Quality data essential in catching financial crime: Moody’s

Optimal data plays a key role in tackling the rise in financial crime according to Moody’s.

Moody’s managing director, head of Asia Pacific & Middle East, Wael Jadallah told Digital Nation with the correct amount of data “you're always going to be able to have a way to figure out who is doing what”. 

“Our role is to make sure that we get more and more data, that our data is richer, that our data is up to date, that we have more data sources and that we're able to really just have a better way of viewing what's going out there,” Jadallah said.

“Crime doesn't go away … if anything, what we do see is criminals become more sophisticated.”

Jadallah added as criminals become more active “they become bold” and “can become much more destructive.”

“It's always a game of cat and mouse,” Jadallah said.

“It's a constant evolution of them finding new ways and new ways to commit their crimes and for us to try to stay ahead. At the end of the day, data is data.”

Qing Liu, senior director and sales manager at Moody’s added, “What we see a lot more of is the ability to aggregate all this data together and make greater meaning of it”.

This allows the Moody’s team to “detect patterns and become proactive, rather than reactive”.

“One of the things that we see a lot elsewhere and replicated here in Australia with the Fintel Alliance is the public-private partnership, where governments and corporates, financial institutions, banks all come together.”

Fintel Alliance is an AUSTRAC strategy formed in 2017 to strengthen the finance industry’s capability to tackle such issues and support police investigations.

“If we all stitch information together. I'm fairly certain we can detect risk and early warning triggers when they come as opposed to right now, where crimes happen months later it gets detected and then we're on the backfoot.”

Liu added the ability to check patterns is going to be what stops this pattern of behaviour.

“One of the biggest things we see is there's a bit of disparity in information sharing.

“If that information could be more readily shared, we imagine there could be a much larger impact to things like money laundering, and illegal Phoenix activities,’ Liu said.

Illegal phoenix activity is when a company is closed or abandoned to avoid paying its debts before a new business is set up to take its place without the financial liability.

According to Liu, the property space holds a high number of illegal Phoenix activity

“There's a lot in the property space that we've heard, certainly from government agencies, in property and constructions where there are areas where you set up a company, you profit from it, you build or have houses, you don't pay and then you wind it up.”

“Kind of like the Phoenix that rises from the ashes as a brand-new company doing the exact same thing,” Liu said.