We invited Themis Financial Crime Agency to give a breakfast briefing on the potential financial threats facing businesses today.
The event was attended by people from a diverse range of sectors, including financial, professional and business services, construction, FinTech as well as insurance and private equity.
Here are some of the highlights.
What are the risks?
It is estimated that about $2.1tn of illicit funds are laundered through our global financial networks each year, equivalent to 2-5% of global GDP.
The UK is losing an estimated £85-£90m annually through money laundering alone. If we were to recoup this money, we would be able to build a new HS2 rail link every year.
The UK is one of the world’s largest and most open economies, whose strength is built on extensive and productive relationships across the globe. While it’s important that the UK continues to be an attractive country for legitimate business and a leading global financial centre, we also recognise that its position as a global financial centre also exposes it to the risk of illicit financial flows.
As the UK potentially bids farewell to the single market and looks further afield for trade opportunities, we could find our bribery laws weakened in order to attract foreign investment. It has been suggested a post-Brexit climate could increase the threat of UK companies coming into contact with bribery and corruption – as well as significant international threats.
Is my business at risk?
It’s clear that any business could fall victim to financial crime – whether it’s a regulated business or not. Of course, those prepared for an attack will be more likely to weather the storm. However, for many, the risks are significant and include financial loss, the threat of large regulatory fines, and reputational damage.
Notably, most of our attendees had experienced a financial threat at some point during the course of their career.
Impact of cybercrime
Cyber attacks hit businesses every day – with 34 significant national cyber attacks in 2017 alone.
Focus on cyber threats has increased following several recent high-profile cyber attacks and security breaches on national institutions, such as the WannaCry global ransomware attack in May 2017, which struck the National Health Service (NHS). It’s no surprise then that the UK Government has invested £1.9bn in the country’s national cyber security strategy, to better protect its infrastructure.
The extent to which criminals are exploiting digital technology to commit offences has accelerated. Typically for businesses, the purpose of the electronic break and enter will be to steal the financial information of the business or its customers, to deny service to the company website or to install a virus that monitors a company's online activity in the future.
Cybercrime and tackling its consequences should be right at the top of ever senior management teams’ agenda. Cyber attacks can damage your business' reputation and erode the trust your customers have for you, resulting in substantial loss of business.
Abolishing modern slavery
Many of us assume that slavery only exists overseas; however, modern slavery in the UK is thriving. The British Government estimates that tens of thousands of people are in modern slavery in the UK today.
It’s important to ensure that your workforce, and any candidates that are supplied to third parties, whether directly or indirectly, are not subject to behaviour or threats that may amount to modern slavery, human trafficking, forced labour, or similar human rights abuses
One of the attendees explained how his business provides accommodation for its workforce, especially in the Middle East and Asia, focusing on a high standard of living for the people they employ – which has in turn become a success story for bids and tenders.
Do you have any thoughts on the themes we’ve discussed? We’d love to hear from you in the comments section below or please feel free to contact BIE or Themis to discuss further.