What Can Banks Do to Stop Human Trafficking Scams? Plenty

It’s arguably one of the world’s biggest tragedies that human trafficking still exists today—impacting an estimated 50 million people globally. But unfortunately, it’s also not that surprising. It’s essential to take a moment to understand how human trafficking scams still thrive in this day and age, as well as the role and responsibilities banks have to help victims and identify traffickers.

Human Trafficking by the Numbers

It’s easy to hear the term “human trafficking” and think of adults or even children forced into the sex trade or domestic servitude. But human trafficking is so much more than that. Everyday people can find themselves ensnared by human trafficking scams, coercion, or even brute force.

According to the latest figures from the International Labour Organization (ILO), an estimated 50 million people are living in modern-day slavery. This figure includes millions of people in forced labor, sexual exploitation, and forced marriages.

These figures are, to put it mildly, alarming. But perhaps even more disturbing is the fact that even with millions of people trafficked worldwide each year, it’s still extremely difficult to identify a trafficked person in a crowd.

Other crimes—such as buying illegal drugs, moving illicit guns, or violent crimes like robberies or burglaries—can be easily recognized. Trafficking, on the other hand, is a crime that can happen right in front of our eyes and go completely undetected. By simply walking down a street, you might not suspect that a construction worker is trapped in financial servitude or that a younger woman getting into a car with an older man is being forced into a life of prostitution.

Increasingly uncertain economic situations make people highly vulnerable to trafficking recruitment tactics. In the face of financial uncertainty, a job loss, or a mountain of debt, some people become desperate enough to respond to shady fake job ads or offers on social media. Others may trust the wrong people in their effort to become famous.

These scenarios have one thing in common: victims are eager to escape their situation. Desperate people make easy prey for human trafficking scams.

The Rise of Pig Butchering

The sad truth is that criminals will always exploit economic uncertainty and use people’s desire for a better life to their advantage. Advances in technology have only made it easier for criminals to reap profits from the buying and selling of human beings.

“Pig butchering” is the latest type of human trafficking scams used to recruit victims. In a pig butchering scam, scammers build trust with their victims before encouraging them to download an investment app that steals all of their savings. The name of the scam is a reference to fattening up a pig before killing it for food.

This trend has been particularly alarming in Southeast Asia, where several pig butchering operations have been uncovered and disrupted. By some estimates, these schemes have impacted as many as 200,000 people.

Authorities in Cambodia recently rescued a group of individuals who had been lured into human trafficking operations by promises of jobs. The victims were forced to work in scam centers where they tricked other people into fake investment or romance scams.

A Rallying Cry for Banks

Banks and FIs can play a significant role in thwarting human trafficking and saving victims by embracing robust anti-money laundering (AML) practices. By acting as financial gatekeepers, FIs can stop the flow of illegal money into the financial system, alert authorities to investigate potential human trafficking crimes and make a positive impact on real people’s lives.

The good news is many banks are already embracing this ethical and moral responsibility. In the United States, organizations like the American Bankers Association (ABA) have launched training resources designed to educate bank staff on identifying red flags and taking action. Here’s what banks and bank personnel can do to take a more proactive approach to stop these atrocities.

Offer to help bank customers

The people who work at banks are already used to acting as stewards responsible for protecting customers’ financial well-being. Therefore, asking about the safety of the people they interact with is a natural extension.

When bank staff encounter someone who seems uncomfortable or distressed, they should ask how they’re doing or if they need help. In other words, demonstrate your investment in people by being vigilant in your work surroundings and offering comfort or assistance to those who need it.

Use visual link analysis to be a champion for humanity

As mentioned earlier, technology has made it easier for criminals to profit from human trafficking. Technologies like remote onboarding and person-to-person transfers make it easier than ever for these bad actors to move money and evade detection.

However, banks can also use technology to uncover patterns linked to money laundering and disrupt traffickers’ networks. Banks need not think of this as a cost function. If your bank’s efforts are only successful in rescuing a few human trafficking victims from others’ control or exploitation, the investment is worth it. Efforts like these will position banks and their people as champions of humankind.

Train bank tellers to be alert for human trafficking

Banks should train their tellers to understand and respond to signs that someone might be in danger or possibly a victim of trafficking. Empowering tellers to identify red flags can help them fulfill their responsibility to look out for customers’ (and people as a whole) best interests.

An older man accompanied by several scared-looking younger women or someone who wants to deposit cash that smells strange could be signs of trouble. Many banks have trained their staff to look for signs of similar crimes (like elder abuse) and offered a trafficking hotline to report them. Several trafficking hotlines allow tellers to make anonymous reports that can be used to open investigations.

Work with law enforcement

Banks should already have open lines of communication with law enforcement both in their local communities and at a state or possibly federal level. If bank staff suspect they witnessed a human trafficking incident, they should consult with their police contacts. Law enforcement frequently partners with non-profit organizations and advocacy groups that support human trafficking victims and provide them with the resources to get out of their current situations and take back control of their lives.

Monitor customers’ transactional geography

Banks can use technology to view a timeline of their customers’ transactions and where they occur. By analyzing these transactions, they can determine if a customer’s behavior is usual or if it raises red flags for human trafficking. For example, suppose a customer who typically only has a few transactions in their city suddenly has a lot of transactions moving across the country. In that case, it may be worth further investigation.

Banks can look deeper into a customer’s spending to spot suspicious activities. Numerous fast food purchases, motel or hostel stays, or purchases for unusual items for the customer (e.g., diapers, baby formula) may be signs that a trafficking ring is at work.

Use cross-referencing to know your customers

Financial institutions can also look into how customers behave compared to how they are expected to behave at onboarding. Does their recent behavior match their expected behavior from their KYC/CDD review? For example, if the customer is a local bakery owner making multiple cross-country trips, that should raise suspicion. The unusual nature of these transactions indicates that something is wrong.

Review databases of known trafficking perpetrators

Anti-money laundering solutions should not only screen for watchlist names but also for human trafficking awareness. There are many databases of human trafficking perpetrators and victims. Bank staff should review these third-party databases for connections between their customers and known human trafficking perpetrators or victims. Third-party providers maintain lists of both traffickers and victims, and bank personnel should be trained to recognize relationships between them.

Upgrade onboarding and ongoing monitoring

Criminals need a legitimate banking system for their illegal money. Banks need to be vigilant to prevent them from onboarding—and to root them out if their risk level suddenly changes. In the first part, banks must collect as much data about the person as possible from a robust set of internal and external data sources. Doing so helps establish how the person is expected to behave and how you expect them to act to look for outlier activity.

In the second part, banks should shift away from periodic reviews and embrace perpetual Know Your Customer (pKYC) instead. Using pKYC, banks can identify when a person’s risk level has changed and immediately investigate instead of waiting months or years. Monitoring how the customer’s behavior has altered over time is a crucial step in using anti-money laundering solutions to stop human trafficking.

It’s essential for banks to make an ongoing effort to combat human trafficking. Not just on a designated day or month but every single day. By connecting their anti-money laundering efforts with the fight against human trafficking, they can make a real difference in raising human trafficking awareness.

• Article: Enhancing AML Transparency with Smarter Data
• Resource: Transforming Compliance: A Step-by-Step Guide to Perpetual KYC
• Solution Sheet: Automated Machine Learning (AutoML)
• Solution: AML Transaction Monitoring