Aussie big four banks get added data heft to combat child exploitation

ICMEC RedCompass CSE prevention financial crimes

Financial crimes intelligence and payments technology developer, RedCompass Labs, which provides crucial financial intelligence to major global banks to aid in the prevention of child exploitation and abuse, has announced it will use funds from a recent International Centre for Missing and Exploited Children (ICMEC) Australia grant to help fast-track development of its Australian FSI-ready data platform.

RedCompass was among the first to receive grant funding from ICMEC Australia as part of its Child Protection Fund (CPF) scheme. ICMEC Australia has opted not to publicly disclose the value of the grant.

The UK-based RedCompass, which specialises in the use of data analytics to disrupt financial crime, will invest the ICMEC Australia funds to help scale its pilot platform, RedFlag Accelerator CSE Portal, localised specifically for Australian FSIs.

The portal will provide crucial data to help banks, including the Aussie big four, and other financial services businesses identify perpetrators and prevent funding associated with child sexual exploitation (CSE), delivering, RedCompass said, “cutting-edge risk management insights relating to CSE”.

“Developing these localised insights and logic enhances the ability for financial institutions to detect crimes against children,” RedCompass said.

ICMEC Australia, which serves as an intermediary between RedCompass and Australian FSIs, added that it is the “first time that Australian-specific data and typologies will be provided to Australian banks via the RedFlag Accelerator CSE Portal”.

National Australia Bank (NAB), one of three Australian big four banks that work closely with ICMEC Australia, said it already makes ready use of the NGO’s data to both identify potential criminals (who are then referred to law enforcement), as well as to directly prevent and stop payments for child exploitation material.

Speaking to FST Media, Paul Jevtovic, a former AUSTRAC chief executive who now leads NAB’s financial crimes investigations unit, stressed that the work of RedCompass will enable NAB “to be across typologies that are relevant to Australia in a timelier manner”, leveraging the bank’s existing strengths in real-time analytics, machine learning and data science with more usable and ingestible CSE intelligence datasets.

“Insights and new methodologies generated from [RedCompass] research will be updated on the portal for immediate access to NAB,” Jevtovic said.

“The portal will allow for the data to be extracted in a format that is ready to be used immediately – for example, no time will need to be spent to structure the data for ingestion into detection systems as it will be structured in a way that is compatible for our systems.”

“This will provide efficiencies and will allow exploitation red flags to be addressed quickly, ensuring banks like NAB can better protect vulnerable children.”

Jevtovic added: “NAB is investing in new technology and systems and in more colleagues in the financial crime team to help fight exploitation.

“Protecting children and the community is a priority for us. As the financial crime environment evolves, we will continue to adapt to the changes in typologies displayed by offenders and will remain proactive and invest to continue to protect vulnerable members of the community.”

ICMEC Australia first introduced the work of RedCompass Labs to Australian financial institutions’ crime investigations units in 2022.

“We received a lot of interest from our financial institution partners in the type of data that RedCompass Labs gathers and analyses,” said ICMEC Australia chief executive Anna Bowden.

“This encouraged RedCompass Labs to apply for our funding to be able to provide Australian-specific data and typologies for the first time to our financial institutions via an online portal.”

Jonathan Bell, partner and president of RedCompass Labs welcomed the funding boost and partnership with ICMEC Australia as “an incredible boost to our mission to disrupt child sexual exploitation”.

“We look forward to leveraging our deep payments and data science expertise and working alongside ICMEC Australia and Australian banks to protect children from exploitation.”

Reports of child exploitation made to Australian law enforcement authorities have grown markedly in recent years. According to the Australian Federal Police (AFP), in the 2021-22 financial year, its Australian Centre to Counter Child Exploitation recorded 36,600 reports of online child abuse – more than 60 per cent higher than the previous year’s total of 22,600.

In its first year of operation in 2018, the ACCCE received 14,285 reports of child abuse.

Financial crimes tracking agency AUSTRAC notes that payments for child exploitation material are typically small in value, generally under $500 per transaction, and remain difficult to detect.

It adds: “Payments for child sexual exploitation can be difficult to detect because offenders take considered steps to hide their crimes from friends, family, financial institutions and law enforcement. No single financial indicator will reveal if an account is being used for child sexual exploitation purposes.”

“Financial transactions are central to child sexual exploitation because payments enable the offending to take place.

“It is crucial for law enforcement agencies, government agencies and financial institutions to work in partnership to disrupt payments for child sexual exploitation material and stop the abuse of victims.”

ICMEC, a global NGO, works closely with global financial crimes teams, NGOs, corporations, regulators and law enforcement partners worldwide to facilitate collaboration and data solutions that can help to detect, report and prosecute perpetrators, and through this, ultimately prevent harm to child victims.