A combination of Big Data analytics and distributed ledger technology could help financial institutions combat escalating levels of financial crime, says the chief executive of the UK’s Financial Conduct Authority, Andrew Bailey.
“Easier access to financial systems, markets and institutions benefits society without doubt, but also provides opportunities for criminals,” he says. “But it can also provide more capability to identify and prevent financial crime risks. The issue then is whether we have or can have the systems in place to fight against such crime. Can we keep up?”
Technological change in the field of payments has fundamentally changed the landscape, observes Bailey, providing the increased scope, both domestically and internationally, for financial crime to take place.
Looking forward, Bailey remains optimistic that more recent innovations in technology will help tip the balance in favour of more positive outcomes for the global financial services industry.
He says: “If ever there was an area that strikes me as ripe for applying technology to harness the power of Big Data alongside distributed ledger technologies to produce better outcomes, while rationalising the process and cutting costs, it is financial crime.”
In the more immediate term, the pace of innovation in automated text analysis has put the industry “on the cusp of real progress”.
Despite the positive assertions, Bailey remains a realist. “If we know one thing, it is that financial crime will mutate and morph and it would be unwise to make statements to the effect that we have it beaten.”
His comments came immediately after undergoing a grilling by politicians over the resilience and security of bank IT systems in the wake of the £2.5 million cyber heist that afflicted customers of Tesco Bank.