Protiviti partners with BusinessForensics for financial crime

29 May 2019 Consultancy.eu

Consulting firm Protiviti has agreed a partnership with BusinessForensics, a provider of financial crime management software to the financial services industry. 

The agreement comes at a time when banks, insurance companies and other financial services players are facing record levels of financial crime. Criminal activity has been a feature of society for centuries, however, the impact of financial economic crime has in recent years seen a boom in value amid a rapidly progressing technological landscape. Harnessing the latest technologies, ‘CrimeTech’ is enabling criminals to beat the system and power international criminal networks. 

According to one estimate, last year more than $2.4 trillion in proceeds from activities such as drug trafficking, forced prostitution and terrorism alone was laundered through the world’s financial markets and banking systems. Financial crime however encompasses much more illicit activities, and also includes common crimes such as fraud, tax evasion, embezzlement, forgery, counterfeiting, and identity theft. 

Regrettably, regulators are notoriously ineffective in battling financial crime. A recent United Nations Office on Drugs and Crime report warned that as it stands less than 2% of criminal funds flowing through financial markets are confiscated by law enforcement. Watchdogs are therefore increasingly seeking support from private sector institutions, to this end launching a plethora of regulations that force banks and financial services companies in the vanguard of the fight to monitor and track criminals and the transactions they undertake.

The most well-known anti-money laundering (ALM) laws and regulations are the FATF (which outlines the Know Your Customer requirement), Europe’s Anti-Money Laundering Directive (AMLD 4 and AMLD 5) and the US’s Bank Secrecy Act (BSA).Protiviti partners with BusinessForensics for financial crime

BusinessForensics and Protiviti

Tames Rietdijk is managing partner of BusinessForensics, a RegTech product vendor with offices in the Netherlands and Singapore. Founded in 2010, the firm’s consultants, architects and developers support clients in the financial services arena with monitoring and managing integrity risks, as well as compliance. Based on its work for clients internationally, Rietdijk says that the firm is first-hand seeing banks and FinTechs face “enormous challenges in the area of regulatory compliance and operational risks.” 

“At BusinessForensics, we aim at helping organisations effectively be in control of these challenges,” he added. This is where Protiviti steps into the scene. Protiviti is a global consulting firm specialised in among others finance, technology, operations, governance, risk and internal audit. The consultancy boasts a compelling track record in the financial services industry, with in particular a strong heritage in the regulatory compliance arena. “Together with Protiviti, we are confident that we can help clients attain the right level of control,” Rietdijk stated. 

As part of the collaboration, Protiviti will use BusinessForensics’ software during its engagements, enabling the consultancy to deepen and broaden its offering. While Protiviti has long invested in financial crime management knowledge, Owen Strijland, a Director in the firm’s Amsterdam office, pointed out that technology was the missing link in its offering. “With this partnership, we have closed that gap, and our clients will be able to face the future with greater confidence.”

The bundling of expertise positions Protiviti to address the two key success factors of tackling financial crime, says Strijland. Underlining the power of the blended approach, recent studies from Refinitiv and a Big Four firm both concluded that neither tech nor process / people alone are enough to be effective – it is the combination of both that delivers breakthrough performance. 

The two firms have taken their time before formalising their partnership. The consultancy and software vendor have worked together on several occasions across three client projects. “This is a partnership that created itself through success, perseverance and transparency,” said Strijland.

Non-compliance

Being ineffective in tackling financial crime comes with a hefty price tag. A 2018 study by Fenergo found that a massive $26 billion in fines has been imposed for non-compliance with AML, KYC and other financial crime regulations in the last decade, with the US Department of Justice being the most punitive regulator, levying half of the total number.

In Europe, notable examples of fines are those handed out to UK’s Standard Chartered Bank, Denmark’s Danske Bank and Dutch bank ING, which earlier this year faced $900 million in penalties for failing to spot money laundering. Meanwhile, Sweden’s Swedbank is currently in a managerial mess for its alleged involvements in large scale money laundering in the Baltics and Russia.