Money flows into and out of financial institutions daily, and it’s no secret that some of those funds stem from illicit transactions in the supply chain. It’s an unfortunate and often-ignored reality that human and wildlife trafficking are common across the globe, and extend to different parts of how the global supply chain operates.
According to the International Labour Organization, forced labor in the private economy generates an estimated $150 billion in illegal profits per year. It’s crucial for enterprises to closely examine their partnerships to ensure they’re not unknowingly working with traffickers, and new advancements in artificial intelligence are helping them do just that.
Many industries such as restaurants, hotels, construction and farming rely on a never-ending supply of cheap labor as a means to keep costs low. In 2017, ILO found that the largest share of labor-trafficked adults are domestic workers (24%) followed by construction (18%), manufacturing (15%), and agriculture and fishing (11%) sectors. Criminal organizations have made the most of this system, through the anonymity of shell companies, infiltrating industries and using human or wildlife trafficking as a way to become as profitable as possible. Traffickers have leapt at the increasingly global transport network and supply chain as a means to increase their business and fly under the radar, leaving countless individuals trapped as victims of these crimes.
While these criminals often succeed in remaining anonymous, companies can take steps to ensure they’re not inadvertently working with traffickers. Criminal organizations leave financial footprints and data trails behind them, and despite the fact that they use tactics to go undetected, improvements in technology, tracking and AI make it easier for ethical companies to root out criminals, investigate and disrupt their operations.
Identifying Trafficking Networks
Traffickers make themselves difficult to detect, as the shell companies they create to hide their criminal behavior usually look legitimate on paper. So how can organizations identify companies that are engaged in trafficking? Red flags that may indicate a company is not what it seems include:
NGOs, charities and local groups have been on the front lines trying to identify and prosecute traffickers through the use of on-the-ground human intelligence. This intelligence often relies on hearsay and personal testimonies, which are invaluable. However, these efforts are often limited by country borders and lack the international view needed to spot many key indicators of trafficking.
By using AI, it’s possible to identify trafficking indicators and patterns, and share the collected results and data with regulatory bodies or law enforcement to help stop trafficking directly.
Deploying Tech Solutions
Financial institutions are in a unique position to uncover and report traffickers by using the large amounts of data they already have to identify patterns and intelligence gaps. Organizations can employ technologies powered by AI, such as entity resolution and graph analytics, to make sense of that data and accurately hone in on suspicious accounts, investigating whether they may be involved in trafficking and other crimes.
Entity resolution uses advanced AI and machine learning to connect billions of data sources to scale and create a single customer (or customer’s customer) view, even if the source data is disparate and of poor quality. By deploying this technology, financial institutions can help uncover slight name changes, dates of birth, multiple addresses, account inconsistencies and other red flags (small or large) that may indicate crime along the supply chain. Once a single view of the data is obtained, network generation allows the financial institution to create "context" that can help it better understand the traffickers’ movements, including monitoring shipping and trade routes and tracking money movements through shell companies.
This technology can not only be used on the front end to detect and avoid supply chain risks, but also to support and boost internal investigations as well as those conducted by law enforcement. Many traffickers have yet to be identified by local law enforcement agencies, but companies that use entity resolution and graph analytics can bring attention to traffickers and other criminals that might otherwise go undetected.
Trafficking is a crime that occurs frequently along the supply chain, but it shouldn’t be ignored or accepted as a part of doing business in the global economy. It’s not just the responsibility of NGOs, charities and law enforcement agencies to find and investigate criminal organizations. It’s up to everyone along the supply chain to monitor their data and do their part to make it as difficult as possible for criminal groups to take part in trafficking.
With the right technology in place, companies can do their due diligence and meet their moral obligations to identify and prosecute trafficking wherever it occurs.
Clark Frogley is Americas head of financial crime solutions at Quantexa.
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