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The 5 big challenges financial institutions face in reporting child sexual exploitation

August 18, 2022
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A complex international industry and a lack of access to easy to apply, external information can make it hard for financial institutions to help combat child sexual exploitation (CSE). But new methods of curating and classing information can now help the sector in its response to these crimes. 

As with many crimes, one way to help prevent victimisation is to follow the money. Financial institutions can play a huge role in helping combat the global issue of child sexual exploitation (CSE). CSE video materials and livestreaming are growing in volume, and with it the risks that financial institutions are carrying the associated payments. With oversight of the transactions, financial institutions are now poised to help tackle CSE on one of the most important fronts.

In her report Combatting child sexual abuse in a digital era, Refinitiv’s Threat Finance Research Manager, APAC, Gökçe Arslan Kumar dived into some of the issues that might hinder these attempts to help – and how to get around them.

 

Let’s take a look at some of those issues.

 

5 challenges facing financial institutions fighting CSE:

1. Low transaction values. Many of the digital transactions related to CSE are relatively low compared to other major red flags in the financial world. That makes it tougher for financial institutions that deal with thousands, or even millions, of transactions each day to recognise problematic ones.

2. Limited information in high-risk jurisdictions. Poor access and sometimes obscure dialects make it difficult to find important information in parts of the world where digital CSE exists. This makes building links between offenders difficult.

3. Confusing naming conventions. Cultural naming practices and aliases created to hide activity both make it harder for screening systems to pick up on suspicious transactions relating to CSE.

4. False positives. Financial institutions need to avoid erroneously associating a customer or client to CSE. Uncertainty can impact the way they screen for offenders – and might either inappropriately deny service to a customer or set aside offending suspicions incorrectly.

5. Lack of capability. Even with the best intentions, not every reporting institution has the tools and knowledge required to fight a battle on the ever-changing frontlines of the digital landscape. Sharing information between financial organisations, especially in different legal and geographic jurisdictions, can also prove challenging.

 

Navigating the challenges

 

With a better understanding of the issues, we can start developing solutions. Refinitiv World-Check, a commercial organisation offering organisations risk intelligence information, has unveiled a new solution with its Special Interest Categories (SICs).

A regulated, structured SIC system provides organisations an easier way to apply external information. In terms of CSE, this can mean not only fewer offenders slipping through the cracks, but also more filtering power that can limit false positives and provide richer, more accurate data on which to act.

The introduction of SICs highlights the importance of ICMEC’s long-term partnerships with organisations such as Refinitiv. We’ve worked together for a decade, going back to the earliest efforts of World-Check when the company joined the ICMEC Financial Coalition Against Child Sexual Exploitation. 

It’s promising to see that, after increased in awareness and understanding, organisations such as World-Check can continue to evolve the fight with new programs such as its SICs.

In a time where people are expecting more from businesses around the world, ICMEC looks forward to working with more and more global data firms and technology platforms to use their extensive reach and resources to fight CSE. 

If you’d like to find out more about how to get involved, get in touch today

Download the full  Refinitiv Expert Article

 

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The 5 big challenges financial institutions face in reporting child sexual exploitation

  A complex international industry and a lack of access to easy to apply, external information can make it hard for financial institutions to help combat child sexual exploitation (CSE). […]

Read more »

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