Fighting financial crime
How we’re fighting financial crime
We have robust controls in place to counter the threat of financial crime wherever we operate
In recent years, we’ve invested in new anti-fraud systems and processes, in training for our frontline and compliance staff, and in our people. But we know our need for innovation in this area doesn’t stop there.
New machine learning technologies can crunch vast quantities of data quickly, enhancing our criminal surveillance tools and better enabling us to investigate potentially suspicious activities.
And as technology gives criminals a growing arsenal of digital tools to generate and conceal illicit funds, we’re responding by bringing together our specialist teams across cyber and financial crime. This is spearheaded in the US by our integrated ‘CyFi’ Intelligence unit.
The right controls
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.David Howes, Global Head, Financial Crime Compliance, Conduct, and Compliance Frameworks
Our point of view
Ensuring we live by the high standards we set for ourselves is not only the right thing to do, but is an essential part of how we do business. Everyone at the Bank has a meaningful contribution to make in the fight against financial crime.Tanuj Kapilashrami, Group Head, Human Resources
At Standard Chartered we have the privilege, opportunity and responsibility to be a force for good in the markets in which we operate. Given the important role the financial system plays in the lives of our customers, and the development of economies and societies around the world, the conduct of the banking industry matters.
Ensuring we live by the high standards we set for ourselves is not only the right thing to do, but is an essential part of how we do business.
Everyone at the Bank has a meaningful contribution to make in the fight against financial crime.
A key component of this is making sure that we are equipped to identify and respond to the financial crime risks arising out of the work we do. That is why we are committed to helping every member of our staff to understand how conduct, including preventing and detecting financial crime, is integral to our day-to-day work.
As part of this effort, we’ve launched a multi-year internal campaign – ‘The Whole Story’ – to engage our staff through the use of real-life examples and by showing them the human cost of financial crime. The Whole Story goes beyond rules and regulations, and demonstrates the real and positive difference our staff can make.
We believe that helping our people to behave in a way that meets the expectations of clients, stakeholders, regulators and the communities in which we operate is a true competitive differentiator for Standard Chartered.
Our ‘Whole Story’ Campaign
Strengthening our conduct so that each and every one of us sees preventing and detecting financial crime as integral to our day-to-day work.
A silent crime
The cost of failing to prevent financial crime is high. Behind the dollars and cents there are real human stories. But more often than not, those stories are untold. The Whole Story, Standard Chartered’s internal campaign, aims to bring these stories to life and ensure that all of our staff understand the role we play in combating financial crime.
The first phase of The Whole Story launched in late 2015 and highlighted some of the stark realities – and often hidden nature – of crimes such as human trafficking, forced labour, drug trafficking and terrorist financing, and explained how the proceeds of this illegal activity are laundered through the financial system.
The campaign was rolled out globally to staff across 67 markets. It created wide debate across the Bank due to the hard-hitting and often shocking nature of the stories it told. With that came an increased understanding of the role that we as a firm – and as individuals – play in the fight against financial crime.
A year later we launched the second phase of The Whole Story, featuring real life examples of staff from across the Bank who had acted on their suspicions. We wanted to recognise the contribution these individuals have made, whether it’s by spotting a discrepancy in a client’s source of income, following sanctions procedures when processing payments, or simply by remaining alert to possible bribery and corruption risks.
Our approach to conduct
How we conduct our business is integral to everything we do – from how we work as an organisation, to how we support our clients and each other. To help our people meet the high standards of conduct and behaviour that we expect of them, we have developed a set of principles that outline how good conduct is embedded into the way we do business and explains how the different elements of conduct fit together.
This includes the governance arrangements or business practices we have in place, protecting confidential information, the resilience and security of our systems, fighting financial crime, the examples our leaders set, the diversity of our workforce, and how we are rewarded for good behaviour.
All of this impacts on our clients, the service and products we provide, the markets and communities in which we operate, and the trust and confidence we instil.
Our internal campaigns
#knowtherules – an internal campaign aimed at ensuring all our staff understand and follow our policies, what is expected of them and the risks to the Bank of non-compliance, to help our staff do the right thing.
Refreshing our Group Code of Conduct, a document that helps all of us to understand the standards of behaviour we should demonstrate in our day-to-day work.
It Matters – an internal education programme that uses real examples and dilemmas from our businesses to help our people make better judgements and decisions around conduct.
Speaking Up – encouraging all staff to speak frankly, escalate problems, and be courageous. We provide a secure, independent and confidential channel to support this.
#Doingtherightthing – an internal campaign moving beyond rules and policies, thinking more broadly about the way we do business and how we can be more of a ‘force for good’, something to which we continuously aspire.
We want to create a culture in which people are empowered to make the right decisions, exercise good judgment and do the right thing in all aspects of their jobs – especially when the decisions they’re making aren’t clear cut. Together, we will continue to aspire to the high standards we set for ourselves and, in so doing, ensure the success of our business in the long term.Tanuj Kapilashrami, Group Head, Human Resources
Helping to raise industry standards
Working hand-in-hand with client banks across the world to improve practices.
“By sticking with our local correspondent banking customers we can safeguard their access to the financial system, support our commercial footprint and build strong relationships with clients. We can protect and enhance financial inclusion around the world by working with local partners and bringing them into our risk framework.”
Heidi Toribio, Managing Director and Global Head, Banks and Broker Dealers
De-risking through education
We have developed a unique strategy called ‘de-risking through education’ which aims to manage the financial crime risk in our correspondent banking portfolio, support growth in emerging markets and promote financial inclusion. As part of this initiative, we partner with our respondent banks who are looking to improve their financial crime controls, and share our tools and experience to help them build robust controls for managing financial crime risk.
This is done through a series of events called ‘Correspondent Banking Academies’, where we educate our clients on international best practices in financial crime compliance as well as giving clients access to the eLearning materials we use at Standard Chartered.
Correspondent Banking Academies library
Materials from our Correspondent Banking Academies across the world put together by experts from within the Bank
- Illicit wildlife trafficking
- Illicit antiquities trafficking
- Sanctions 101
- Anti-bribery and corruption
- Anti-human trafficking
- AML red flags – cash and trade
The MENAP Correspondent Banking Academy
Standard Chartered hosts a series of Correspondent Banking Academies across the world to share our tools and experience to help our respondent banks build robust controls for managing financial crime risk. One example was the Academy we hosted in the Middle East, bringing together more than 100 representatives from respondent banking clients, regulators and law enforcement.
We take our responsibility as a leading international bank seriously and continue to invest significantly in improving standards across our markets through our correspondent banking and new NGO academies.Bill Winters, Group Chief Executive
As banks, regulators, policymakers and law enforcement agencies address the challenge of tackling money laundering and the financing of terrorism, one outcome is that some banks are choosing to de-risk their business by exiting correspondent banking in certain markets, with very real implications for the global economy.David Howes, Global Co-Head of Financial Crime Compliance
Forging new partnerships
Taking the lead on establishing new collaborative models to tackle financial crime
Money laundering facilitates pernicious crimes such as human trafficking, terrorist financing and the illegal wildlife trade. So it is essential for banks to improve the detection and reporting of suspicious activity. Efforts are underway but broad public and private collaboration is required if we are to transform the financial system into a more hostile environment for criminals.David Fein, Group General Counsel
How we approach partnerships
We’re working with regulators, law enforcement, civil society and other global banks to forge new models for combating financial crime. By bringing together banks and governments, and breaking down traditional silos, we can improve the effectiveness of existing frameworks to combat financial crime and create more actionable intelligence.
A story of success
Our transaction surveillance system flagged a number of SWIFT payments to one of our clients in Pakistan, each of which had been credited to his local currency account and then immediately withdrawn as cash.
Despite our records showing that he was a jeweller, we discovered that the funds were received from a hospital abroad as commission payments for liver transplants. When an analyst followed up, this client told him that he was a doctor using his account for patient remittances, but couldn’t produce any documentary evidence backing this up.
Our analyst then escalated the case internally and disclosed it to Pakistan’s Financial Monitoring Unit, raising his suspicion that the remittances were commission payments for illegal human organ transplants. As a result, the client’s account was shut down and our systems updated to prevent him from returning in future.