20170808 Nigel’s August 2017 Newsletter

I’m not the only one who finds an outlet outside work: in Hong Kong, old pal Jeremy Platts, the doyen of counter-money laundering experts on that barren rock with nary a drop to drink (I’m paraphrasing from, I think, Palmerston – he said “nary a house on it”) has a band, Last Orders. They play lots of covers of fun stuff : they’ve got a new website at www.lastordershk.com . Ask them nicely, and throw money at them, and they’ll play at your corporate gigs, or just pop down to The Wanch or one of their other regular places. The Wanch is celebrating 30 years of live gigs this year, incidentally.

Talking of entertainment, my son, James, plays a character in the DBS Bank advertising series, Sparks. There are several stories revealed as episodes, with a constant theme of a small team within DBS. Episode 7 was released recently: you can start at the beginning of the series here: https://www.youtube.com/watch?v=IWjYgE09GqQ. James (billed as James Yang, one of several names his former record company tried out for him to find one that everyone could say!) plays Jasper Wu.

I’m constantly amazed how often I hear, in cars, as ringtones, on the radio, his three year old song Long Time No See (https://www.youtube.com/watch?v=5gx4LiFCfUU). He’ll be back in the studio, soon, recording an album of original songs.

I’m on YouTube, too. First, there are some criminals who are using YouTube to market, or appear to market, illegal copies of my books. I’ve told YouTube to remove them but they take the view that they are part of Google and they can do as they like. That, to my mind, means they are facilitating criminal conduct, and, depending on exactly what the proceeds of that crime is used for, arguably, potentially, providing material support for terrorists.

But I’m also on YouTube intentionally.

There’s a video, produced by Thompson Reuters, about why we need to focus on developing skills of the people in organisations, not to prescribe detailed systems and not to rely on technology – https://www.youtube.com/watch?v=0994KY9NvTg .

And that brings us back to the silly season: the big story this week is the failings at Commonwealth Bank. When the story first broke, we at BankingInsuranceSecurities.com said we had very little information but we expected that it would ultimately be found that there was too much reliance on technology that wasn’t up to the job. Several days later, that’s effectively what the bank has said.

It’s called it “coding errors” which means one thing: someone decided to delegate identification and reporting to an automated system that was not properly designed.

This is the big risk with all automated systems: they are designed by techies, not by risk managers; they are built to a cost, not aimed at perfection – it’s as if good is good enough and, clearly, it is not.

That’s exactly why, after years of research, I wrote “Understanding Suspicion in Financial Crime.”

It’s a long treatise that brings in dozens of concepts and arguments and sets out why people do not identify suspicion when they should and why, if they do, they often do not report it.

There are details of the book at countermoneylaundering.com .

This year, I’m touring a series of seminars based on the book: next stop is Hong Kong in September, then Sydney and Melbourne in October. Details and booking are at www.financialcrimeforum.com.

I hope your mid-year is silly – in a good way.

Nigel Morris-Cotterill
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© 2016 Nigel Morris-Cotterill
All rights reserved.

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