Globally, anti-money laundering legislation is now old enough to get its own job, yet it hasn’t, and financial crime is at its highest level ever.
In South Africa we have had the FIC Act in operation for over 20 years, yet all the measures implemented in response to this legislation were unable to prevent or detect the illicit money that was moved (we’re talking billions of Rands, I would hazard closer to a trillion) in our period of state capture.
So, what now, what are we missing?
The FIC Act stipulates measures to be addressed with employees but are these enough? With what has transpired over the past while, the following thoughts come to mind:
Thought 1: Gold Mafia, the Al Jazeera Investigation that named personnel within banks in South Africa that were implicated in the financial crimes. There are a couple of other thoughts in there but let’s round it up to this main one.
Thought 2: An employee from Nedbank was assassinated by what appears to be a gang hit. In this article it was suspected that she would not cooperate with the syndicates.
Thought 3: Discussing the situation with some long-time colleagues in the Anti-Financial Crime industry, who are rather close to the flames, I got to discussing how the criminal infiltration starts. I had my own theories which proved to be much less subtle than what actually takes place.
So how does favour lead to infiltration?
It starts with a friendly client. Don’t get me wrong, these are great clients to have and make any client service agents’ day just that much better. After some time, the friendly client then asks for some help with a matter – something simple like please move my application closer to or on top of the pile. These favours are met with great appreciation which in turn makes the service agent that much happier. The grooming has started.
Where does the problem start?
At some point the agent, due to their grooming, crosses an ethical or policy line, be it by accepting a small gift, usually a small electronic payment in thanks for the extra effort. Or the aggregate of these.
The hooks are now in and once that line has been crossed the relationship quickly switches to the agent now operating under duress. Who are the criminals’ targets? They are usually those who are more financially constrained. Targeted persons are threatened with exposure of their so-called transgressions and the threat of dismissal, losing their only financial means. Being dismissed for these transgressions in the banking industry in South Africa could lead to being blocked from further opportunities in this industry – and all hope seems lost.
So where to next?
With the above background and knowledge of whistleblower models in operation, questions that immediately come to mind:
- Are enterprises doing enough to help employees discuss and bring forward their issues?
- In today’s corporate environment, can employee’s truly feel safe to approach their line managers and discuss circumstances and possible accidental transgressions without fear of having to face disciplinary measures that may include dismissal?
- Are line managers sufficiently equipped to manage such situations?
- Are corporates adequately equipped to provide security to all their employees?
- Top executives often have the necessary resources provided to them, but are they the only targets?
It appears, on face value, that when crime sets in, criminals target the so-called “little guys”, the very people who do not have the resources to protect themselves . Current perceptions and heeding what is reported with increasing frequency, it seems that taking a moral stand, could get you killed!
As management, we owe it to our staff to create an environment in which they feel heard and safe to air such approaches. Are we truly doing enough?