Why Mapping Datasets is Crucial in the Global Fight Against Financial Crime

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Money laundering poses an inordinate threat; the Bank for International Settlements (BIS) estimates that between $2-$5 trillion is laundered globally each year, with less than 1% recovered. The Transparency Fabric, a joint initiative between GLEIF, Open Ownership, and OpenSanctions, is a ground-breaking collaboration that delivers hope in the fight against financial crime by enabling critical data sets to be efficiently matched, particularly in the context of cross-border and instant payments. Accessible, clean, and transparent data is the foundation upon which we can combat illicit finance. The Transparency Fabric will simplify and reinforce the screening and tracing of players in money laundering, terrorist financing, and sanctions evasion.

The lack of high-quality, global beneficial ownership data is the leading cause of friction during Anti-Money Laundering (AML) / Counter Financing of Terrorist (CFT) checks carried out as part of cross-border payment processing, according to a 2021 survey by the Financial Action Task Force. There is a need for trusted international entity identifiers to be embedded within accurate and up-to-date data on the beneficial ownership and control of corporate vehicles so it can be mapped to watch lists, including PEP lists, which also integrate the same entity identifiers. The Transparency Fabric illustrated how easy it could become to identify direct and indirect connections between businesses with an LEI and sanctioned persons and companies, resulting in quick and easy identification of people and companies with compliance risk.

The Transparency Fabric was a finalist in the G20 TechSprint 2023. The competition is hosted annually by the G20 Presidency and the Bank for International Settlements (BIS) to recognize best-in-class technology innovations that address challenges faced by the global regulatory and banking community. In 2023, the TechSprint Challenge was hosted in partnership with the Reserve Bank of India (RBI), and the focus was on finding solutions to cross-border payment challenges defined by BIS and the RBI. In particular, the Transparency Fabric was recognized as a technology solution that could reduce illicit finance risk.