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Anti-money laundering (AML) technology is currently at the forefront of law enforcement innovation. But in the absence of an “innovation framework”, criminals may exploit “system seams” and outpace AML advancement, according to ASPI Senior Analyst Dr. John Coyne.
The “seams” he is referring to are the subtle but important incongruences between public and private sector organisations; and between the internal teams of government agencies.
“Cultural misunderstandings, regarding budget austerity and financial processes, can mean that innovation projects run short of the funding they need to be seen through to completion”, said Dr. Coyne, ahead of the Police Technology Forum – 27-28 March 2019.
“A new innovation initiative is devised, awarded funding, erected and implemented; then further down the track it rolls into base level budgets. This is a concerningly common theme, when it comes to technology adoption in law enforcement; particularly in costly AML initiatives with lengthy project lifecycles.
“No single party is to blame. The technology is there, the IP is there, the desire to effect change is there on all sides; it simply boils down to system gaps. What we need is a collaborative and integrated approach that not only permits, but fosters the adoption of long term technology initiatives across the board”.
Dr. Coyne’s observations are made on the back of his recent qualitative case study; within which he interviewed 150 stakeholders, ranging from government agencies to policy makers, strategists, and vendors from across the AML technology value chain.
The study found that, despite a strong sector-wide willingness to contribute to innovation, AML initiatives often fell short of their full potential.
“The tendency to misconstrue financing processes can lead to the prioritisation of proposals which are short-sighted in nature. In some cases, there is also a lack of finesse in terms of problem definition”, he said.
Coyne’s report provides recommendations on how to effect an overarching “innovation framework” that fosters AML technology initiatives, at both a system and organisational level.
Among the recommendations are the use of multi-disciplinary teams with an accountable Innovation Lead who takes responsibility for the full lifecycle of the project.
Coyne hopes the suggestions will better enable agencies and vendors to tackle rapidly evolving AML challenges within an increasingly complex financial ecosystem.
“The very nature of finance and FinTech is changing. Just ten years ago people were inserting credit cards into a machine to make transactions; the term ‘cyber currency’ was unfamiliar to many. Today contactless transactions using mobile phones are the norm; and ‘cyber currency’ is a household term”.
Dr. John Coyne will address law enforcement agencies, police forces and industry stakeholders at the Police Technology Forum 27-28 March 2019 – where he’ll talk in depth about his observations and open up debate on some of this year’s biggest AML challenges.
