Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeFinanceBankingInformation overload could be gumming things up when it comes to catching financial criminalsCBA is calling on Ottawa to make its anti-money laundering reporting procedure more efficientLast updated 56 minutes ago You can save this article by registering for free here. Or sign-in if you have an account.Bank buildings in Toronto's financial district. Photo by Getty Images/iStockphotoToo much information can make it harder to tackle financial crime, say officials from Canada’s largest banking association, which is calling on Ottawa to make its anti-money laundering reporting procedure more efficient.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorCanadian bankers spend an enormous amount of time submitting suspicious transaction reports (STRs) to FINTRAC, the federal government’s primary financial intelligence unit, with some forms requiring as many as 500 fields of information, making the task laborious, Anthony Ostler, chief executive of the Canadian Bankers Association (CBA), said.Part of the challenge is that there’s a low threshold to submit STRs, he said, so even if a transaction may not necessarily be risky, but still meets FINTRAC’s requirements, bankers still have to fill out the forms.Breaking business news, incisive views, must-reads and market signals. Weekdays by 9 a.m.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Posthaste will soon be in your inbox.We encountered an issue signing you up. Please try again“You could be sending money to your contractor to build a new deck on the back of your house and, unbeknownst to you, that could then generate a suspicious transaction report,” Ostler said. “And then your bank is spending a lot of effort to fill in 500 fields for nothing illegitimate.”In Australia, which has a similar banking regime, forms start with 50 fields of information, he said. Australian banks can then be asked to submit more information if needed.“What they are trying to do is focus on what is truly suspicious and not just stuff that’s arbitrarily captured, and that’s an example of efficiency and effectiveness,” he said.Ostler said a similar system in Canada could mean less time spent on paperwork by bankers and more time focusing on identifying patterns used by money launderers and other criminals.Canada’s anti-money laundering processes have been in the spotlight ever since Toronto-Dominion Bank was fined more than US$3 billion in the United States for failing to monitor money laundering activities through its branches south of the border.The country is also awaiting the results of the global Financial Action Task Force’s review of how effective Canada has been in combatting money laundering and terrorist financing. In addition, FINTRAC recently appointed a new head after Sarah Paquet finished her term in May.“This is a moment of transition,” Alana Scotchmer, a lawyer at Gowling WLG who deals with financial entities, said. “There’s a real opportunity here to modernize the Canadian framework. We don’t want to see the old, rule-based reporting framework. It really makes sense to focus on the quality of the information over the volume of information.”FINTRAC said the current system of suspicious transaction reporting is critical to the financial intelligence it generates to support law enforcement and national security investigations.“By structuring reporting requirements on transactions, suspicious transaction reports expressly enable FINTRAC to ‘follow the money’ by establishing financial connections between persons and entities and provide critical leads for law enforcement,” spokesperson Darren Gibs said.He also said the reports sent to FINTRAC helped it produce 7,214 financial intelligence disclosure packages, based on 3,007 unique disclosures last year, which is the largest number of disclosures it has generated in a single year. These disclosures helped fight financial crime and combat activities such as human trafficking, child exploitation and fraud.But Garry Clement, chief executive of Clement Advisory Group, an investigative agency, and a former national director of the Royal Canadian Mounted Police’s Proceeds of Crime Program, said FINTRAC’s success rate isn’t good enough when you compare it to the number of reports being sent to it.“If you were running it as a company, it would have gone bankrupt years ago,” he said.Clement, who has more than 40 years of experience decoding financial crime, said the current system is focused more on compliance or rules, which means that if the financial entities fail to report a suspicious transaction or don’t fill out the forms properly, they will be penalized.This has led to defensive filings, he said, where banks file a report based on basic information to ensure they don’t get fined by FINTRAC in the future.“What we need is a system whereby what is being fed in is accurate, actionable and serves more than just reporting a red flag. The red flags have become far too general,” he said. “If banks weren’t occupied with having to fill out an extensive report, they could spend more time on ensuring what they submit is actually robust and of intelligence value.”FINTRAC’s penalties can range from tens of thousands of dollars to millions. While it may be easier for Canada’s biggest banks to pay them, Scotchmer said it’s not so easy for smaller financial organizations.She also said a lot of the penalties are imposed because institutions may have incorrectly filled in one of the thousands or even millions of data points on the reporting form, which seems punitive because they have done their best to comply.“It’s kind of a ‘gotcha style’ of penalty that’s been happening,” she said.At the same time, Scotchmer said it’s not possible for an outsider to accurately predict which pieces of information may be useful for FINTRAC.Both Clement and Ostler said FINTRAC has been doing a good job, but there’s room for improvement.“Don’t get me wrong, FINTRAC is doing a great job and has contributed a hell of a lot to some of the recent arrests and prosecutions,” Clement said. “But we have to be smarter, think smarter and work smarter.” Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.