The final season of the Netflix hit thriller, Money Heist saw viewers gripped to see if The Professor and his cadre of criminal masterminds could pull off their final heist of the Bank of Spain. But, says Tom Lyes, while these small screen crimes are entertaining, the story echoes a concerning real-life trend of criminals increasingly using printed paper to hide their crimes.
As the Pandora Papers recently demonstrated, money launderers and fraudsters everywhere are hiding their crimes within huge piles of paperwork, such as by presenting fake bank statements to time-poor employees not specialised in fraud detection.
It used to be these criminals could be caught by simply following the paper trail. But all too often now that trail leads investigators in the wrong direction – or meanders for so long that they get lost on the way.
Why? Because every day, financial, legal, conveyancing and professional services businesses are getting buried under huge volumes of paperwork, slowing down processes, frustrating customers and making it harder than ever to keep track of the truth.
This poses all sorts of problems for businesses that go beyond the immediate financial risk of fraud. Discrepancies in data can have profound implications – and even lead to someone having their own house sold out from under them. With stakes this high, it’s clear that there are few issues more important to a firm’s reputation.
The solution lies in a radical rethink of our relationship with paperwork – one that recognises that, while it can hold the truth, it can just as easily hide it. And realises that, by being selective about the data we share and eradicating unnecessary form-filling, we can make professional services not only swifter, but safer too.
Saying “Bella Ciao” to paperwork
Asking for paper copies of bank statements from several different accounts is cumbersome, slow, puts businesses at repetitional and regulatory risk and can lead to a poor customer experience.
But there’s no need, especially now that the technology exists to facilitate a form-free future. One wherein centralised, automated data collection feeds into a rapid online check that shows proof and source of funds as well as performing account verification – providing firms with a simple and easily evidenced route to compliance.
Such automated reports also have the potential to highlight regular incomings and outgoings, provide a timeline of account balances, and flag any significant payments so irregular activity can be identified for further inspection.
Ultimately, this means that compliance officers in legal and professional services can better conduct the necessary AML checks, with less time spent on lengthy tasks such as data collection and verification.
However, the risks presented to businesses, such as conveyancing firms, who don’t have sound source of funds checks or fail to verify accounts accurately are immense. A personal indemnity insurance claim can cause significant financial damage to a business with insurers wanting to see evidence of a firms’ processes to give them confidence around key risk areas.
Furthermore, the brand damage firms face if they aren’t able to identify specific cases of money laundering could be enough to put even healthy enterprises out of business. Moving to a form-free future eases the reliance on paperwork and removes these core risks to a business.
Beyond improved risk management and security, automated data collection will significantly improve the customer experience by enabling customers to fill out forms in a user-native way, either on their phones or computers.
However, that’s not to say it’s simple. This is a substantial shift in how we think about paperwork – something that has been at the centre of our culture for thousands of years. Before we get to a fully paperless world, there are a few barriers to overcome.
Barriers to toppling criminals’ House of Paper
One such barrier is the rising prevalence, and anxiety surrounding, cyberattacks. Businesses who are already resistant to new technologies have seen what is happening with cyberattacks and shut their doors to further digitalisation.
The other side of this coin is a persistent hesitancy among customers to share their data. This is understandable in an age of popular rhetoric around the dangers of data sharing.
To tackle both of these issues, maximum transparency is needed to move to a paperless world. It is important for every layer of permissions to be conveyed, and for firms to make it clear to customers that their data is in their hands. They will know what data goes where, who the end-person they are sharing it with is, and why they are sharing it.
For smaller businesses, who lack immediate access to the right knowledge and resources, time is also a barrier. The ability to look past today and focus on what is happening tomorrow is frequently deemed a luxury. Instead, they will often only make significant changes when pushed to by a regulator. And still then, it takes a specialised, strategic thinker to deliver the necessary changes, which they often don’t have to hand among their limited human resources. This is when outsourcing digital transformation to third-party providers can really count, as technology can not only speed up time consuming processes, but support businesses in only collecting the data they need, meaning there are fewer piles of paper to sift through.
Halting the heist
While Money Heist the show might be coming to an end, businesses everywhere need to turn to a form free future to prevent criminals hiding behind the paper trail.
When done properly, the benefits of a form-free future such as improved security, smoother customer experience, and a happy regulator, can help businesses deal with severe negative outcomes, such as professional indemnity insurance, brand damage, or regulatory fines. Moving away from forms will also prevent money launderers and fraudsters alike from hiding behind paperwork.
To become form-free, we must make sure we’ve done the leg work. That starts with ensuring that day-to-day processes like signing and submitting forms are digitally enabled, allowing customers to provide their data online safely and easily. Leveraging open banking technology to create a form-free future means businesses can transform how they request, prepare and verify clients’ financial information, and ultimately move towards a paperless, time-rich, criminal-proof future that can more easily avoid a Money Heist.
Tom Lyes is Head of Legal and Property at Armalytix.