Financial crime costs global economy $2.4trn each year
Over 49% of businesses in Asia-Pacific had been victims of financial crime over the past 12 months according to a report by Refinitiv as financial crime costs the global economy $2.4trn each year.
The report also found organisations in 19 countries had spent only 3.1% of their turnover to fight financial crime, which includes bribery, corruption, money laundering, fraud, theft, cybercrime and human trafficking. However, according to David Craig, chief executive of data and trading platform Refinitiv, the amount was “not invested effectively”.
Talking at the Refinitiv Pan Asian Regulatory Summit, held in Hong Kong, he said Hong Kong, and other jurisdictions globally, need to standardise privacy laws and improve data sharing protection to combat financial crime in a more effective manner.
About 20 initiatives across the world, including Hong Kong’s Fraud and Money Laundering Intelligence Taskforce, are currently combating such crime, but their effort has been “very limited”, said Craig.
“[These initiatives] have to be protected … because regulations say you can’t share data,” he said. “Privacy is just one issue, there are also risks. If you’re a bank or a financial institution and you share your data with a regulator and they might find something [to prosecute you] … so they have to get into an environment where there’s safety, where a bank and a regulator can share data, but they won’t prosecute the bank,” he told the South China Morning Post.
One of the key problems in Hong Kong is that it does not have a law that allows class-action suits, although the Securities and Futures Ordinance provides that the city’s financial watchdog, the Securities and Futures Commission, can seek a court order requiring those who have committed misconduct to compensate aggrieved investors.
Refinitiv, which was previously wholly owned by Thomson Reuters, is now 55 per cent owned by Blackstone and provides data services to 40,000 companies in 190 countries. The company provides information to firms about potential business associates and partners.