can do about it

Explore our world | 5 Aug 2017

Illegal wildlife trafficking: it will take a network to defeat the networks

Illegal wildlife traffickers rely on financial systems just like other profit-chasing criminals, which means we can trace their activities

Explore our world | 6 Aug 2018

Modern slavery: how can banks help end this insidious crime

The way forward has to be collaborative, guided by shared experience between sectors

Explore our world | 1 Oct 2017

Using financial data to tackle modern slavery

Whenever trafficking money moves through the financial system it leaves a trail

Explore our world | 2 Aug 2017

How to beat the money launderers

Banks must work with governments to stop financial crime being the world’s most profitable industry

Explore our world | 24 Nov 2016

Fighting financial crime: why 2018 must be a breakthrough year

Our CEO Bill Winters explains how digital banking has created openings for criminals and why lenders must fight back

Explore our world | 14 May 2018

Fighting financial crime: you can’t be half-hearted

The former Director of GCHQ on what it takes to tackle financial crime

Explore our world | 24 Feb 2017

The unintended consequence of tackling financial crime

Why a decline in correspondent banking is endangering trade and posing a threat to financial inclusion

Explore our world | 20 Sep 2016

Deep dives

Want to learn more about the evolving challenge of financial crime control? This section features a collection of helpful summaries put together by experts from within the Bank on key issues and developments in this space.