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Banks find AML "Ineffective" because the premise is erroneous. KYC is a sham because bankers don't actually know their customers and checking that you have a va

Banks find AML "Ineffective" because the premise is erroneous. KYC is a sham because bankers don't actually know their customers and checking that you have a valid ID before you can open an account has no value. Criminals, or their straw men, have a valid ID. To detect crime you need detectives to investigate crimes. The transaction record by itself means nothing because the banks have no way to know what any of the transactions are actually paying for. But if you independently know that someone is buying cocaine or selling state secrets then you don't need their financial records to arrest them. Digging into anybody's Facebook isn't going to change that because posting about your criminal activities on a public forum is already how dumb criminals get arrested. This is nothing but a data grab by the banks.

badcppdev 2y ago
I agree with you. I think the only solution is for politicians to stop being soft on crime by funding police, prosecutors, courts, prisons, and rehabilitation services (rehab for both criminals and addicts). In addition the various tax authorities need to be empowered and funded to investigate tax fraud of all kinds and if caught then people need to be sent to prison rather than allowed to buy their way out of a sentence.
- AnthonyMouse 2y ago
  Most of that stuff isn't even related to this. Corporations and rich people don't avoid taxes by lying to banks, they avoid taxes by hiring tax lawyers or lobbying the government. The best way to put the drug cartels out of business is to let Pfizer and Merck beat them on quality and undercut them on price and then use the tax money to fund rehab and education programs. The actual crimes this is supposed to prevent aren't all that common, and to the extent that they aren't prosecuted it's largely because the perpetrators have political power -- or are themselves nation states -- not because we don't have enough prosecutors to do it. Especially if we would actually put the drug cartels out of business in the aforementioned way. We certainly don't need more people in prisons -- largest prison population in the world, how's it working?
- zeroCalories 2y ago
  I suspect that this is more about detecting stuff like scammers and laundering, not people buying drugs. Unless we start drone striking Indian call centers or start doing full blockades on Russia the only solution is to work on international relations so that these crimes can be adequately investigated.
rahimnathwani 2y ago
Even if a piece of information isn't informative on an individual basis, it might provide improve the performance of a model that combines it with other inputs. You don't need to posting about doing crimes for your FB profile to be useful for risk assessment. Your connections or other posts (e.g. about how some emergency means you're suddenly short of cash) could contribute to an elevated score. The proposal doesn't go into much detail about how they imagine it will work, but it sounds like they're just saying that a statistical model (based on a larger set of data) would be more useful than a set of rules based on a tiny set of inputs. This seems entirely reasonable. Here is the relevant paragraph: Input data for MSA platforms should incorporate not only transactional data, customer static data and internal reference lists, but also other dynamic behavioural customer information where proportionate to the risk (e.g. device ID, IP addresses). Using an RBA, input data may also include data from reputable external, publicly available sources, including information on company structures, Ultimate Beneficial Owners (UBO), and watch lists, as well as complementary sources such as market data and verified customer social media accounts. Finally, FIs should establish robust data governance and quality control frameworks.
- AnthonyMouse 2y ago
  > Your connections or other posts (e.g. about how some emergency means you're suddenly short of cash) could contribute to an elevated score. This sounds more like a way to send desperate people into a death spiral by raising interest rates or denying credit availability right at the worst possible moment than any kind of system that would prevent crime. > The proposal doesn't go into much detail about how they imagine it will work, but it sounds like they're just saying that a statistical model (based on a larger set of data) would be more useful than a set of rules based on a tiny set of inputs. This seems entirely reasonable. It's implying they want to invade everyone's privacy to set up a hallucinatory black box that destroys lives at random under the guise of... I'm not even sure what this is supposed to do. It's not going to yield anything that would be useful in a prosecution so it's more like opaque government-facilitated denial of service without due process. Far from reasonable, it's total crap.
  - rrnechmech 2y ago
JohnFen 2y ago
Not to mention the risks to those of us who have no social media presence at all. Will that be considered a big red flag all by itself?

badcppdev 2y ago

I agree with you. I think the only solution is for politicians to stop being soft on crime by funding police, prosecutors, courts, prisons, and rehabilitation services (rehab for both criminals and addicts). In addition the various tax authorities need to be empowered and funded to investigate tax fraud of all kinds and if caught then people need to be sent to prison rather than allowed to buy their way out of a sentence.

AnthonyMouse 2y ago
Most of that stuff isn't even related to this. Corporations and rich people don't avoid taxes by lying to banks, they avoid taxes by hiring tax lawyers or lobbying the government. The best way to put the drug cartels out of business is to let Pfizer and Merck beat them on quality and undercut them on price and then use the tax money to fund rehab and education programs. The actual crimes this is supposed to prevent aren't all that common, and to the extent that they aren't prosecuted it's largely because the perpetrators have political power -- or are themselves nation states -- not because we don't have enough prosecutors to do it. Especially if we would actually put the drug cartels out of business in the aforementioned way. We certainly don't need more people in prisons -- largest prison population in the world, how's it working?
zeroCalories 2y ago
I suspect that this is more about detecting stuff like scammers and laundering, not people buying drugs. Unless we start drone striking Indian call centers or start doing full blockades on Russia the only solution is to work on international relations so that these crimes can be adequately investigated.

rahimnathwani 2y ago

Even if a piece of information isn't informative on an individual basis, it might provide improve the performance of a model that combines it with other inputs. You don't need to posting about doing crimes for your FB profile to be useful for risk assessment. Your connections or other posts (e.g. about how some emergency means you're suddenly short of cash) could contribute to an elevated score. The proposal doesn't go into much detail about how they imagine it will work, but it sounds like they're just saying that a statistical model (based on a larger set of data) would be more useful than a set of rules based on a tiny set of inputs. This seems entirely reasonable. Here is the relevant paragraph: Input data for MSA platforms should incorporate not only transactional data, customer static data and internal reference lists, but also other dynamic behavioural customer information where proportionate to the risk (e.g. device ID, IP addresses). Using an RBA, input data may also include data from reputable external, publicly available sources, including information on company structures, Ultimate Beneficial Owners (UBO), and watch lists, as well as complementary sources such as market data and verified customer social media accounts. Finally, FIs should establish robust data governance and quality control frameworks.

AnthonyMouse 2y ago
> Your connections or other posts (e.g. about how some emergency means you're suddenly short of cash) could contribute to an elevated score. This sounds more like a way to send desperate people into a death spiral by raising interest rates or denying credit availability right at the worst possible moment than any kind of system that would prevent crime. > The proposal doesn't go into much detail about how they imagine it will work, but it sounds like they're just saying that a statistical model (based on a larger set of data) would be more useful than a set of rules based on a tiny set of inputs. This seems entirely reasonable. It's implying they want to invade everyone's privacy to set up a hallucinatory black box that destroys lives at random under the guise of... I'm not even sure what this is supposed to do. It's not going to yield anything that would be useful in a prosecution so it's more like opaque government-facilitated denial of service without due process. Far from reasonable, it's total crap.
- rrnechmech 2y ago

JohnFen 2y ago

Not to mention the risks to those of us who have no social media presence at all. Will that be considered a big red flag all by itself?