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The importance of financial intelligence

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In the economic arena, financial intelligence, or FININT, is increasingly pivotal. With international financial crime near its highest level since the 2008 financial crisis, FININT has become ever more necessary as a tactic both for stopping criminals and for enforcing laws and regulations.

FININT is the compiling of information regarding the financial affairs of certain significant entities in order to determine their capabilities and predict their future actions. Generally speaking, FININT is used in the context of financial crime and law enforcement, but this is not necessarily the case.

FININT is especially useful in detecting money laundering. Money laundering is generally connected with other crimes, such as drug trafficking, and it is responsible for the illegal migration of billions of dollars across international borders every year. By collecting large amounts of FININT, both organisations and governments are able to discover suspicious persons and determine whether any financial crime is being committed and, if so, what it is. Due to anti-money laundering regulations, banks are required to provide governments with large amounts of FININT, including clients’ personal and transaction data.

Without these anti-money laundering regulations, it would be incredibly difficult to compile useful quantities of FININT. Banks and other financial institutions are the parties that most frequently deal directly with financial criminals, and, as such, they are the parties most likely to possess information that could prevent financial crimes and apprehend perpetrators.

Some examples of the anti-money laundering laws that require financial institutions to provide the government with FININT are the United States’ Bank Secrecy Act, the Right to Financial Privacy Act, and the Gramm-Leach-Bliley Act. Each of these acts requires different reports to be made to FinCEN by financial institutions under certain circumstances, and they enforced very stringently. Most American institutions that deal directly with financial transactions have to consistently file Currency Transaction Reports, Negotiable Instrument Logs, and Suspicious Activity Reports so the government can effectively compile FININT. Without these contributions of FININT, tracking down money launderers would be almost impossible.

In addition to the gathering of raw FININT, there are also many different types of financial intelligence analysis. Some problems that can be solved by financial intelligence analysis are determining which areas are safe havens for criminals’ profits, learning which housing tenants are high-risk based on their housing history, tracking where large sums of money have disappeared to, stopping people who avoid taxes by covertly moving money out of a tax-levying country, and tracking down remittances and money laundering to certain terrorist cells and organisations. Many countries have dedicated organisations and bureaus that are responsible for completing these tasks, and government officials also play a large role. Without FININT, it would be difficult—if not impossible—to accomplish these tasks. Large amounts of financial intelligence are key for both tracking down and preventing crime.

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Originally published 02 July 2014, updated 26 March 2024

Disclaimer: This is for general information only. The information presented does not constitute legal advice. ComplyAdvantage accepts no responsibility for any information contained herein and disclaims and excludes any liability in respect of the contents or for action taken based on this information.

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