The FinTech FinCrime Exchange (FFE) initiative started over a year ago in the UK, and now has a community of over 47 fintechs discussing financial crime typologies and trends, to help strengthen the sector’s ability to detect and counter the global threat of financial crime. Following this success, the FFE aims to expand to the Netherlands. On May 30^th, it will kick-start its work in the Low Countries at its first meeting. In the run-up to this event, Holland FinTech sat down with Fintrail’s Rob Evans and Bunq’s Chiara Gamarra, who are spearheading the initiative, to talk about its origins and how it can enrich the Dutch fintech ecosystem.

Same threats, no cooperation, no forums

Evans states that the motivating factors for behind the exchange were threefold: shared threat environment, lack of cooperation, and a paucity in forums for financial crime. Here his organisation, Fintrail, the UK-based financial crime risk management consultancy for fintechs that founded the FFE, noticed their clients were all dealing with the same criminal entities and financial crime types, and Fintrail became frustrated that they could not bring these fintechs together. “We were also surprised at how few of the companies knew the compliance teams at their peers’ companies,” says Evans, “so they were struggling to coordinate even if they did identify activity that would help other fintechs.”

Additionally, he points out, there were no forums where fintechs could discuss financial crime and when there were, membership costs were prohibitively high for smaller companies, “which is unbelievable when you consider than the fight against financial crime should be collaborative.”

Setting up shop in the Netherlands: collaborating to increase resilience

The FFE has established itself in the UK as a destination for fintechs to share information and discuss their experiences around financial crime. But why make the move to the Netherlands? Answering this question, Gamarra says that, “seeing the success of FFE in the UK, we really think it has great added value for Dutch fintechs,” in that “many of the typologies we see [regarding financial crime] in the UK apply to Europe as well.” With the initiative, she thinks Dutch fintech will benefit from information-sharing amongst themselves, with its counterpart in the UK, and more Exchanges as the initiative expands to other places around the world.

Evans, being based in the UK where the initiative began, expands on the idea of the Exchanges growing into an international network by saying that the initiative is a way to build resilience in the fintech sector and, “casts some light on the real financial crime challenges and opportunities in the industry rather than basing them on speculation.”

The fact that the Netherlands already has several initiatives for Dutch banks regarding financial crime, with the Dutch Payments Association coordinating the most prominent, is not an issue, says Evans, due to the specific nature of fintechs and the challenges they face. In the UK, he says, while there are forums for public-private partnerships, fintechs have not readily been accepted to them and “they are not at the right level of detail or relevance to the fintech community,” adding that, “we don’t think that’s necessarily a bad thing though, because, for example, fintech delivery channels and product sets create unique risks that are not routinely replicated across traditional financial institutions.” This difference between fintechs and banks creates a critical need for information between them, adds Gamarra.

Key benefits of the FFE: learning, threat preparation, diversity

As the FFE has been up-and-running in the UK for over a year, its members find value in many ways. Evans locates membership value for current members in what they can learn from one another and specifically what new organisations can learn from more established entities. As companies can come together to discuss the threats they are facing, they can prepare themselves for combating these typologies, which is a significant benefit because criminal groups target vulnerable entities.

Companies in the FFE share knowledge and experiences through monthly meetings, their Slack-based community which provides direct contact between members, and publications. The Slack channel has been particularly productive, as many members are active on the channel, helping each other with identifying threats, something which, “will only become more powerful as we expand the network to other key hubs,” says Evans.

The UK group also contains a range of different companies, from P2P lending operations to crypto outfits and challenger banks, giving members both the benefits of being amongst their closest peers and an understanding of the broader issues facing fintechs regarding financial crime. And most importantly, “the network works,” he says, adding, “since we set up the FFE in the UK the members have collaborated to disrupt criminal activity related to human trafficking, fraud and money laundering and I think members are becoming stronger for it.”

The FFE not only acts as a discussion forum, but disseminates best practices on financial crime risk and compliance in the form of white papers. These papers also act to better inform law enforcement, relevant stakeholders, government, and regulatory bodies about the lived experiences of fintechs when it comes to financial crime.

FFE NL: membership outlook

The FFE is coming to the Netherlands, and they are looking for members. Specifically, any type of fintech company in the Netherlands can join, says Evans. Moreover, from their previous experience in the UK, compliance heads and individuals in security intelligence or operations usually populate their meetings, and they are looking for those in similar positions here in the Netherlands to join and actively participate in the initiative.

Membership is also free because, “we want to ensure as many fintechs as possible can join the community and we definitely don’t want budgetary constraints to be a reason why they don’t,” says Gamarra, adding, “the only ask is that people are collaborative and open, and they put in the required time and effort.”

By Elliot Lyons and Maurits de Nerée