Stuart Clarke, CEO of Blackdot Solutions
Financial Intelligence Units (FIUs) are on the front line in the battle against financial crime. Designed to bridge the gap between financial institutions and law enforcement, their responsibilities include assessing suspicious activity reports (SARs) submitted by banks and other regulated companies and, increasingly, carrying out proactive investigations into any sectors, topics or regions associated with certain risks. In this line of work, robust intelligence gathering is central to FIUs’ success.
Yet the current level of geopolitical risk, rapid development of AI, and ongoing increase in cybercrime is making financial crime more complex and authentic information harder to attain. In this volatile landscape, it’s never been easier for criminals to hide behind false identities, and data has never been spread over so many sources.
For FIUs and banks alike, traditional processes of information collection and analysis are no longer enough to contend with this data-saturated world of evolving threats. They need a variety of sophisticated tools and processes to unmask the criminals behind financial crime. And one essential method is open source intelligence (OSINT).
Mind the OSINT gap
All of the data online that is publicly or commercially available is called open source data. This information can be found in a host of places, such as news publications, public social media accounts, online forums, official corporate databases like Companies House, and even harder-to-access sources like the dark web.
OSINT is the targeted collection and analysis of this open source data to produce actionable intelligence; it’s a technique that enables investigators to draw out insights that are not always apparent in the raw data. The process can produce intelligence of such value that it is now essential to law enforcement and journalism – but it is not yet considered fundamental for those working in financial crime.
OSINT tools can give FIUs and banks the ability to determine risk quicker and prevent criminal activity by providing unprecedented access to external connections and digital evidence far beyond manual and Google searching. Yet they’re frequently underused, with banks investing millions in transaction monitoring, for example, but not in actually identifying the faces and networks behind economic crime. With SARs increasing around 20% year-on-year, this is an issue that needs much more focus, with reports lacking key information needed to close cases quickly and accurately..
For FIUs, there is a different challenge. While Egmont Group research from 2023 shows 97% of FIUs use OSINT in some form, there is a massive gap in how the process is carried out. The same percentage, for instance, use search engines for OSINT, but just 31% have access to an OSINT database and technology. Given the rapid rise of AI in particular, this reliance on manual searching could leave these agencies several steps behind criminal networks.
How OSINT platforms make open source data actionable
The most common OSINT challenge cited by FIUs in the research was “potential information overload”, something that closely aligns with experiences in the financial sector: for example, Dun & Bradstreet research from last year showed that 64% of compliance teams had to reject potential customers due to a lack of risk visibility and an overload of false-positive matches. Considering how much data now exists on the internet, this is unsurprising, especially if teams are not equipped with the necessary technology to help collect and sort relevant information.
Therefore, within this environment, one of the key obstacles is turning open source data into actionable, authentic insight. OSINT platforms go far beyond manual investigation and can enable investigators to sift through content quicker and more intuitively than manual searching methods allow.
The platforms can automatically gather and process vast amounts of data from every publicly available source and present it to investigators in a digestible manner. This can transform processes such as mapping complex entity structures to discover possible shell companies or trying to locate public user profiles for a subject of interest, which are often very time consuming and error prone.
Crucially, by being able to harness OSINT more effectively, FIUs and banks can discover hidden risks and connections between companies or people, making it a valuable aid in combatting money laundering and network-based crimes. It also gives them a secure way to access data sources they might be blocked from, like the dark web.
Through automating repetitive tasks, teams then have more time to analyse the data provided and ensure its veracity. This helps to speed up investigations, reduce false positives, and ultimately close more cases.
OSINT: case closed
Nearly every crime has a financial motivation in some manner. As such, enforcement agencies like FIUs – whose purpose is to fight financial crime – and banks are in a pole position to confront all types of crime, as discovering and cutting off access to the proceeds of crime is one of the best methods to combat it.
But both sectors are navigating a considerable OSINT gap in gathering intelligence to prevent this crime. Banks are producing patchy SARs because of a reliance on internal data, supplemented by occasional Googling. FIUs must then spend considerable time plugging intelligence gaps in SARs. If banks were to use OSINT to produce more comprehensive SARs, then they would contain more actionable intelligence and be better placed to fulfil their purpose of fighting financial crime.
On the other hand, the vast majority of FIUs are already using OSINT to not only plug the gaps in SARs but also to conduct further investigation. They are experiencing all the challenges of conducting effective OSINT and would benefit from investment in technology. This would help them to fight crime faster, identify more criminals and attain new insights.
Above all, in a world where crime is more complex and data increasingly abundant, the better FIUs and banks can turn open source information into actionable intelligence, the more effectively they can get cases closed.
