Collaboration that is essential for progress in data sharing to prevent financial crime, reports the Payments Association in connection with Form3

The Payments Association, which celebrates innovation and collaboration across the payments industry, has released a new whitepaper examining current data-sharing arrangements to prevent financial crime in the UK, citing collaboration between regulated entities and between the public and private sectors as key to progress on data sharing to prevent financial crime. The report also presents the changes that could be introduced by the relevant provisions of the Economic Crime and Corporate Transparency Bill, which is now going through Parliament.

Global estimates suggest that $2 trillion is laundered annually, and fraud is now at epidemic levels. Illicit finance has become one of the world’s most widespread businesses – “financial crime is, in short, the crime of our time, and is increasingly recognized as a threat to Britain’s national security”. As the government has a firm spotlight on financial crime and fraud, the white paper, entitled ‘Data sharing to prevent financial crime: Why you can now share data with confidence’, makes clear recommendations on ways data sharing in the UK can be. enhanced to prevent financial crime while taking into account existing and upcoming privacy legislation, including:

Cooperation both between regulated entities and between the public and private sectors is the key to progress on data sharing to prevent financial crime.
Confidence in their ability to share data without risk of prosecution is essential for financial institutions to be able to combat financial crime.
The position of data providers to financial institutions, not just regulated entities, needs to be covered in both legislation and guidance as many financial institutions want to be able to use the latest technology and data and do not have the technical resources or are too small to do this themselves.

The white paper also surveyed the membership of The Payments Association and identified several key issues preventing effective and privacy-conscious sharing of data to prevent financial crime: balancing data privacy and the need to share data, hidden data within firms, inconsistent formatting of data, criminal exploitation of technology , the cross-border nature of economic crime and the many laws for data disclosure across national borders.

Most commentators agree that the very limited way in which the financial industry shares information today is outdated and needs to be significantly improved if the UK is to stem the rising tide of financial crime. A robust data-driven (preferably global) solution is therefore seen as critical. The white paper, in collaboration with Form3, finds that the nation is now at a crossroads where many forces are aligning to open up the possibility of more efficient data sharing both within the public sector, within the private sector and between each sector.

Jane Jee, head of Project Financial Crime at The Payments Association, said: “The UK lacks the infrastructure to effectively fight fraud and financial crime. Criminals operate without regard for our laws and our borders. That’s why data sharing is a crucial part of any organisation’s arsenal to stop them. This report is a must-read for all financial institutions that is concerned about the rising tide of crime.”

Michael Mueller, CEO of Form3 – Benefactor for Project Financial Crime at The Payments Association, added: “Effective use of data sharing in the payments ecosystem could bring about a seismic shift in collaboration to fight financial crime. This white paper reflects the current barriers to data sharing that financial institutions in the UK face and the opportunities that can be realized when these can be overcome.”

Tony Craddock, Director General of The Payments Association, commented: “We are very pleased to share the results of this report. Each of us has our payment data shared with agencies in the UK and sometimes elsewhere for the purposes of complying with anti-money laundering and fraud protection laws, so it is vital that individuals, businesses and authorities understand what is possible, what does not work, and what is necessary to keep everyone involved in the payments landscape secure.”