Why we are now ready to turn the tide on Economic Crime

Matt Horne
Matt Horne - Director of Investigations and Intelligence
Feb 20, 2023
Our Head of Policing & Government explores how the Economic Crime-fighting community can improve its response with a collaborative effort.

In my first article in this series, I unpacked Economic Crime through the lenses of national security, organised crime, corruption, and fraud. I explored how rapid developments in technology, increasing global connectivity and gaps in controls, combined to drive its evolution.

In this, the second article, I propose areas of focus to improve our response to economic crime, based on my experience combating it.

I also call out where I perceive genuine signs of progress in both recognising its scale, and mobilising the fight back – there is an opportunity to turn the tide on this national security threat, and the time is now.

There is an opportunity to turn the tide on this national security threat, and the time is now.

But despite this optimism, I recognise the complexity of the challenge. Success will require contributions from across the spectrum. So, I welcome thoughts and insights from my network as we collectively grapple with Economic Crime.

Strategic shifts

In my law enforcement career, I saw first-hand the clear benefits of investments in Economic Crime operational capability, including technology, data exploitation, intelligence, and investigative assets.

The Economic Crime Levy, which will raise funds from the Anti-Money Laundering regulated sector, will bring further welcome investment into money laundering initiatives. Indeed, whilst engaging with senior stakeholders operating against illicit finance, I see unquestionable evidence of the types of capabilities this new investment will enhance.

And partly due to the increasing recognition of the national security implications of economic crime, I sense that the requirement for an improved operational response is now gaining real traction.

Momentum for increasing capability across the spectrum of sanctions is positive, and the impetus to do yet more is palpable…

Legislation is also a critical weapon in the armoury. Whilst it is rarely perfect, there is tangible evidence of action being taken in this regard. The Economic Crime Transparency and Enforcement Act 2022 has already implemented improvements including:

  • Strengthening the UK sanctions regime
  • Requiring the registration of overseas entities
  • Strengthening the Unexplained Wealth Order regime

This work is far from complete; gaps clearly exist in overseas registrations for example, which has been extensively reported upon. But momentum for increasing capability across the spectrum of sanctions is positive, and the impetus to do yet more is palpable, amongst my contacts in this field.

The Economic Crime and Corporate Transparency Bill (or Economic Crime 2) promises further enhancements including:

  • Reforms to Companies House to improve resilience in counter fraud, anti-corruption, anti-money laundering and countering state threats
  • Reforms to Limited Partnerships to prevent economic crime abuses
  • Enhancements in the seizure of crypto-currency and virtual assets
  • Improvements in information sharing by businesses
  • Enhancements to law enforcement intelligence sharing

My work with government and law enforcement stakeholders active in these fields gives me increasing levels of confidence that the proposed measures will bring about step-changes in the collective response.

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Likewise, the anticipated Economic Crime Plan from HM Treasury, the Home Office and UK Finance brings another opportunity to strengthen our resolve in economic crime fighting terms.

And valuable contributions have been made by senior leaders at the NCA, the National Economic Crime Centre, the City of London Police and others from national policing. They have rightly called out the national security implications of failing to address economic crime, including fraud. This is complemented by excellent thought leadership from stakeholders such as the RUSI Centre for Financial Crime and Security Studies and many other respected voices, calling for action and delivery.

Capability gaps

The measures above will make a real difference but will also require ongoing effort, investment, and focus to deliver. And the shift of resources needed to capitalise on them will not be easy, especially with so many other pressures and demands on the organisations involved.

Financial costs are dwarfed by the awful human impacts of ‘industrial’ levels of offending in fraud

And all the while these strategic changes are being implemented, the human cost of economic crime continues. The financial costs are substantial, and the corrosion of trust and confidence in the economy and democracy are palpable. But that is dwarfed in my view by the awful human impacts of ‘industrial’ levels of offending in fraud, which continues relentlessly, whilst the strategic response is being galvanised.

Meanwhile, the ability of the organisations involved to receive, triage, analyse, develop and exploit both data and intelligence is of paramount importance, and this presents challenges in many quarters. The risks of intelligence failure are still apparent, often caused by a lack of technical capability to ensure that organisations ‘know what they know’ and can identify risks and opportunities in a timely fashion, to enable action to be taken.

The ability of economic crime organisations to exchange data, information, and intelligence is also challenged by legacy systems, lack of systems interoperability, and sometimes by risk-averse cultures, or a lack of understanding about what is lawfully possible.

Intelligence capabilities often lack a core entity-centric design or are based on outdated workflows that do not address the challenges of information overload that our operational partners experience.

These capability gaps are not just a problem of government or law enforcement, they are shared by those of us in industry charged with providing options for our partners to utilise.

It is essential that capability providers work together to enhance the integration of systems and tools, with an ecosystem mindset focused on interoperability.

Forward look

Overall I contend that we are in a position to start to turn the tide against Economic Crime. The legislation, reforms, investment, and prioritisation of the threat will in my view provide a firm foundation upon which to build.

But technology must also be a key part of this journey, and despite some excellent work to date, more effort is needed to address some of the systemic challenges outlined above.

A community effort is essential to drive this, requiring cooperation and knowledge-sharing across industries, sectors, and disciplines.

Follow Matt on LinkedIn for regular economic crime insights, and learn more about Clue for Economic Crime

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