Journal of Financial Crime

ISSN: 1359-0790

Article publication date: 10 October 2008


Bosworth-Davies, R. (2008), "Editorial", Journal of Financial Crime, Vol. 15 No. 4. https://doi.org/10.1108/jfc.2008.30915daa.001



Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited


Article Type: Editorial From: Journal of Financial Crime, Volume 15, Issue 4

One of the reasons we fail to understand business crime is because we put crime into a category that is separate from normal business. Much crime does not fit into a separate category. It is primarily a business activity (William Chambliss).

As someone who has spent all his adult life dealing with the phenomenon of white collar crime, I never cease to be amazed at just how little willingness is shown by the financial services industry in encouraging strategically-positioned practitioners to gain higher academic qualifications in an understanding and interpretation of the issue.

Financial crime now costs UK plc billions of pounds annually, money which is deducted directly from the bottom line of the balance sheet. All regulated member institutions must now adopt a risk-based approach towards the prevention and interdiction of financial crime, as part of their compliance strategies.

The responsibility for ensuring the successful implementation of this policy lies at senior board level, but when such individuals are questioned as to their domain knowledge of the causes, the practices, the activities, the phenomenology of the problem they are required to prevent, the level of practical expertise is a resounding zero.

Work down the food-chain within the corporation, and try and find anyone who has any understanding of the way in which the criminal mind works, and you will find an almost complete void. Occasionally, you may be lucky and you will discover a former detective or seasoned former police officer in post in some dark corner of a financial institution, but their role and position is rarely a senior one, and they have a very limited input on policy-making decisions.

But why stop with the regulated sector, examine the regulatory agencies. How many experienced former detectives with the knowledge or expertise to be able to understand the criminal mentality are there holding down senior policy-informing roles within the various regulatory agencies? Who in their various financial crime teams has had any experience of really dealing with professional financial criminals. This is not to belittle any of the efforts made by these good people, it merely asks the question, what is the basis of their experience or knowledge which befits them for this role?

I recall meeting a woman at a conference not so long ago who asked me a series of questions on my presentation about criminal trends and criminological tendencies. It turned out that she had been seconded to one of the regulators and was responsible for determining a financial crime policy initiative. When asked what experience she possessed, the answer was that she had absolutely none at all, but she did have a PhD in finance and as her employing bank had no work for her at that time, she had been sent on a sabbatical to the regulatory agency to fill in the time until the market conditions improved. It is instances like this that make the wider white collar crime debate risible, and illustrate just how little anyone, government or industry really care about domain knowledge and expertise in the field of white collar crime.

Perhaps, this goes some way to explain why the volume of financial crime is rising exponentially, and why government is repeatedly demonstrating its powerlessness to deal with the phenomenon.

The point of my concern is that there is frankly no agenda, either within government or within the industry it seeks to regulate, to provide any level of real academic expertise designed to enable the acquirer to truly understand the nature of the criminal mentality and criminogenic behaviour.

Why should this be? Is it that those who administer these environments have merely overlooked the importance of these subjects; or is it more sinister, reflecting a deeply submerged realization, as the quotation at the start of this essay pointed out, that so many of the practices which are commonplace in the financial sector, and which are openly encouraged by those with money to make, are little more than thinly-disguised criminal activities in themselves, and that those who engage in them are indeed nothing more than financial criminals, in nice suits?

All too often I have addressed these issues with practitioners, only to be told, and with apologies to Pink Floyd, “we don’t need no education”. Academic study, so it seems, is not required, merely a minimally-necessary level of training to satisfy the regulators. Universities have serious difficulty in attracting students to study for higher degrees in white-collar criminology or financial crime management. I have approached a major Business School and suggested that as part of their MBA topics which dealt with issues supplementary to business, they should include a series of lectures on financial criminology. The proposal was turned down out of hand.

Yet, the study of white-collar criminology teaches us a significant amount about the human condition, and helps to interpret the attitudes which are so often expressed by practitioners. Education looks at the status quo and asks “Why?” and “How?” and “What If?” and “How does this inform me?” and “What if this were to happen again in other circumstances?” and “How would I react if I saw this conduct but in very different circumstances?” Training gives people a series of possible answers. Education teaches people to ask further questions.

Senior management needs to completely reconsider its attitudes towards providing selected personnel with the academic education necessary to understand the white collar crime phenomenon. Young ambitious graduates, looking to further their careers in business, finance and management, think nothing of signing up for very expensive MBA courses. The MBA has almost become the sine qua non of the level of qualification required for entry to the highest levels of management.

If business provides such recognition of the MBA, then why does it refuse to contemplate the opportunity offered by the provision of the highest level of crime preventative and loss forestalling understanding and expertise offered by a Master’s degree in white-collar criminology. Such degrees do exist, but unless they are recognized for being the sources of inspired business awareness and best practice facilitators which they are, the courses will be closed down, and the costs of fraud and losses to business will continue to follow their exponential growth curve.

Rowan Bosworth-Davies