Financial crimes are not only in the movies
From the “hybridation” of crimes to cyber-attacks, there is a full range of crimes that have a direct impact on financial institutions and the wellbeing of societies. International experts have discussed the challenges and explored solutions during Generali’s 2021 Compliance Week
Watching a good crime story on the big screen is always enjoyable, sometimes even relaxing. It is interesting to learn more about topics like spying, terrorism, fraud or international plots as long as they happen in a far, far away place, we sit on a comfortable sofa, and heroes always get their way. Nonetheless, financial crimes are not that far as we may believe: indeed, surrounding us there may be many elements, signals, episodes, possibly hiding illicit flows of funds and financial crimes.
Criminals can in fact take advantage of the loopholes arising from law asymmetries from one country to another. During the webinar “How Financial Crime impacts communities and you”, part of a series of plenary discussions organized in the context of Generali’s 2021 Compliance Week, Professor Ernesto Ugo Savona, Director of Transcrime - Joint Research Centre of the Università Cattolica in Milan and Editor in Chief of the European Journal on Criminal Policy and Research, explained: “If I have money to make pizza, and this is illicit money, I go to foreign countries to produce pizza and not to Italy, for the simple reason that the risk to be taken is much less abroad than in Italy. So, though this is of course an extreme, in some ways these asymmetries are facilitating criminals to move abroad and to exploit the loopholes for risking less”.
This is referred to as “hybridation” of crimes, i.e. illicit money coming together with a licit activity, and Professor Savona’s example clearly shows that one of the priorities for the EU is a stronger and more harmonized coordination of national regulations, also when it comes to confiscating criminal assets to prevent such crimes. He also illustrated the importance of data reliability and stressed the need for public-private partnerships to promote efficient investigation and mitigate financial crime risks: if companies that are victims of – for instance - cyber-attacks do not provide data on the modus operandi of these attacks, law enforcers will be less supported in prosecuting criminal behaviours, thus resulting in a more lengthy process to define preventive and corrective measures accordingly.
Indeed, investing to keep up with technology is another concrete way to stay at the forefront of the fight against financial crime, to prevent violations as well as financial and reputational impacts on both businesses and communities at large, as highlighted by the CEO of Guidepost Solutions Julie Myers Wood in her speech during the webinar. Equally important is also carrying out regular risk assessments, and more precisely the overall assessment of risk for international companies - with a specific focus on the business lines exposed to greater threats - and the related activities undertaken.
As explained by John Smith, Co-head of Morrison & Foerster’s National Security and former Director of the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), to stop financial crimes “it’s important for each and everyone of us to take this seriously, to learn from the messages. Without all of us and the savvy and watchful eyes that we all bring to the work that we do, the criminals will continue to try to pursue their interests, hindering the stability of society as a whole”.
Generali’s Compliance Week is the yearly event addressed to all employees within the Group and aimed to raise awareness on relevant compliance topics. This effort is part of a broader strategy, sponsored by the Top Management and Board of Directors, focused on the protection of the Group, its stakeholders, and reputation to continue delivering on the promise of improving customers’ lives, living the community with strong and sustainable relationships, and enabling people to shape a safer future.
This year’s edition of the Compliance Week was dedicated to financial crimes and the impact they have on communities, wellbeing, society, and how they have become an even more serious threat because of the pandemic. Employees from over 40 countries have joined virtually the webinars to listen to international experts and internal senior managers and ask their questions. The discussions focused on practical examples of financial crimes carried out exploiting the insurance industry to propose concrete solutions, share best practices, and examine case studies.
Stay tuned to discover the other events organized in this year’s edition of Generali’s Compliance Week.