According to fintech expert Roman Tereshchenko, illegal financial transactions include various types of fraud, money laundering, tax evasion, manipulation in financial markets, terrorist financing, and other illegal activities related to financial flows. Along with the improvement of modern technologies, the number of methods of such crimes is rapidly increasing and creating global problems. Financial institutions, in turn, use effective strategies to protect their interests. What exactly – says an experienced specialist Roman Tereshchenko.
The main types of financial crimes in the modern world
According to the expert, in 2023 sum of illegal funds that passed through the global financial system exceeded $3 trillion. That is, illegal financial transactions continue to remain a serious threat to the global economy. Roman Tereshchenko names the main types of this type of crime:
- The specialist believes that money laundering remains one of the most common and difficult types of financial crime. This process involves complex financial transactions that are aimed at transferring funds obtained illegally. Finances are passed through numerous schemes and channels to legalize their origin. Drug trafficking, corruption, and other forms of criminal activity are often used to generate this “dirty” money. The expert notes that it is extremely difficult to assess the full scale of money laundering, but it is significant. According to the United Nations Office on Drugs and Crime (UNODC), The cash flows that are laundered annually range from €715 billion to €1.87 trillion.
- Financial fraud represents a variety of illegal schemes that are used to obtain financial gain. This could include creating false documents, forging signatures, or using stolen or counterfeit credit cards.
But at the same time, Roman Tereshchenko draws attention to the fact that illegal financial transactions do not go unpunished. The legislation provides for various penalties for persons committing such crimes: fines, imprisonment, and confiscation of property.
The expert is confident that the fight against illegal financial transactions requires common decisions of government agencies, financial institutions, and the public. This is the only way to contain this threat and ensure legality and stability in the financial system.
Effective strategies to combat financial crimes: the view of expert Roman Tereshchenko
The security of financial transactions is becoming a priority for all companies and organizations in the world. According to Roman Tereshchenko, there is no single method for preventing financial crimes. To achieve an effective result in this area, the expert advises using a set of measures to combat fraudsters. These include the following:
- The introduction of strict internal controls, according to the expert, is a key step in preventing financial crimes. This includes implementing procedures to verify customer identities, systematically monitoring financial transactions for suspicious activity, and promptly identifying and responding to any unusual or suspicious transactions.
- Conducting regular risk assessments is important in identifying potential vulnerabilities to financial crime. Organizations must regularly review their operations to identify weak areas and assess threats posed by customers, partners, and counterparties. This will strengthen control and introduce additional verification procedures.
- Training and development are key to combating financial crime. Employees should be trained and have the appropriate skills to identify suspicious activity.
- Implementation of strict KYC, KYB, and AML policies.
– The implementation of strict Anti-Money Laundering (AML) policies, as well as their components – Know Your Customer (KYC), and Know Your Business (KYB) is an important step in preventing financial crimes,– says Roman Tereshchenko.
AML policies are designed to prevent financial systems from being used for money laundering and other criminal activities. The specialist highlights the main features of the listed processes that are included in the AML procedure.
- The KYC policy involves verifying the identity of clients and assessing their potential risks to prevent money laundering, terrorist financing, and other illegal activities.
- The KYB policy, in turn, aims to verify the identity and legitimacy of a business, as well as its ownership structure, to prevent fraud.
Based on his practice, Roman Tereshchenko argues that a strict AML policy and its KYC, and KYB procedures can help companies identify potential threats and take appropriate measures to prevent financial crimes. In addition, these methods can protect the reputation of organizations and reduce losses associated with illegal funds.
