Failures to prevent the more conventional forms of money laundering usually bring about particular types of response. The ‘we need to …’ or ‘We have now looked at our failings and are addressing them’ and, of course, the ‘We strongly regret …’. Yet such statements are almost irrelevant, and they rarely transform the effort towards preventing money laundering. You could argue it is all just ‘lip service’.

Yet it is true, change can take place, updates can happen to existing practices, more regulations may be added, but change is usually minimal outside of improvements in AML/CFT. The real problem here, is that the entire approach to preventing money laundering is wrongly and inconsistently attributed to compliance. Modern-day behaviours and those of today's criminals, and the consequences of the harm caused by their activities, are being ignored, with many remaining misunderstood. Is this perhaps why David Lewis’ (a former FATF Executive Secretary) statement, “Stopping money laundering is about saving peoples’ lives”, could be one of the most important statements of recent times?

If you want to know how wrong we have the idea of prevention, look at German digital bank N26 who found out the hard way after been fined US$5 million over the delayed submission of SARs. In May 2021, N26 was ordered by a regulator to implement safeguards to prevent terror financing and money laundering. N26 was also ordered to close loopholes in their IT monitoring/CDD processes. However, since N26 ran out of time they were hit with penalties. A statement in response to the fine (because there always needs to be a statement), noted how N26 “takes its responsibility in the fight against the growing threat of global financial crime, and in the prevention of money laundering, very seriously”. If statements such as these are to mean anything, then we think what goes before it needs to be looked at in a little more detail.

What we find is preventative measures are being reinvented time and again, but few are hitting the nail on the head, so to speak. It is true, ‘things’ are happening and much of it is aligned to a business-like strategy and surrounded by a deep belief of needing to be effective at prevention. Yet, any strategy can easily be regulator driven and nowhere near focused on preventing the actual problem.