UK banks unite with NCA to tackle financial crime

Seven major British banks, including Barclays, NatWest, and Lloyds, have joined forces with the National Crime Agency (NCA) to enhance data sharing in a bid to crack down on financial crimes such as money laundering and terrorism financing, Reuters reports.

This collaborative effort, the largest of its kind worldwide, aims to address the estimated £350 billion ($450 billion) annual cost of economic crime to the UK economy.

The initiative comprises two pilot programmes designed to improve the systematic sharing of intelligence on major financial crimes. The first pilot, involving six banks and the NCA, focuses on sharing data when multiple indicators of serious financial crimes are identified. This programme has already identified eight new crime networks that might be exploiting the financial system.

Adrian Searle, director of the NCA’s National Economic Crime Centre, stated, “The fundamental purpose is to bring together the collective efforts of law enforcement, government, regulators, and the private sector to combat economic crime.”

The second pilot aims to create a broader database for suspected economic crimes, involving around eight banks, the Home Office, and the bank lobby group UK Finance. This initiative is part of a broader effort to address the growing pressures from international sanctions, especially those targeting Russian entities following the invasion of Ukraine.

Data protection and legal framework

Historically, banks have been cautious about sharing customer data due to stringent data protection and privacy laws. However, the new UK law, expected to be enacted soon, aims to provide a legal framework to facilitate this data sharing while ensuring compliance with privacy regulations.

“We are deeply conscious of the issues around data privacy,” said a senior banking executive involved in the trial. “It’s also clear that our terms and conditions as banks enable us to share the information without notification to the customer because this is all ultimately to do with fulfilling our legal obligations to help detect crime and prevent financial harm.”

Under the programme, bank staff is seconded to the NCA to form a team of between 15 to 20 intelligence officers, data scientists, and analysts to probe movements of money suggestive of criminal behaviour.

The Financial Conduct Authority (FCA) regulator is observing the project, ensuring that all data sharing meets an acceptable risk.

The ultimate goal of these trials is to pave the way for the use of data for real-time insight to prevent crime. While the volume of accounts identified represents a “very small fraction” of the British total, the initiative has already uncovered new intelligence linked to ten of the NCA’s biggest investigations.

“But it’s a long way to go before we get there,” Searle noted, emphasizing the ongoing nature of this ambitious project.

This collaborative effort marks a significant step forward in the fight against economic crime, showcasing the potential of data sharing and cooperation between financial institutions and law enforcement agencies.

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