BAE Systems Applied Intelligence and Acuminor recently announced a new technology trial to help banks identify transactional behaviour linked to human trafficking. The two organisations have collaborated to provide an unnamed major Nordic bank with a proof of concept that can simulate suspicious activity and test the efficiency of the banks’ financial crime detection systems.

According to recent data, the projected total cost to financial institutions to detect financial crime is $180.9 billion. Alongside this, the global effects of money laundering - caused by human trafficking, terrorist financing and sanction violations – continue to be devastating. The criminal proceeds are counted in trillions of euros and millions of lives are destroyed each year as a result. Understanding how the criminals misuse financial institutions is critical to detection, and current methods of tracking suspicious behaviour still prove challenging. Financial institutions struggle with having a clear and up-to-date view of the criminal landscape making it challenging to know or understand how accurate they are at detecting criminal and victim behaviours.

New FinCrime Testing Service simulates criminal activity

Against this backdrop, a major Nordic Financial Institution is trialling a revolutionary new solution to test the effectiveness of its financial crime detection systems and quantify how effective they are at spotting crimes associated with money laundering.

Acuminor, a Swedish risk management start-up, gathers up-to-date, jurisdiction specific financial crime threat intelligence, collecting information on criminal methods from hundreds of sources around the world. Its advanced technology analyses this information for trends to deliver a digital view of key financial crime risks. With these data insights BAE Systems Applied Intelligence has enhanced its new FinCrime Testing Service – a technology that simulates criminal and victim’s behaviour to provide an independent test of a financial institution’s detection systems. Due to this collaboration, banks for the first time will have the ability to test and quantify the effectiveness of their current detection systems against known bad behaviours. 

Harriet Shaw, Venture Lead at BAE Systems Applied Intelligence commented: “It’s a privilege to be working with Acuminor to enhance the development of the FinCrime Testing Service. Nuanced detection of criminal and victim behaviours is long overdue, banks are fed up of not being able to quantify the effectiveness of their detection systems and justify the implementation of better, more targeted detection techniques. This collaboration and proof of concept takes us an enormous step forward.”

Martin Nordh, CEO of Acuminor, added: “We started Acuminor to help society and the industry fight financial crime with a new and innovative solution - to make a real difference while reducing costs and increasing quality and effectiveness for our clients. We are excited to collaborate with BAE Systems Applied Intelligence and expect to see very interesting results from the FinCrime Testing Service trial.”

Currently, the trial is focused on the crime of human trafficking but the FinCrime Testing Service will soon be rolled out across the other 22 money laundering offenses such as counter terror financing and tax evasion, for example.

The trial will culminate in a report that will highlight any areas of vulnerability and will allow the financial institution to close these vulnerabilities and improve their detection of financial crime.

The global impact of money laundering*

·       $180.9 billion is expected to be spent by financial institutions on compliance

·       23 billion Euros fines for non-compliance with anti-financial crime regulations in 2018

·       80,000 dead in terrorist attacks in the last 5 years

·       2.4 million human trafficking victims today

·       79% of the human trafficking victims are being exploited sexually

·       450,000 kilograms of heroin is being smuggled each year

·       20,000 African elephants killed by poachers for ivory each year