Suspicious Activity Reports (SARs) have been cited as a key worry for IT leaders as organisations bolster defences against financial criminals.

ransomware financial crime

The warning comes out of a new study into the compliance pathways and financial crime insights related to SARs, cybercrime, geopolitical hotspots, crypto regulations and the ever-changing sanctions landscape.

Released by global data tech and fincrime detection firm, ComplyAdvantage, the “State of Financial Crime 2022” study also lays out the emerging threats that governments and financial institutions will face in 2022, along with prescriptive recommendations for how compliance teams can respond, and ensure they’re able to act proactively.

Based on a survey and selected interviews conducted in November 2021, the research holds insights and observations from 800 C-suite and senior compliance decision makers who participated from North America, Europe, and Asia-Pacific. The respondents represented a range of organisations across enterprise banking, investments, crypto, insurance and FinTech.

Cybersecurity challenges featured highly on the list of themes explored, with focus on the challenges generated by remote/hybrid working. Experts also looked at the implications of ongoing supply chain disruption; the rising threat of ransomware; the evolution of key global sanctions regimes and more.

A rising number of SAR filing cases featured top of the list, with focus on the continued volatility of the financial crime landscape. Similarly, the rapid rise in new technologies and payment methods, was reflected in the 2021 survey.

80% of firms said they filed more suspicious activity reports (SARs) in 2021, compared to 70% who said the same in 2020. Almost a third of respondents (31%) said they filed 10–20% more SARs in 2021 compared to 2020.

Other serious points of note included:

  • Cybercrime concern is growing: Cybercrime overtakes fraud as the top predicate offence of concern: When asked about the predicate offenses they are screening against, there was a notable drop in concern about fraud — 61% cited this in 2020, compared to 37% in 2021.
  • Geopolitical hotspots are heating up: China, Russia and North Korea were the top three firms globally are most concerned about.
  • Crypto is becoming the norm: Cryptocurrencies and virtual assets went mainstream in 2021 — just 2% of survey respondents said they are not considering crypto services and never will.

Tom Keatinge, Director, Centre for Financial Crime & Security Studies at RUSI, said:

“2022 will prove to be yet another challenging year, given the digital acceleration caused by the pandemic, the continued pace of innovation and market adoption of crypto services and the ever-changing sanctions landscape ignited by ongoing geopolitics,”

“Counter-risk intelligence will be a key element in ensuring the FinTech community remains current on the multifaceted threat trends that will confront their businesses.”

Charles Delingpole founder and CEO of ComplyAdvantage, said:

“Reports are great but avoiding regulatory fines or business shutdowns is even better. As the tide of new financial services is on the rise, so is money laundering and related crimes. Informed teams that are able to assess the known risks in the year ahead will be best placed to protect the integrity of their businesses.”

Topics