How financial institutions can prevent human trafficking with STOP THE TRAFFIK
Modern slavery is a complex and largely hidden crime, making it difficult to track and predict. There are a number of ways in which financial institutions specifically might be exposed to this crime with some areas more vulnerable than others.
Exploitation and modern slavery can exist in all stages of a company’s supply chain and like all organisations financial institutions must maintain supply chains to remain operational. At least 24.9 million people are thought to be in trapped in forced labour worldwide. Of them, 16 million are exploited in the private sector, linked to the supply chains of the international businesses supplying our goods and services.
A financial institution is also likely to come into contact with modern slavery through their customer base – beit victims or perpetrators using their services. This risk largely impacts retail banks with use of ATMs, assest based lending programmes and opening of new accounts being particular areas of risk. This is why knowing how to spot the signs of modern slavery is a vital form of resilience.
Finally, Portfolio companies are exposed to modern slavery risks, and there are some essential steps which can be taken to mitigate that risk. Modern slavery mitigation should be a key feature in a responsible investment strategy – the issue falling within the ‘social’ element of ESG standards. There are many examples of companies who have had poor working practices and exploitation, with investors previously funding them.
As scrutiny on financial institutions increases, the need for anti-trafficking service provisions will increase. Our financial consultancy services offer targeted solutions to improve current mitigation methods in place to ensure best practice including: improved AML screening, best pactice FSQS system implementation, red flag typology handbooks, bespoke training for specific teams and KYC monitoring guidance.