Your instinct can stop dirty money
In a world in which automation is rapidly changing the way we work, what does the future hold for human intuition? For lawyers and accountants tackling the scourge of dirty money, professional experience remains front and centre.
“Context is everything when identifying suspicions of money laundering,” says Sophie Falcon, integrity and law manager at the Institute of Chartered Accountants in England and Wales (ICAEW).
With artificial intelligence helping to flag suspicious activity more and more, particularly in banking, there is a growing sentiment that combining AI with professional expertise leads to better results than using either in isolation.
“An accountant’s professional intuition comes into play when identifying things that may seem incongruous,” says Falcon. “Maybe you’ve had a long relationship with a client and they do something that might not make sense based on your knowledge of their affairs.
“This could be transactions involving assets you didn’t know they had, or when they’ve asked for a transaction to be structured in an unusual way, compared to how they would normally do something.”
An integral part of the training towards the ACA, the ICAEW’s industry recognised chartered accountant qualification, involves familiarising yourself with the body’s code of ethics. It warns that an accountant’s objectivity can become impaired by what Falcon describes as “familiarity from a long relationship with a client”.
Falcon believes there are two qualities accountants and lawyers – by vocation, sticklers for accuracy – should fall back on when encountering suspicious activity.
“One of them is your professional judgement. The other is doing the right thing. As professionals we not only have to serve our clients, but also act in the public interest.”
Asked whether intuition can be taught, she says: “That comes back to the concept of professional scepticism. That is ingrained in our training.Knowing what to look for can be taught. As professionals increase their experience, knowledge builds, which helps you identify things that don’t look right.”
Professional firms have a duty to flag suspicious activity – and are also legally bound. A Suspicious Activity Report (SAR) is submitted online to the National Crime Agency by a company’s designated money laundering reporting officer (MLRO).
In January, the government announced it would provide £3.5 million to reform the SARs regime in a joint project with industry trade body UK Finance.
Falcon admits that “accountants are often concerned about the impact of making a SAR and the risk of damage to a relationship”, saying the ICAEW runs a helpline to advise on “that delicate balance” between client and professional.
She points out that accountants tend to interact with their customers often on a one-to-one basis. “Potential red flags could be when you have a client who is unusually anxious to complete a transaction quickly, or unable to justify why they need completion so quickly.”
For now at least, following your gut instinct is something that remains beyond the understanding of a piece of software.