The Swiss bank account has long been synonymous with anonymity and often associated with criminal activity, but Switzerland is working to change that perception.
According to Reuters, the country is considering joining the International Anti-Corruption Coordination (IACCC) task force, a UK-based group that targets kleptocrats and works to recover stolen assets. Launched eight years ago, the IACCC also includes law enforcement agencies from the United States, Australia, and Canada, among others.
If Switzerland were to join the IACCC, its authorities could share intelligence with these nations and coordinate crackdowns on money laundering operations. This would be a significant step for Switzerland—an indication that the world’s largest manager of offshore funds is seeking to distance itself from its reputation as a refuge for illicit activity.
Finding New Avenues
Mitigating money laundering has become a substantial challenge for nations and organizations worldwide. The rise of crypto and digital payments has provided bad actors with additional methods to launder illicit funds.
Fintech leader Block, which owns Cash App, recently incurred a $40 million fine due to activities identified on its platform.
This penalty was levied by the New York Department of Financial Services, which found that Block’s customer due diligence and risk controls were insufficient to prevent money laundering and terrorism financing activities on the platform.
A Dual Challenge
The compliance challenges at Block highlight a dual challenge for financial institutions.
On one hand, criminals now have access to more advanced technology, allowing them to conduct activities like money laundering with greater efficiently. On the other hand, the growing compliance demands from governments have become increasingly difficult for many organizations to navigate.
There is, however, evidence that information sharing between financial institutions can help address both challenges. Adopting a cyber fusion strategy creates an intelligence community where previously siloed banks can identify large-scale fraud or money laundering trends and stay aligned with industry standards.
The effectiveness of this consortium model is demonstrated by the successes of the IACCC. Since it was founded, the group has identified £1.8 billion in suspected stolen funds and frozen £641 million in assets.
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