Tookitaki, a regulatory technology company offering financial crime detection and prevention solution, underscores the use of collective intelligence as a potential solution to money laundering in the Philippines.
Quoting information from Financial Action Task Force (FATF), Tookitaki said the country remains on the task force’s gray list, meaning the government failed to prevent international money laundering and terrorist financing. FATF recognizes the need to improve its overall financial intelligence.
“From years of experience, the most effective and efficient way to detect money laundering is to compare customer transactions and study irregularities in established patterns,” said Enrique Dela Cruz Jr., senior partner and compliance attorney at DivinaLaw, during the second installment of the Tookitaki webinar series “Compliant Conversations,” “If these transactions were actually consolidated into a shared database that can be accessed by financial institutions, it could actually equip the public and private sector to monitor fraudulent transactions better.”
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While consolidating and comparing customer transactions could be beneficial to tackling financial crime in the country, this could also be a challenge as most financial institutions do not have complete customer and depositor records, according to Tookitaki.
This is the advantage that fintech companies have over traditional financial institutions. With technology already integrated with its business model, fintech companies can seamlessly adapt new innovations encouraged by the government, beginning with automated transaction monitoring.
Tookitaki AML Ecosystem
“An effective automated transaction monitoring system should enable fintech companies to detect and assess whether a customer’s transaction poses suspicion considering their respective backgrounds and profiles,” said Akshara Karanjekar, an AML expert at Tookitaki. “It should also facilitate holistic reviews of customer transactions over a short period in order to monitor and identify any unusual or suspicious streams.”
However, as newer forms of payment arise, fintech companies also need to understand that fraudulent transactions are getting harder to detect. While automated transaction monitoring is integral to improving financial intelligence, being able to compare these transactions against a database of fraudulent activities is crucial to actually spotting money laundering.
Tookitaki pioneered The AML Ecosystem, a first-of-its-kind community-driven initiative that helps remove the information vacuum created by siloed AML operations. The AML Ecosystem enables financial institutions, risk advisers, legal firms, consultancies, and AML experts to share their domain knowledge related to financial crime for the benefit of society,” added Chatterjee
The Ecosystem consists of the Typology Repository and a network of experts. The Typology Repository collates the pooled intelligence of a community of AML experts from across the globe. Tookitaki recently made the AML Ecosystem public. Underpinning it is a valued partnership program that is mutually beneficial for all stakeholders engaged in reducing the laundering of illicit proceeds of crime.
“Money laundering can’t be fought in silos. In order to effectively tackle crime, there should be a collaborative effort within the industry,” Tookitaki said.