The G20’s initiative aimed at making cross-border payments faster, cheaper, more transparent, and inclusive could potentially lead to heightened risks of fraud and money laundering, according to a new report.
Since 2021, the G20 has been working on a “Roadmap for Enhancing Cross-border Payments,” which seeks to reduce costs and improve the speed, accessibility, and transparency of international payments. However, the Future of Financial Intelligence Sharing (FFIS) has raised concerns regarding insufficient integration of economic crime security measures within this framework. The report suggests that the push for quicker payments may undermine key aspects of existing processes designed to prevent economic crime, specifically the ability to screen transactions and recall payments before they settle across borders.
The FFIS analysis indicates that none of the G20’s original targets, the 2023 progress report on the roadmap, or the Bank for International Settlements’ “Project Nexus” have adequately addressed the heightened risks of fraud and money laundering associated with expedited cross-border payments.
To address these concerns, FFIS advocates for "economic crime security by design," emphasizing the need to incorporate security measures early in the policy development process for payment reforms. This approach calls for a cultural shift within G20 institutions involved in these reforms, recognizing that the responsibility for economic crime security should be shared.
For further insights, you can read the full report here.
Additionally, you can learn more about payments at NextGen Nordics on April 23, 2024.