Global: Seven Banks Collaborate with UK Law Enforcement in Major ‘Dirty Money’ Crackdown

Barclays, NatWest, and Lloyds are among seven banks collaborating with the National Crime Agency (NCA) in a groundbreaking initiative to combat criminal gangs, money laundering, and illicit financial activities in the UK. This project, described as the largest of its kind globally, marks a significant effort to tackle “dirty money” flowing through the financial system.

According to Reuters, more than six banks, including NatWest and Lloyds, were previously involved in trials with law enforcement and government agencies. These trials focused on sharing intelligence about client accounts suspected of economic crimes. The NCA’s new project, which went live in May, includes voluntary data-sharing agreements with Santander, TSB, Metro Bank, and Starling Bank. This initiative has already identified eight new criminal networks potentially exploiting the financial system.

Britain’s intensified focus on economic crime follows Russia’s 2022 invasion of Ukraine, which highlighted how kleptocrats and criminals have used the UK as a haven for laundering and concealing illicit funds. Adrian Searle, Director of the NCA’s National Economic Crime Centre, stated that three criminal networks have been forwarded to the NCA’s intelligence division for further investigation. The project has also provided new insights into ten of the agency’s major investigations, though specific details were not disclosed.

“The primary aim is to unify the efforts of law enforcement, government, regulators, and the private sector in combating economic crime,” Searle said.

In a similar vein, Singapore introduced the COSMIC (Collaborative Sharing of Money Laundering/Terrorist Financing Information and Cases) platform with six banks in April. However, Searle noted that COSMIC was led by the local regulator, not law enforcement.

Data Protection and Privacy

The UK initiative will run until October, with bank staff seconded to the NCA to form a specialized team of 15 to 20 intelligence officers, data scientists, and analysts. This team will investigate financial transactions indicative of criminal behavior while ensuring that legitimate customers are unaffected.

Banks have historically been cautious about sharing customer data due to concerns over European data protection and privacy laws, which could lead to litigation from customers whose accounts are investigated. However, the NCA and participating banks stress that only accounts with clear indications of economic crime are shared. Banks’ legal teams have ensured that all data-sharing activities adhere to acceptable risk standards.

“We are acutely aware of data privacy issues,” said a senior banking executive involved in the project. “Our terms and conditions allow us to share information without customer notification, as this is necessary for fulfilling our legal obligations to detect and prevent crime.”

The Financial Conduct Authority (FCA) is overseeing the project, which has been crucial for its progression, according to the banker.

This initiative builds on an earlier pilot conducted between the NCA, NatWest, and Lloyds from October 2021 to February 2022. That pilot demonstrated the value of combining bank and crime data to better identify and disrupt economic crime, leading to one arrest and charge.

Despite these efforts, the volume of identified accounts represents only a “very small fraction” of the total in Britain. The long-term goal of the initiative is to enable real-time data insights to prevent crime, although Searle acknowledged that this remains a distant objective.