What is the link between human trafficking/slavery and the Financial Services sector?

Simply put, where there is human trafficking, money changes hands.  Human trafficking and modern slavery are predicate offences for money laundering.

The financial services sector can combat this by leveraging effective controls to detect the diverse financial flows associated with these crimes and prevent the onboarding of traffickers.  For example, regulations such as the EU’s upcoming Corporate Sustainability Reporting Directives require the Financial Services sector to incorporate modern slavery into their due diligence controls and report publicly on their effort.

However, it’s not always straightforward for financial services companies to do this.   With the challenge of accessing up-to-date and accurate data, a tendency towards a siloed approach to data sharing, and the increasing reliance on remote or non-face to face business relationships, it can be difficult to detect these crimes.  During 2021, $21bn AML fines were imposed due to failings to detect modern slavery**.

Collaboration will help all parties in terms of working to combat these crimes.  By leveraging an ecosystem of peers, charities, NGOs and law enforcement, the financial services sector -in each country – can really make a difference.  Sharing information and data across these entities will help to identify, at the early stages, where there is a misuse of funds.

Equally, financial services can lessen the burden on victims by providing financial evidence in legal proceedings that supports the prosecutions testimony.

EY & BPFI Modern Slavery Hackathon, May 2023

We recently held an in-person event in Dublin with over 50 attendees, representing 25 organisations, across domestic and international banks, the Central Bank of Ireland, NGOs, vendors, Law Enforcement and consultants.

Attendees heard presentations, demonstrations and panel discussions from speakers who provided unique perspectives on modern slavery and how we can combat it.  This included insights from numerous thought leaders and the latest information from those on the front line, namely:

• Linda Latham, HSE, Director of Nursing Social Inclusion, gave a keynote on the impact modern slavery has on victims
• Pat Lordan, Detective Chief Superintendent, GNECB, represented the Garda perspective on money laundering and modern slavery
• Seána Cunningham, CBI, Director of Enforcement and AML, helped us understand the regulators perspective
• Neil Giles, Traffik Analysis Hub, CEO (Stop the Traffik), demonstrated how NGOs see Financial Services playing a role
• John McGrath, Leader of IBM Technology for Good, provided an inspiring demonstration of the Infinitech solution developed with Stop the Traffik
• Daniel Kelly, Detective Inspector Protective Services, helped us understand the intersection between “following the money” and the real-world impact of human trafficking and modern slavery.

As part of our brand commitment to building a better world, EY globally is…

• Developing a typology library to assist clients in understanding indicators of modern slavery. This can be used to build a data footprint as a foundation for developing a risk-based and data-driven controls framework.
• Investing in a dynamic, data-driven tool that leverages an intelligence-ecosystem and machine learning to help FS firms to identify their modern slavery risk. The tool aims to enrich FIs existing financial crime data in collaboration with select vendors that specialize in anti-modern slavery and reference data from law enforcement, NGOs and adverse media.
• Building a community through industry roundtables, hackathons and our broader network to explore the challenges in combatting modern slavery and collectively define a best practice anti-modern slavery approach.