When I first started working in money laundering risk management in the early 1990s, reputational risk was something that greatly exercised my mind: surely customers would walk away from financial and professional service providers associated with laundering. That didn't happen.
I know. You read the headline, looked at the URL and thought "he's lost it. Again." But I haven't. It's time that we stopped talking nonsense, stopped using lightweight buzz-wordy phrases and acronyms and got to grips with some basic truths.
The surprising news that Carlos Ghosn has been arrested on tax evasion charges in Japan and has already been turfed out of at least one of his senior positions in the Nissan-Mitsubishi-Renault triumvirate which he is widely regarded as having brought, in each case, back from the dead is worthy of comment, regardless of the eventual outcome of the investigation and charges.
The near-Messianic fascination with all things "blockchain" introduces a risk for financial crime risk officers. While the blockchain, as a part of a suite of technologies that work together can provide certain forms of security, there is a flip-side. The same security protocols can obscure information that FCROs would ordinarily expect to have as part of their routine KYC data.
What do FCROs/ MLROs / AML Risk Officers need to know?
The UK's Law Commission plans an Ethereum-like contracts execution platform. No problem so far. But then it wants to go further and make all contracts of certain types executable only via the platform. So while you won't need to use the platform to buy a Mars Bar or to execute a will, you will need to use it for, amongst other things, a trust deed and a power of attorney, if the Law Commission succeeds. It's a serious assault on personal privacy, no matter what "safeguards" might be proposed or introduced.
Australia's ASIC (Australian Securities and Investments Commission) has been, rightly, stung by the brutal criticism it has suffered during the The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. Using the bizarre expression "regulatory capture" which sounds like another one of those phrases designed to attract media attention to the words not their meaning, ASIC's Chairman, Mr James Shipton, told The Australian Broadcasting Corporation "We want to have our supervisory officers physically inside these financial institutions by the end of the month." Is this a good, or even a new, idea?