GRC Professional - February 2015 Edition | Page 21

entrenched and smart, sophisticated operation,” says McNab.

The police don’t have the resources,
and they are starting too late to deal
with it effectively.
“It is like chasing a Ferrari in a Hyundai.
Even if they improved their resourcing, they
would still be behind. It is seldom that the police are in front of the criminals. Even in a relatively unsophisticated thing like drug crime,
we haven’t even drawn even. The police don’t
have the resources, and they are starting too
late to deal with it effectively. While at the
same time, the criminals have access to some
of the best advice money can buy.”
The Australian Crime Commission (ACC)
conservatively estimates organised crime to
cost Australia A$15 billion annually. “Serious and organised crime can undermine our
border integrity and security. It can erode confidence in institutions and law enforcement
agencies, and damage our economic prosperity and regional stability.”
Unfortunately, recognising the problem
is easier than doing something about it and

problems remain. “There is a lot of ex-military
in Australian organised crime, so they have
training in strategic thought and they have access to the best consultancy advice money can
buy. Unfortunately, that is where law enforcement has some problems because they can’t
always afford that level of advice.”
There has been some advancement from a
regulatory perspective. “The Australian, Canadian, US and UK governments now require
a level of due diligence before an investment is
made to ensure they are not involving themselves with a corrupt company. That due diligence is very important.”
“Banks need to be able to satisfy themselves and the authorities that, if something
goes wrong, they took every step possible.”
McNab says that in addition to their compliance procedures, bank staff need to display
common sense. “If you have a doubt about
something, an old fashioned base-line is, if it
looks too good to be true, it probably is.”
It should be a whole-of-business issue for banks. “Financial institutions also
need to think about how susceptible a
product is to money-laundering when they
launch a product.”

“There are stories in the US of people
being paid to take stored valued cards
across the border to Mexico. You can move
as much $15,000 on one card, each person
may carry ten cards. So that is the problem,
as a bank you may come up with a new product that helps your marketing, but you have
to think: does this expose us to a moneylaundering risk?”

Good communication between
banks and law enforcement is
absolutely critical.
“Sharing of information is critical. Good
communication between banks and law enforcement is absolutely critical. Privacy has to
be maintained, but you can have a conversation about broad issues.”
While banks may be winning the fight to
eradicate high-risk customers from their business, criminal enterprises are only coming up
with new ways to lauder their money. Complacency will only open the door to them reentering the mainstream financial system, and
the risks of that for the institution involved
can be catastrophic.
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