The UK is witnessing a significant collaboration between major banks and law enforcement agencies to combat economic crime. In a landmark move, Barclays (BARC.L), NatWest, and Lloyds are among seven banks working closely with the National Crime Agency (NCA) to share customer data, aiming to disrupt criminal gangs, money laundering activities, and the flow of “dirty money” into the country. This initiative is part of the UK’s broader efforts in combating dirty money, which has become increasingly critical following global economic shifts and heightened scrutiny on financial crimes.
A year ago, Reuters reported on trials involving over six banks, including NatWest and Lloyds (LLOY.L), which were working with law enforcement and government agencies to share intelligence on client accounts that raised economic crime concerns. This collaboration has now expanded, with the NCA confirming that the project, which commenced in May, includes voluntary data-sharing agreements with Santander (SAN.MC), TSB (SABE.MC), Metro Bank (MTRO.L), and Starling Bank. Already, the initiative has identified eight new crime networks potentially exploiting the financial system.
Banks and Law Enforcement Collaboration
The UK’s intensified efforts against economic crime, estimated by lawmakers to cost the economy up to £350 billion ($452 billion) annually, have gained urgency following Russia’s 2022 invasion of Ukraine. This event highlighted how kleptocrats and criminals use the UK to launder and conceal illicit funds. Adrian Searle, director of the NCA’s National Economic Crime Centre, revealed that three crime networks have been referred to the NCA’s intelligence division for further investigation. Additionally, new intelligence related to ten major investigations has emerged from this collaboration.
“The fundamental purpose is to unify the efforts of law enforcement, government, regulators, and the private sector in combating dirty money,” explained Searle.
Data Protection and Privacy Concerns
Running until October, the UK program includes seconding bank staff to the NCA, forming a team of 15 to 20 intelligence officers, data scientists, and analysts. This team tracks money movements indicative of criminal behavior while ensuring the protection of legitimate customers. Historically, banks have hesitated to share customer data due to concerns over European data protection and privacy laws, fearing litigation from customers whose accounts might be locked during investigations. However, the NCA and participating banks maintain that only accounts with multiple clear indicators of economic crime are scrutinized. Legal teams have ensured that all data sharing adheres to acceptable risk levels.
“We are deeply conscious of the issues around data privacy,” said a senior banking executive involved in the trial. “Our terms and conditions as banks allow us to share information without notifying the customer because this ultimately fulfills our legal obligations to detect crime and prevent financial harm.”
Oversight and Future Goals
The Financial Conduct Authority (FCA) oversees the project, increasing its appeal to participants, according to a banking executive. This initiative builds on an earlier pilot between the NCA, NatWest, and Lloyds from October 2021 to February 2022. That pilot tested the practicality and benefits of combining bank and crime data to identify and disrupt economic crime, leading to one arrest and charge.
Despite the initiative’s success, the number of accounts identified represents only a “very small fraction” of the total in Britain, according to the NCA. The ultimate goal is to use data for real-time crime prevention, though significant progress is needed.
This groundbreaking collaboration between the banks and the National Crime Agency represents a significant step in the UK combating dirty money. By sharing customer data and working together, these institutions aim to disrupt criminal activities and protect the financial system. While challenges remain, the initiative’s early successes demonstrate the potential of unified efforts in combating dirty money.
