Are human traffickers hiding in bank data?
While human trafficking may conjure up images of darkened tunnels and FBI raids, it’s also something banks can help uncover using data and analytics technology.
In the last several years, banks have become adept at mining data to comply with anti-money-laundering regulations. Much of that same data can also be used to detect signs of human trafficking.
“You don’t think of it as being a financial crime, but it is,” said Robert Voets, director of financial crimes and corporate security at Ion Bank in Naugatuck, Conn.
The $1.2 billion-asset bank has been using fraud detection technology from the tech vendor Verafin in areas like anti-laundering since 2013. Last year, the company added human trafficking alerts to its fraud solution. In the few months that Ion Bank has been receiving the alerts, it has forwarded some suspicious cases to local law enforcement, Voets said.
“It’s a real wake-up call,” said Voets, who was a police officer in Connecticut for 27 years before joining the banking industry. “You hear about human trafficking, but you never think of it as happening in your community. So when we get the alerts, we investigate further, and if there seems like something to it, we contact law enforcement.”
The alerts that indicate if a customer is potentially a trafficking victim or a perpetrator of trafficking activity are just a few months old, so there’s no public information or other indicators that the information Ion has passed along has led to a human trafficking conviction, Voets said. But he added that the bank has been impressed with the results so far.
“I'm sure in an immeasurable way this training will significantly enhance efforts to both save current victims and prevent future victims,” Voets said.
Some financial patterns that could potentially indicate human trafficking include credit card purchases on some classified-ad sites, several individuals with a common address depositing money into the same account, or multiple accounts transferring money to the same beneficiary, said Brendan Brothers, co-founder of Verafin. He added that the analytics tools can also cross-reference customer phone numbers to see if those same numbers appear on classified-ad pages where illegal services might be sold.
“There are patterns you can look at — lifestyle indicators and what people spend money on, for example — that can indicate suspicious activity,” Brothers said. “There’s a lot of ways you can parse the data.”
Though much of the same patterns and activity banks look for purposes such as AML compliance can be used to detect human trafficking, it’s not something banks have typically done until recently, said Micah Willbrand, anti-laundering and financial crimes expert at the consulting and technology company NICE Actimize.
“We are seeing a lot more activity in the last year or so of banks addressing the human trafficking issue,” he said. “Banks are being more proactive about it.”
And this newfound focus goes beyond technology, Willbrand added; some banks are starting to train front-line branch employees on how to spot trafficking. For example, it is a red flag if one man walks into a branch with women who appear to be there against their will.
Increased data sharing among banks to stop financial crimes could also help spot human trafficking, said Rivka Gerwitz, global director of product marketing at NICE Actimize.
“It’s more important than ever to share information" to stop financial crimes, she said. “In the past banks were not that interested in sharing data. But over the past year, with things like the Swift attack, it’s something they’re much more open to.”
Verafin also offers its community bank customers an information sharing service that can help detect potential financial crime being committed at multiple institutions by the same party.
The goal of such detection is to stop the exploitation of people, of course, but banks that play a role in breaking up a crime ring also get to reinforce their role as good public stewards, Willbrand said.
“I think this issue is especially even more relevant for community banks," he said. "They have a reputation of being involved in the community, and helping to stop human trafficking in their community can really play a part in reinforcing those community ties.”
“I’m just so proud that we can help law enforcement in any way to stop crimes like this from happening in our community,” he said.