When most people think of integrity, they mistakenly assume it is the same as morality. If we say someone is a person of integrity, we usually take that to mean that they are a “good” person. But what integrity actually means is wholeness, in the sense of coherence or stability or consistency of function. When something has no integrity, it disintegrates and just doesn’t work. Physically, this is obvious. If you remove one leg from a chair, it no longer has integrity and it will fall over. If you remove a wire from a circuit, it lacks integrity and will not carry electricity. None of these things are good or bad because they lack integrity; they simply don’t work. Without integrity, things do not perform the function they are designed for, and thus cannot be relied upon. This is as true socially and financially, as it is physically and in business. 


Financial integrity is especially important, simply because money touches every part of an organization. If we think of money like the gas in a car, it isn’t the reason that you drive your car, but it is what makes it possible to do so when you choose to go somewhere. Money, which is really just a symbol of economic value created by conferring the benefit of continued or more enjoyable existence to another party, is needed wherever there is anything significant to be done. 




Financial integrity is as essential as the all-pervasive nature of money. Financial integrity enables the accurate, efficient and predictable flows of money between institutions, countries and societies. The lack of it has much farther reaching consequences than just inefficiency. Financial integrity determines trust and therefore the very survival of the market itself. In the same way, threats to the global financial system and its integrity come from every avenue of opportunity.


And let’s face it, financial integrity is under threat from a world that is becoming more complex and unstable as a result. Systems, technology, and globalization all play a part in this. Risks are not necessarily getting more likely but the scale and interconnectedness of the modern world makes their impacts much more severe. The bottom line is that the maintenance of financial integrity relies on us becoming much more proficient at predicting and managing those risks and their impacts.




Illicit finance and the targeting of financial crime are one of the key threats to financial integrity. Banks, regulators, and enforcement agencies alike are struggling to keep pace with the rapid evolution of illicit finance.  Criminals are notably adept at circumventing financial and sanctions controls, rendering risk and compliance officers at a disadvantage.  Consequently, criminals will continue to amass large profits from illegal businesses as long as insufficient monitoring continues to exist. 


Illicit actors are extremely savvy at adapting to new controls, finding creative ways to sidestep blockages using creative techniques and innovative money-transfer mechanisms, methods such as barter and re-routing transactions through third countries that might serve as a transit point or nexus for activities of concern.




Cyber threats can also cause companies to lose money. The most obvious avenue for this loss is, of course, taking money directly from the company itself, followed by taking money from a company’s customers, which then has to be reimbursed. However, if a customer’s trust is lost or the company’s reputation otherwise damaged, as discussed above, there’s the risk of losing future profit from customers leaving the company.


Cybercriminals have a primary goal of financial gain and, therefore, typically target wealthy businesses and/or businesses with valuable data. However, they are also frequently opportunistic in their attacks and will also target smaller fish in the sea, if they are determined to be sufficiently vulnerable. They can work in isolation or can be part of Organized Crime groups.


The Maersk NotPetya cyber attack in June 2017 is one of the best examples of how Cyber crime can threaten financial integrity. Hackers had previously hijacked access into the update servers of accounting software M.E.Doc. On the afternoon of June 27, 2017, it enabled them to release a piece of Ransomware called NotPetya that effectively spread to every server that carried the M.E.Doc software, including Maersk, effectively crippling their entire IT system within two hours. 


While the aim of a piece of Ransomware may be to extract money from its target, in this case it had the effect of bringing to a halt a maritime giant that was responsible for 76 ports on all sides of the earth and nearly 800 seafaring vessels, including container ships carrying tens of millions of tons of cargo, representing close to a fifth of the entire world’s shipping capacity. The result was more than $10 billion in total damages, according to a White House assessment. But the concept of the effect that could be caused not just on a company of this size but on the financial integrity of a maritime system that the global economy relies on was of an altogether different proportion. 




Operational impacts on companies or economies, caused either by internal or external factors, can have impacts as large and rapid as any cyber attack, to the extent that they threaten the financial integrity of organisations or countries through their sheer scale. The Coronavirus pandemic has brought about some staggering statistics of the unpredicted impacts, of magnitudes that will affect the economies of affected countries for decades to come. 


The UK has been hit hard. In the first three months of 2020, the UK experienced the sharpest economic contraction since the peak of the financial crisis (Q4 2008). The 5.8 per cent single-month fall in March was the biggest on record (since 1997), and with the lockdown coming into full force only in the final week of March, that single-month fall suggests a GDP contraction of around 20 per cent during the lockdown period. 


The scale of the current jobs crisis is just as stark. Over two million new claims for benefits have been made since mid-March, despite the Government Job Retention Scheme. Trade has shown a similar impact. Flight traffic, which has been directly affected by travel restrictions, has fallen sharply: Heathrow’s traffic fell by 97 per cent in April compared with the same month last year; and air cargo volumes are down 62 per cent. 


The World Trade Organisation has estimated that global trade is likely to fall between 13 and 32 per cent – larger than the falls during the financial crisis when world trade fell by 12 per cent from peak to trough. 


Thus, despite numerous  warnings over the last decade and unprecedented government support across the world, global financial integrity has deteriorated drastically and unpredictably. 


While the occurrence of the Coronavirus pandemic could be classed as a once in a lifetime unpredictable event, the level of interconnectedness and globalisation of our modern world means that the essence of maintaining Financial Integrity is dependent on improving our capability to predict the unpredictable.




While world events are unpredictable, the interventions of humans are likewise difficult to predict but can have just as intense consequences on company brands and therefore Financial Integrity. 


Gerald Ratner, CEO of Ratners Jewellers, made such an intervention at the Institute of Directors conference on 23 April 1991.  Although widely regarded as "tacky", Ratners shops and their wares were nevertheless extremely popular with the public, until Ratner said the following:


“We also do cut-glass sherry decanters complete with six glasses on a silver-plated tray that your butler can serve you drinks on, all for £4.95. People say, "How can you sell this for such a low price?", I say, "because it's total crap.”


After the speech, the brand impact of his speech knocked around £500 million off the value of the company, which very nearly resulted in the firm's collapse.


Security breaches can have intense impacts on a company’s brand, reducing customer trust and the credibility of the services provided. These impacts can be compounded significantly if appropriate plans and training are not put in place to ensure damage limitation. TalkTalk’s record (at the time) fine of £400,000 for poor website security which led to the theft of the personal data of nearly 157,000 customers in 2015 was eclipsed by the 9% loss in market share that occurred during the CEO, Dido Harding’s, tenure and her much publicized lack of knowledge or insight into the security status of the company.




Other sectors can learn a lot from the actions already undertaken by the Financial sector which, by definition, is closest to the problem and arguably the furthest ahead. The Financial sector has revolutionized the level of risk planning and preparation that goes into its Know-Your-Customer (KYC), Customer Due Diligence (CDD), Enhanced Due Diligence (EDD) and security processes to reveal a prospective and ongoing account holders’ profile, highlighting who they are, what they do, connections to various businesses, links to questionable activities, and their risk rating at any stage during the relationship. 


They have, in turn, been highly motivated to take action by continual and intense rises in regulatory and compliance regulations and similar in depth actions need to be considered across all other sectors and risk categories. Essentially these actions tend to fall into three categories:


Security Planning -  All organizations are continuously looking to ramp up their digital risk intelligence and investigations capability to better protect themselves from fraud. Security teams are increasingly looking to augment their effort to combat such risks by outsourcing this function to technology firms specializing in conducting proactive cyber-related investigations.  Such firms mine for illicit or questionable content of interest by leveraging non-traditional datasets, including the surface, dark and deep webs, as well as social media, encrypted communication channels, and peer-to-peer networks to conduct enhanced due diligence, provide in-depth investigations into financial fraud, and conduct ongoing monitoring of data to identify cyber exploitation, financial crimes, and the theft as well as leaks of sensitive information.


Automation - AI-based solutions harness insights from multiple sources of data; both structured and unstructured, transaction data, email and the internet, to include both the surface and dark webs; helping to strengthen monitoring and reduce costs, in part by automating many of the more mundane functions traditionally performed by humans. In a best-practice risk management environment, global standards are harmonized; the formatting of data is made uniform; tedious processes are automated so that decision-making is not made in silos; and the ability to detect illicit behavior is accelerated exponentially by leveraging cutting-edge technologies. 


Prediction -  Highly advanced tools require less data and time to “train” the computer, which is accomplished simply by using a technique called “supervised learning,” feeding the machine case data that had previously been categorized as criminal activity. More specifically, the most advanced data science can understand context, style, sarcasm and intent within the data and can make intuitive leaps, much like a person. It can detect sentiment, syntax and dialects, and in today’s modern era of communication, can understand the use of special characters, emojis and sarcasm. All of these attributes help to enable the prediction of not just criminal activity but help to reduce the unknown unknowns.