Financial crime threatens national security, requires joint effort

Rathi highlighted the rapid evolution of financial crime, noting it is more technologically advanced, organized, and interconnected than ever.

Organized criminal groups operate across borders, blending fraud, money laundering, sanctions evasion, and cyber-enabled crime.

These activities divert funds from productive investment, eroding trust in the financial system and impacting economic growth.

The proceeds often fund heinous crimes with significant human costs, both domestically and internationally.

Rathi stressed that the financial system is exploited as part of this supply chain, with increasing links to state actors deliberately weakening institutions and exploiting systemic openness.

This makes the fight against financial crime a fundamental question of economic and national security, demanding a broad and adaptable response.

Traditional approaches to combating financial crime, often organized around institutional boundaries, are no longer sufficient against networked threats.

Rathi likened current efforts to a "whack-a-mole" game, where threats disappear only to reappear elsewhere, often exploiting gaps in information sharing or responsibility.

He advocated for a radically different operating model focused on outcomes, starting with consumers as the first line of defense, equipped with tools like Firm Checker and InvestSmart.

The FCA's authorization gateway is crucial for preventing harm, and the new post-EU regulatory payments regime should follow this model.

Rathi underscored that all stakeholders, including firms, regulators, government, and law enforcement, are on the same side against criminals, necessitating a system-wide effort.