Fighting FinCrime in SE Asia: Need for a Community-based Approach

4 mins

By promoting a collaborative, community-based approach to prevention, Tookitaki's Founder and CEO, Abhishek Chatterjee, reveals how Tookitaki’s two innovative platforms i.e., AFC Ecosystem and AMLS are revolutionising the fight against fincrime.

What trends have you spotted permeating the financial crime landscape in South-East Asia in the last 12 months?

In the past 12 months, the financial crime landscape in Southeast Asia has seen a surge in digital payment fraud, cybercrime, and cross-border money laundering. Criminals are exploiting gaps in regulatory frameworks and leveraging technological advances to conduct illicit activities. This situation is further exacerbated by the rapid digital transformation brought on by the COVID-19 pandemic, which has led to a greater reliance on online financial services and thus, has increased vulnerabilities. As a result, authorities in Southeast Asia are ramping up their efforts to strengthen regulatory compliance, enhance law enforcement capabilities, and foster cross-border collaboration to combat financial crime effectively. These trends highlight the need for more effective, collaborative, and technologically advanced solutions in the fight against financial crime.

Please tell us more about the Anti-Financial Crime (AFC) Ecosystem in terms of its work, participants, success stories, and challenges.

With criminals employing increasingly sophisticated methods to launder money and evade detection, traditional anti-money laundering (AML) solutions have struggled to keep up. This has necessitated innovative approaches to financial crime prevention.

Tookitaki has developed a unique, community-based approach to financial crime prevention through its two distinct platforms – AFC Ecosystem and Anti-Money Laundering Suite (AMLS).

The AFC Ecosystem serves as a platform for information sharing and collaboration among financial institutions, regulatory bodies, and risk consultants. It facilitates the sharing of best practices, experiences, and knowledge in the battle against financial crime. Its Typology Repository, a living database of money laundering techniques and schemes, is enriched by the collective expertise of its participants. This collaborative platform allows the AFC Ecosystem to adapt and respond to emerging trends and challenges in financial crime prevention.

The AFC Ecosystem has now become one of the biggest communities in the world fighting financial crime. Its members collaborate with each other and share thoughts on the regulatory and implementation aspects of Anti-Money Laundering (AML) compliance. This collaboration has helped create the biggest database of financial crime typologies which is actively being used by AFC Ecosystem members to create more robust AML programmes. 

"Tookitaki is paving the way for a safer and more secure financial landscape, by leveraging advanced technologies, fostering collaboration among stakeholders, and addressing the challenges faced by companies."

What are the biggest challenges currently facing companies in implementing effective AML and fincrime compliance? How is AFC Ecosystem contributing to solving these challenges?

Companies face several challenges in implementing effective AML and fincrime compliance, including fragmented regulatory frameworks, evolving criminal methodologies, and the need to balance customer experience with compliance:

  • Fragmented regulatory frameworks: companies often need to navigate a complex landscape of laws, regulations, and guidelines across different jurisdictions when implementing AML and fincrime compliance. Regulatory frameworks are subject to ad-hoc changes, requiring companies to stay up-to-date and adapt their compliance efforts accordingly.
  • Evolving criminal methodologies: financial criminals are continuously evolving and developing new tactics and techniques to evade detection and exploit vulnerabilities in financial systems.
  • Balancing customer experience with compliance: companies face the challenge of striking the right balance between providing efficient and user-friendly service while ensuring they meet regulatory obligations.

The AFC Ecosystem contributes to solving these challenges by fostering collaboration, promoting knowledge sharing, and providing access to advanced tools and resources. This helps companies in building future-proof compliance programmes that can quickly adapt to changing regulatory requirements across jurisdictions. Companies are also able to identify and mitigate emerging threats without sacrificing the speed and convenience of their services.

How can companies find the right balance between customer experience and compliance to prevent crime?

Implementing robust AML and fincrime compliance measures often involves additional checks and procedures that can slow down transactions or cause inconvenience for customers. Companies can find the right balance between customer experience and compliance by leveraging innovative technologies, such as AI and machine learning, to streamline compliance processes while maintaining a customer-centric approach. Tookitaki’s two platforms i.e., AMLS and AFC Ecosystem, allow companies to enhance detection accuracy and reduce false alerts, improving both customer experience and compliance effectiveness.

How can firms ensure automated solutions they employ, such as AI and ML, are explainable, and where does accountability lie?

Companies must ensure that their automated solutions are explainable and transparent to maintain trust and accountability. Tookitaki’s AMLS uses a glass-box machine learning approach with the explainable AI (XAI) framework, which provides an in-depth rationale for predictions. This approach ensures that AI and ML solutions employed by companies remain explainable, transparent, and accountable.

Is there a significant disconnect between regulatory bodies and firms? If so, how do we bridge that to tackle financial crime more effectively?

There is often a disconnect between regulatory bodies and firms, hindering the effective fight against financial crime. To bridge this gap, Tookitaki’s AFC Ecosystem promotes collaboration and communication between all stakeholders, fostering a united front against financial crime and ensuring that regulatory frameworks and industry practices evolve in tandem.

(As appeared in the Paypers Financial Crime and Fraud Report 2023