How Public Private Partnerships Can Stop Financial Crime
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In this point of view we examine how public private partnerships can be leveraged to tackle the global rise in financial crime. We also share opportunities for investment, learnings from past successes and advice for policymakers and financial industry leaders.

The connection between financial economic crime and other forms of serious criminal enterprise underlines the necessity of expanding international cooperation and partnerships to fight it.

Criminal organizations are still able to move an enormous volume of illicit money, which by some estimations range between 2%-5% of global GDP. Fraud, money laundering, terrorism financing and similar offenses across the globe, while financial in nature, have real consequences. Human trafficking, child exploitation and illegal wildlife trade are all supported by financial economic crime. 

There are tools at our disposal to stop financial crime. The further integration of international regulation through the Financial Action Task Force (FATF) intergovernmental body, and supervisory streamlining (such as the establishment of the new Anti-Money Laundering Authority in Europe) will provide platforms for international co-operation.

Public private partnerships can, and will, also play an even greater role in the effective detection of financial crime in the near future.

Greater cross-public and private stakeholder engagement and information sharing enables financial institutions to execute their crime detection role more effectively by being able to identify more true positives and at the same time lower the number of false positives flagged by banks and other financial institutions. And in doing so enable financial institutions to direct resources to the clients and transactions at the highest risk for criminal activity. Investing in these partnerships also facilitates an efficient financial infrastructure with minimal friction for customers.

For public agencies, regulators, and law enforcement, involvement in public private partnerships can support them in translating an increasing flow of information into tangible results, for example higher quality financial profiling, increased asset recovery, and convictions.

In this point of view, we investigate the critical success factors of current anti-financial crime public private partnerships and highlight key recommendations for public and private partners on how to further improve their effectiveness. 

  1. Build trust and motivation between individual stakeholders on both public and private sides. Public private partnerships are built by motivated individuals and thrive on collaboration. This relies on people feeling empowered and trusting each other. A balanced governance will help support that trust and maintain the momentum over time.
  2. Explore creative private public partnership approaches that can be established within the existing legislative framework. If early on discussions on the setup of a public private partnership hit major roadblocks that require legislative change, stop. In most legal structures, there is little room for partnerships to be truly effective and efficient. If limitations arise early on, it is worth considering alternative collaboration structures as a failed public private partnership will damage buy-in of stakeholders and negatively impact trust.
  3. Embed a data-driven approach. Even in the digital era, much of the information used in public private partnerships relies on qualitative assessments. Given the large volume of illicit assets in the global economy, enforcement needs to think bigger and scale their operations to take down massive criminal organizations. Being more data-driven can help achieve this.
  4. Scaling up partnerships with expert working groups or operational cooperation proves to be complex and moves painstakingly slow. The more limited the number of participants involved, the more decisive the partnership can move forward. Investigate where private utilities can play a more targeted role to scale up quickly and provide innovative, impactful solutions at scale supported by the full industry weight.