COVID-19 Pandemic: The financial crime threat for private and public organizations

Financial Crime Risk Management (FCRM) in private and public organizations has undergone big changes due to paradigm shifts in business dynamics, emerging threats, regulatory climate and technological advancements. However, in the last few months, the world has been experiencing something unprecedented that has made all other changes somewhat secondary: The Coronavirus (COVID-19). This once-in-a-lifetime phenomenon will change the face of Financial Crime Risk Management (FCRM), compliance and sanctions forever. In this article, I will examine the far-reaching impacts of COVID-19 on financial crime and how private and public organizations can address them.

Increased cyber (financial) fraud

Money transfers through online wallets and online payments, including e-commerce transactions, were used moderately in the past. However, these have now become one of the only ways to conduct transactions due to social distancing measures. Seizing this opportunity, fraud perpetrators equipped with the latest technology are perpetrating more sophisticated online transaction frauds. Because a large part of the global population is not tech-savvy enough to ward off the (financial crime) risks associated with online transactions, they are becoming victims of social engineering and cyber (financial) frauds.

Proliferation of money mule-induced laundering

COVID-19 is going to trigger many small-value fund transfers from various governmental bodies, non-governmental organizations and other agencies to fund relief work. Therefore, transaction patterns may stray from the norm. Any Transaction Monitoring (TM) system will need some time to get tuned to these patterns, and this time will ironically present a golden opportunity for launderers to route funds through money mules and escape detection. Fear of being laid off and the lure of earning income from home will entice people into becoming money mules. Most of the leading regulators, including the Dutch National Police, have warned private and public organizations to be vigilant about any such situation.

Imposter scams

A pandemic of this magnitude brings panic and anxiety among the masses, which in turn presents an opportunity for imposters to design scams impersonating government agencies, international relief organizations or healthcare service providers. One such scam that is already occurring involves banking institutions’ moratorium on equated monthly installments. Borrowers are being contacted by fraud perpetrators over the phone or by email and being asked to reschedule a loan as a relief measure. This allows fraud perpetrators to extract account details and siphon off funds in no time.

Money laundering camouflaged as COVID-19 relief

While the world adapts to fight The COVID-19 Pandemic, launderers are using this time to transfer illicit funds under minimal or no suspicion. Regulators such as the European Banking Authority (EBA) have already warned banking institutions about emerging criminal activity linked to COVID-19.

As stated by the European Banking Authority (EBA), “As most economies are facing a downturn, financial flows are likely to diminish. However, experience from past (financial) crises suggests that in many cases, illicit finance will continue to flow.” Other major regulators have also released similar COVID-19 guidelines. It is incumbent for cash-starved banking institutions to maintain high levels of rigor while monitoring cash transactions.

COVID-19-related insider trading

The current COVID-19-crisis has impaired the business dynamics that drive economic activities in a normal scenario. Only essential companies are open under strict regulatory control. As a result, governmental policies and decisions carry huge implications on trading prices of stocks and if used scrupulously, can lead to market abuse.

Cybercrime and associated crypto-threats

There are reports of cyber-criminals taking advantage of COVID-19 to scam the vulnerable public. Some examples include the following:

  • Healthcare providers being attacked by ransom-ware such as Bitcoin ransom-ware, which is wreaking havoc on the already stressed hospital information technology (IT) infrastructure and cashing in on the COVID-19 Pandemic.
  • Cyber-attacks on the depleted security systems of organizations due to limited staff presence and unpatched vulnerabilities.
  • Launching fake mobile apps, which claim to be providing information on COVID-19, aimed at stealing personal data or even rendering phones unbootable.

All the above developments have two things in common: fear and chaos caused by The COVID-19 Pandemic. This has provided the perfect platform for launderers and fraud perpetrators to thrive until private and public organizations develop a defense mechanism and adaptations become institutionalized. Private and public organizations must quickly improvise to this changed scenario to avoid further damage.

Managing the impact of COVID-19: A job made for private and public organizations

Having understood the gravity of the problem, private and public organizations must now address (financial) crimes triggered by COVID-19. One silver lining in this grim situation is seeing several innovations develop that were unimaginable just a few weeks ago, such as the production of ventilators by car manufacturers and the conversion of trains, ships and even airplanes into hospitals. Private and public organizations are likely to create their own innovative solutions to stay afloat during these testing times as well. The following are realignments that might be used to mitigate COVID-19-related financial (crime) risks.

Strengthening Suspicious Activity Report (SAR) investigation, factoring in emerging risks and enhancing automation

As most client interactions for banking are now happening through online channels, anti-money laundering (AML) procedures will change. The financial (crime) risk perception of banking institutions should also change accordingly as bad actors will introduce newer forms of suspicious activities into the system. The Dutch Authority for the Financial Markets (AFM) has already advised private and public organizations to remain alert to malicious/fraudulent transactions from exploiting The COVID-19 Pandemic.

Given the above changes and with minimal staff strength at their disposal, banking institutions that have introduced automations in the past will gain from these implementations. Others will need to work hard to introduce cognitive Robotic Process Automation (RPA) based on Suspicious Activity Report (SAR) investigation and reporting solutions to meet this challenge.

Fine-tuning adverse media screening

As part of anti-money laundering (AML) investigations, adverse media screening is performed to ascertain whether the investigated entity is involved in anything negative such as criminal proceedings, penalties and fines, involvement in laundering of funds, and so on. Important aspects of adverse media screening include news categorization, context-sensitive interpretation and automation of screening process. With COVID-19 introducing new sets of (financial) crime typologies, private and public organizations will face increased false positive alerts as well as true positive misses. Therefore, private and public organizations need to review their media screening and introduce necessary changes to stay effective. In short, private and public organizations must redefine screening typologies for drawing insights.

New scenario building for Transaction Monitoring (TM)

Like adverse media screening, Transaction Monitoring (TM) scenarios will also need to be adjusted so newer forms of money laundering are kept in check. Therefore, banking institutions need to review Transaction Monitoring (TM) scenarios and introduce Artificial Intelligence (AI)-based detection wherever possible to take care of any new anomalies or pattern changes automatically.

Stricter insider-trading detection through Artificial Intelligence (AI)-based models

Insider-trading as a result of regulatory policy information being leaked must be addressed. Additional scenarios to consider include timing of policy information dissemination and timing of trading. This will be a tough job as it needs to be accomplished in the interest of market integrity. A more rigorous trader and employee communication surveillance will also help a great deal.

Finding newer acceptable ways to perform Know your Customer (KYC) updates

Know your customer (KYC) updates will have serious challenges as social distancing measures continue. Private and public organizations need to develop a robust mechanism using unconventional channels wherever possible, such as online data collection for collecting customer data.

Enriching fraud scenarios with the latest event information

As newer forms of frauds are gaining prominence, Private and public organizations need to enrich their fraud event repository so COVID-19-induced frauds are not missed. Here again, Artificial Intelligence (AI)-based detection models will be quite handy for making unsupervised adjustments in flawed indicators.

Keeping cyber threats at bay by deploying adequate staff

Cyber-security and data breach prevention are nonnegotiable under all circumstances. These are now even more critical due to the following factors:

  • Stress of digital transaction volumes on IT-infrastructure
  • Current onslaught of cyber-criminals
  • Data access by employees working from remote locations

Any frugality in terms of staffing this function will only attract hefty financial and reputational losses and cause severe business continuity issues. Therefore, IT-support should receive top staffing priority.

Including the above-mentioned set of measures, the broad readiness agenda for C-level risk and compliance heads of private and public organizations is depicted below.

Conclusion

The COVID-19 Pandemic will likely be present for the foreseeable future, so appropriate changes in how companies manage (financial crime) risks must be made. After getting over the initial hiccups of grappling with immediate business continuity challenges, (financial crime) risk and IT teams of private and public organizations are now gearing up for the next challenges: how to plan, introduce and institutionalize the above-mentioned adaptations that will help them currently and in the long term. As there is less time to react, operational resiliency and managing speed of change is of utmost importance. One thing that will help private and public organizations a great deal is introducing Artificial Intelligence (AI)-based capabilities, which have very high levels of adaptability to changes in data and information by learning from newer patterns, anomalies and outliers. Private and public organizations that already have these capabilities stand to gain a lot and will be better equipped to handle this COVID-19-crisis now and in the future.

However, it is not possible to develop these capabilities overnight if not existing in their current ecosystem. Therefore, it will be prudent to develop a two-pronged strategy comprising of strategic and tactical measures. The following are key elements of this strategy:

  • All types of detections might be improved through strategic measures, i.e., either by deploying new Artificial Intelligence (AI)-based models within a reasonable time or fine-tuning existing models. For example, money laundering or fraud detection models might be retrained with additional data in order to maintain their detection effectiveness.
  • Changes in manually performed activities might be handled through remediation in the short term so that compliance objectives are quickly achieved. However, in the long run, they would require measures like Robotic Process Automation (RPA) to save effort and time as well as meet new compliance requirements.

Regardless of the strategy, it is important to stay compliant at all times as regulators are not going to provide any major leeway during this hour of COVID-19 Pandemic.

Coronavirus stimulus payment scams: What you need to know

We know there’s been a flood of information and updates about the government’s economic impact payments, or so-called stimulus checks, lately. But quickly and safely moving massive amounts of money into the hands of those who need it is a big job with a lot of moving parts.

We also know that the more you know about the process, the less likely you’re going to be tripped up by calls, text messages, or emails from scammers trying to steal your money or personal information.

Here’s what you need to know about the stimulus payments and how to avoid scams related to these payments.

Who will get money?

Adult U.S. residents that meet established income limits are eligible to receive money from the government. This includes:

Taxpayers – people who filed a federal tax return for 2018 or 2019.

Retirees – people who get Social Security, Railroad, or other retirement benefits.

Beneficiaries – people who get public benefits like SSDI, disability, or veterans’ benefits.

Non-filers – people who do not have to file a federal tax return, including people who made no income or made less than $12,200 (or $24,400 for married couples).If you get Social Security or Railroad Retirement benefits, have a qualifying child, and didn’t file a return in 2018 or 2019, you have to take action by noon ET on Wednesday, April 22 to add the $500 per eligible child to your payment. See details from the IRS.

What to do

Most people don’t have to do anything to get their money because the IRS will use the same payment method – direct deposit, Direct Express debit card, or paper check – used to send you your tax refund, Social Security, retirement, or other government benefits money. If the IRS doesn’t have your direct deposit information, you can go to the “Get My Payment” feature at irs.gov/coronavirus and let them know where to send your direct deposit.

If you don’t usually file a tax return, go to irs.gov/coronavirus to access the “Non-filer” portal and to figure out what, if anything, you have to do to claim your money.

To check on the status of your payment, you can now use the “Get My Payment” feature at irs.gov/coronavirus.

Avoiding Coronavirus stimulus payment scams

Scammers are using these stimulus payments to try to rip people off. They might try to get you to pay a fee to get your stimulus payment. Or they might try to convince you to give them your Social Security number, bank account, or government benefits debit card account number.

4 tips for avoiding a Coronavirus stimulus payment scam

  1. Only use irs.gov/coronavirus to submit information to the IRS – and never in response to a call, text, or email.
  2. The IRS won’t contact you by phone, email, text message, or social media with information about your stimulus payment, or to ask you for your Social Security number, bank account, or government benefits debit card account number. Anyone who does is a scammer phishing for your information.
  3. You don’t have to pay to get your stimulus money.
  4. The IRS won’t tell you to deposit your stimulus check then send them money back because they paid you more than they owed you. That’s a fake check scam.

Report scams to the Federal Trade Commission at ftc.gov/complaint.

To keep up with the latest scams, sign up for the FTC’s consumer alerts.

Avoid Coronavirus Scams

Fraud Perpetrators are taking advantage of fears surrounding the Coronavirus. Here are some tips to help you keep the fraud perpetrators at bay:

  • Hang up on robocalls. Don’t press any numbers. Fraud Perpetrators are using illegal robocalls to pitch everything from scam Coronavirus treatments to work-at-home schemes. The recording might say that pressing a number will let you speak to a live operator or remove you from their call list, but it might lead to more robocalls, instead.
  • Fact-check information. Fraud Perpetrators , and sometimes well-meaning people, share information that hasn’t been verified. Before you pass on any messages, contact trusted sources. Visit What our Government is Doing for links to central and local government agencies.
  • Know who you’re buying from. Online sellers may claim to have in-demand products, like cleaning, household, and health and medical supplies when, in fact, they don’t.
  • Don’t respond to texts and emails about checks from the government. The details are still being worked out. Anyone who tells you they can get you the money now is a fraud perpetrator.
  • Don’t click on links from sources you don’t know. They could download viruses onto your computer or device.
  • Watch for emails claiming to be from the RIVM/GGD or experts saying they have information about the virus. For the most up-to-date information about the Coronavirus, visit the RIVM/GGD and the World Health Organization (WHO).
  • Ignore online offers for vaccinations. There currently are no vaccines, pills, potions, lotions, lozenges or other prescription or over-the-counter products available to treat or cure Coronavirus disease 2019 (COVID-19) — online or in stores.
  • Do your homework when it comes to donations, whether through charities or crowdfunding sites. Don’t let anyone rush you into making a donation. If someone wants donations in cash, by gift card, or by wiring money, don’t do it.
Coronavirus: Fraud Perpetrators follow the headlines

Fraud Perpetrators are taking advantage of fears surrounding the Coronavirus. Those scammers are setting up websites to sell bogus products, and using fake emails, texts, and social media posts as a ruse to take your money and get your personal information.

The emails and posts may be promoting awareness and prevention tips, and fake information about cases in your neighborhood. Fraud Perpetrators also may be asking you to donate to victims, offering advice on unproven treatments, or contain malicious email attachments.

Here are some tips to help you keep the Fraud Perpetrators at bay:

  • Don’t click on links from sources yo don’t know. It could download a virus into your computer or device. Make sure the anti-malware and anti-virus software on your computer is up to date.
  • Watch for emails claiming to be from the RIVM/GGD or experts saying that have information about the virus. For the most up-to-date information about the Coronavirus, visit the RIVM/GGD and the World Health Organization (WHO).
  • Ignore online offers for vaccinations. If you see ads touting prevention, treatment, or cure claims for the Coronavirus, ask yourself: if there’s been a medical breakthrough, would you be hearing about it for the first time through an ad or sales pitch?
  • Do your homework when it comes to donations, whether through charities or crowdfunding sites. Don’t let anyone rush you into making a donation. If someone wants donations in cash, by gift card, or by wiring money, don’t do it.
  • Be alert to “investment opportunities.” The SEC is warning people about online promotions, including on social media, claiming that the products or services of publicly-traded companies can prevent, detect, or cure coronavirus and that the stock of these companies will dramatically increase in value as a result.
Managing financial crime risks during COVID-19 Pandemic

§1. Introduction

The COVID-19 Pandemic still continues to grow with increased impact on the Dutch economy triggering business continuity and crisis management responses across organizations of all sectors and sizes. At the same time, the financial services industry faces new unique threats from fraud perpetrators and continued expectations from regulators that Anti-Money Laundering (AML) Investigations and Compliance services must be maintained despite the disruption to business-as-usual.

Praetor Forensic Auditing provides the services required to help private and public organizations identity the nature and extent of financial crime and deliver appropriate remedies: Fraud Risk AssessmentFraud Risk ManagementFraud InvestigationsCompliance AssistanceIntegrity Due DiligenceForensic Business IntelligenceLitigationNegotiationReputation ManagementForensic Technology and Discovery Services and Legal Department Operations.

§2. PRAETOR FORENSIC AUDITING’s Strategic Analysis, Advisory Services and Operational Support

§2.1. Fraud Risk Assessment

Anti-Fraud provides an independent and objective assessment of the organizations existing anti-fraud program, gaps in the existing controls and suggest measures to mitigate the gaps.

Praetor Forensic Auditing assists its clients in setting up a monitoring framework, developing relevant checking procedures and identifying key risk indicators of fraud. It also develops training programs for employees, and helps to create a continuously evolving control environment reflective of the risk landscape.

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§2.2. Fraud Risk Management

To deter the occurrence of fraud, Praetor Forensic Auditing provides clients with expertise to set-up and implement a visible and transparent fraud risk management program that allows to create an anti-fraud environment.

Praetor Forensic Auditing assists private and public organizations with turning critical and complex issues into opportunities for resilience and long-term advantage. This involves identification of modus operandi as to how did the financial crime occur, who was involved, what were the extent of losses, and how can it be prevented from recurring.

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§2.2.1.       Our Anti-Fraud Strategy

The Praetor Forensic Auditing’s anti-fraud strategy has four (4) main components: a) Prevention, b) Detection, c) Response, and d) Deterrence. The various elements of an effective anti-fraud strategy are closely interlinked and each plays a significant role in combating fraud. The combination of effective fraud prevention, detection and response measures will create an effective fraud deterrent.

§2.2.2.       Fraud Prevention

The attitudes within your organization lay the foundation for a high or low fraud risk environment. Where minor unethical practices may be overlooked, larger frauds may also be treated in a similar lenient fashion. In such an environment there may be a risk of total collapse of your organization either through a single catastrophic fraud or through the combined weight of many smaller frauds.

A sound ethical culture and sound internal control systems are essential key components of a fraud prevention strategy.

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§2.2.3.       Fraud Detection

There are a range of financial crime indicators – both warning signs and fraud alerts – which can provide early warning that something is not quite right and increase the likelihood that the fraudster will be discovered.

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§2.2.4.       Fraud Response

Any organization should set out its approach to dealing with fraud in its fraud policy and fraud response plan. Organizations should ensure that this includes provision for learning lessons from fraud incidents and appropriate, prompt follow-up action.

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§2.3. Fraud Investigation

Fraud Investigation helps organizations manage the risk an vulnerabilities that come from global corruption, from high profile and complex financial matters to employee, cash, cybercrime and fraud. 

Praetor Forensic Auditing assists its clients with investigation of alleged fraud or corruption perpetrated against corporate and government entities, including, but not limited to, vendor fraud, payables fraud and embezzlement. It also assists with factual, often privileged, investigation of alleged corporate wrongdoing, including, but not limited to, investigation of alleged financial statement misrepresentations and violations of anti-corruption regulations. Praetor Forensic Auditing’s investigation work includes forensic imaging of computers, data analysis, collection and analysis of data, interviews of individuals and review of documents.

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§2.4. Anti-Corruption

Praetor Forensic Auditing helps its clients understand and respond to anti-bribery and corruption compliance in all its phases, even when the businesses span many jurisdictions and are governed by many regulators. It assists in determining loose controls posing risk of violation of FCPA and Bribery Act, showcasing company’s views on corruption and bribery to regulatory bodies and also provide training to employees regarding FCPA, Bribery Act and related provisions.

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§2.5. Compliance Assistance

Corporate executives and board of directors have increasing demand on evidences of whether their corporate compliance infrastructures, processes and controls are effective, integrated, efficiently risk-aligned and embedded throughout a complex, global organization. Effective and cost-efficient management of legal, regulatory and reputational obligations is a critical element of corporate governance and enterprise risk management.

Praetor Forensic Auditing assists its clients in assessing, improving and monitoring their compliance programs. Praetor Forensic Auditing’s work includes compliance risk assessment, compliance program gap assessment and improvement recommendations, design implementation assistance for compliance process, deployment of governance, risk and compliance, technology, and data analytics and compliance monitoring.

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§2.6. Integrity Due Diligence

Integrity Due Diligence (“IDD”) is the gathering of independent information to gain an understanding of the integrity and corruption risks associated with a third party. It provides companies with a means to both identify these risks and confirm (or otherwise) information provided to them by a third party.

Praetor Forensic Auditing conducts integrity due diligence services for clients across multiple sectors to help mitigate risks from new commercial relationships and to inform their strategic decision-making.

Companies with an international presence (or plans to expand internationally) are placing an increased emphasis on the need to understand the integrity risks posed by the third parties with whom they contract in those countries (including their representatives, agents, distributors and critical members of their supply chain), in particular for compliance purposes in light of new extra-mural anti-corruption legislation introduced in many western jurisdictions.

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§2.7. Forensic Business Intelligence

Forensic Business Intelligence assists in conducting research and collecting information about a target or an entity through searches on public domain information sources on-site visits and interviews. 

Praetor Forensic Auditing provides Forensic Business Intelligence Services to eliminate opportunities for fraud. We advise clients when the need further information about a potential business partner, another party in a hostile takeover, a competitor or a commercial opportunity. Entering into any significant commercial transaction involves risk, but by providing relevant an reliable intelligence we help clients make better decisions.

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§2.8. Litigation Support

Litigation support is all activities, usually within the law firm, that is designed to prepare a lawyer to try a case, including document review, interviewing witnesses, and case preparation. Litigation support activities include the organization of documents, including paper-based document management, but increasingly through technology such as litigation support software and systems. Documents are organized into searchable databases for review and production.

Praetor Forensic Auditing provides litigation support to its clients, often working alongside their external legal teams, to design and implement investigation strategies and obtain admissible evidence. It also work directly with law firms to enhance their resources and enable them to provide more cost-effective solutions to their clients. As well as legal remedies, Praetor Forensic Auditing has a detailed understanding of extra-legal strategies that can achieve the best outcomes for clients, having worked closely with law firms, media consultants and business advisors in many past cases.

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§2.9. Strategy Consulting

Praetor Forensic Auditing works with leadership to build effective compliance solution strategies to see what is around the corner, and to help leaders understand their risks and responsibilities. It doesn’t simply provide strategic advice. It provides the good counsel and program agility needed to meet current and future regulatory obligations. Most importantly, Praetor Forensic Auditing works with executive leadership to formulate sound strategies that can be efficiently operationalized to achieve results.

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§2.10. Risk Advisory

Praetor Forensic Auditing keeps pace with regulatory change, maintain an ongoing dialogue with regulators, and employ best-in-class solutions to create effective compliance programs for its clients. Praetor Forensic Auditing’s comprehensive approach delves deeply into the regulations and its clients’ business processes to identify and quantify each organization’s individual risks, as well as find, prioritize, and help close any gaps.

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§2.11. Independent Review

Enforcement actions and penalties continue to expose systemic failures and areas of noncompliance within a financial institution’s Bank Secrecy Act (BSA) / Anti-Money Laundering (AML) program and Office of Foreign Assets Control (OFAC) program. Additionally, internal audits or investigations may illuminate areas of potential weakness or concern.

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§2.12. Technology Innovation

Praetor Forensic Auditing provides holistic services related to customer due diligence, sanctions screening, and transaction monitoring technology solutions at a variety of financial institutions- from global, industry-leading banks- to small, regionally focused institutions.

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§2.13. Forensic Technology and Discovery Services

Praetor Forensic Auditing leverages proven methodologies, as well as innovative and proprietary technologies, to identify relevant investigative and dispute resolution evidence in a timely and credible manner.

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§2.14. Legal Department Operations

New technologies and processes are transforming in-house legal departments, but staffing models, too, are shifting to create new efficiencies and respond to the need for updated departmental skills and expertise.

Meet the legal department operations (LDO) professionals – a new position in corporate legal departments that is increasingly helping free up attorney time to focus on legal matters instead of operational ones. The recognition that operations, innovation, technology, and procurement should actually be the responsibility of an identifiable individual, rather than part of the portfolio of the general counsel is the biggest emerging trend in legal operations.

The legal department operations (LDO) professional is typically occupied with project management, financial planning, and managing outside counsel. But these legal department operations (LDO) professionals are also responsible for strategy, goal setting, and managing budgets, people, and vendors. Additionally, legal department operations (LDO) professionals play a crucial role in change management, which might explain their recent popularity.

The legal department operations (LDO) professional is often the person to decide what technology changes make sense and to determine how those technologies should be implemented with consideration of financial and operational implications such as budgeting, staffing requirements, outsourcing, and training.

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§3.    Taking action to manage financial crime risks during COVID-19 Pandemic

§3.1. Maintain culture of compliance with virtual teams

§3.1.1. Ask your organization

  • Does my organization have the technological capabilities to handle a large number of employees now working remotely?
  • Are my teams able to conduct their compliance responsibilities (KYC, TM/Sanctions alert review, Investigations) effectively to ensure compliance with regulatory requirements?
  • If company devices are being used from home, are cybersecurity and sensitive information risks being adequately addressed?

§3.1.2. Potential response strategies

  • Consider the impact on compliance, productivity and cybersecurity of using various technology solutions available.
  • Leverage technological solutions to provide virtual training on new fraud and Anti-Money Laundering (AML)typologies, as well as on revised digital processes from the manual, paper-based processes which are no longer feasible.

§3.2. Added workload with short term loan applications

§3.2.1. Ask your organization

  • Does my organization have processes in place to screen short-term loan applications?
  • Does my organization have the capacity to process the volume?
  • Does my organization have the capacity to onboard clients virtually?

§3.2.2. Potential response strategies

  • Consider your resource requirements for the short-term loan application process.
  • Create, document and deploy new technologybased processes for handling these applications.
  • Assess your methods of onboarding to ensure they meet regulatory requirements.

§3.3. New COVID-19 fraud typologies

§3.3.1. Ask your organization

  • Are my employees and customers aware of the new fraud typologies such as COVID-19 themed phishing attempts that can result in theft of personal data to enable account takeover, credit / loan fraud, card not present fraud, payment diversion fraud, among many other deception schemes?

§3.3.2. Potential response strategies

  • Provide ongoing and up-to-date training to ensure awareness among employees of the new fraud typologies and actions to be taken in order to prevent and detect them.
  • Review and/or employ your cyber incident response strategies and if necessary, consider the information security and data privacy impacts.
  • Ensure your fraud and Anti-Money Laundering (AML) teams are wellconnected to ensure timely reporting of suspicious activity to the Dutch Financial Intelligence Unit.

§3.4. Transaction monitoring of changing consumer behaviour

§3.4.1. Ask your organization

  • How is my customer’s behaviour changing given the pandemic? For example, is your organization faced with an increased number of cash withdrawals?
  • Do my Transaction Monitoring (TM) rules account for deviations from the historical customer profile and could the change in consumer behaviour result in increased monitoring alerts? For example, is your organization faced with increased usage of digital channels by customers to undertake their financial affairs?
  • How should Transaction Monitoring (TM) alerts be prioritized based on the disruption to business-as-usual given the regulatory focus on STRs?

§3.4.2. Potential response strategies

  • Leverage data analytic insights to understand the new consumer behaviour and segment high risk profiles for closer monitoring.
  • Re-assess Transaction Monitoring (TM) models to appropriately capture the new risks posed by new COVID-19 related fraud typologies.
  • Consider your resource requirements for the potential of an unexpected surge in monitoring needs.

This publication contains general information. The Serious Fraud Investigation Office (Van Leeuwen Law Firm | Praetor Forensic Auditing) is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. The Serious Fraud Investigation Office (Van Leeuwen Law Firm | Praetor Forensic Auditing) shall not be responsible for any loss sustained by any person who relies on this publication.
Copyright © 2020 The Serious Fraud Investigation Office (Van Leeuwen Law Firm | Praetor Forensic Auditing), All rights reserved.