The FinCrime Files – Q&A with Linda Baskett, Financial Crime Director at Aon UK
In a new series of interviews, we attempt to uncover some of the challenges faced by those on the front line in fighting financial crime. We caught up with Linda Baskett, Financial Crime Director at Aon UK who kindly took some time to tell us about her role, her top three challenges in fighting fincrime for a large insurance firm and what effect some recent regulation changes have had.
Hi Linda, could you tell us a little about yourself and your current role at Aon UK?
I am the UK Financial Crime Director and have oversight of the management of financial crime risks across Aon’s UK entities. I manage a team of 10 colleagues, located across several different locations in the UK, and I absolutely love my job! My team are fantastic – we work hard and we laugh hard.
Everyone is so dedicated and knowledgeable; and brings something immensely valuable to the party. I am so proud of them all – of what they’ve achieved so far and what they will achieve (whether that’s work or personal).
I’d also say Aon is one of the best companies I’ve worked for. There is a strong culture of collaborative working and mutual respect, which makes mine and my team’s job fairly easy. We have a good three lines of defence model, which is well embedded and ensures everyone has a clear understanding of their responsibilities.
Most importantly for me, Aon is exceptionally flexible and agile. Having a team spread across the UK means it’s not overly important where I am, as long as I have an internet connection. I am able to work at home when it works for me to do so. I have also had the absolute pleasure of being able to arrange for one of my team to work from Canada while her son is shooting a movie out there (a reboot of Home Alone (apols for the shameless plug!)).
I am also a working mum, and one who specifically hates mornings. Knowing I am not being clock watched removes so much stress for me. In a previous role, I had an official flexible working arrangement, but it was managed so rigidly it ended up not being flexible at all. When I moved to Aon, I was a little concerned as to how it would all pan out, but I’ve never needed to make a formal arrangement and I am able to achieve a good work/life balance without one.
I previously worked as a Civilian Financial Investigator for the National Crime Squad and developed intelligence packages at the National Criminal Intelligence Service, so my background is predominantly Her Majesty’s Government and actively fighting financial crime.
Whilst at Legal & General, I diversified for a time into data protection and information security. I really enjoyed that and adding another perspective to my view of all things regulatory.
What do you consider to be the top 3 challenges in relation to fighting financial crime for a large insurance brokerage firm?
Proceeds of Crime – I think we’ve recognised that in the GI and Reinsurance space, the risk of money laundering is low. The products have never really lent themselves to being used for laundering money. However, we do need to consider that the assets we cover and the premium we handle may be the proceeds of criminal activity.
Bribery and corruption – Aon is a broker/intermediary firm in GI/Reinsurance. We are also a consultant in the retirement/investment and health space. We are in the business of being the middle man, which brings with it a higher risk of bribery and corruption.
Sanctions – I have now worked for two US listed firms and the current US Administration’s use of sanctions presents challenges in terms of how quickly sanctions are implemented and the reasoning behind them.
As part of the Fifth Anti-Money Laundering Directive which went into effect in January 2020, EU member states are releasing registers of UBOs (Ultimate Beneficial Ownership). What are your thoughts on this, and ultimately, can they be successful in helping financial investigations?
I look at this from two angles. When it was first announced, I was concerned about the balance between data privacy/security and financial crime prevention measures. I still don’t think we have this balance right but only time will confirm or deny my thoughts. In my experience, this balance has come up a few times – specifically around sanctions and Ultimate Beneficial Owners. The question of which regulation trumps the other remains a mystery to me.
The other angle arose from a seminar I attended one evening in November. There I heard a discussion about the completion rate for the UK Persons of Significant Control register held by Companies House. The point he was making was that it wasn’t 100% and he wondered who had not responded? Most likely those who are attempting to hide their ownership. He then went on to suggest that this was an attempt to encourage criminals to self-disclose. He had a valid point.
We all know that criminals hide their money in shell firms and make every attempt to conceal the ultimate ownership of such companies/assets. I’m not sure why we now think that having a list is going to stop this. I am currently exploring that view further with some like-minded professionals who I met at that seminar.
Is there any regulation that specifically affects insurance companies in dealing with financial crime?
No there isn’t. We have slightly different rules for life insurance vs general insurance in the anti-money laundering space. This creates some interesting challenges at times but nothing that we can’t overcome. We do have focused guidance which helps with interpretation of the regulations, of course.
In 2018, I was lucky enough to sit on the Financial Action Task Force panel for drafting the Risk Based Approach for the Life Insurance Sector guidance. This was a great opportunity to shape guidance that people hold in high esteem. It was interesting to have the debate, at a country level, on the perceived risk presented by General Insurance and Reinsurance. But who said what stays with me.
I think the issues we run into in the insurance sector is that the majority of regulations are drafted with higher risk businesses in mind and sometimes it feels like we are trying to put a square peg into a round hole. We recently had an issue where we knew an asset we had arranged insurance for was frozen, but we wanted to exit the relationship for reputational reasons. The question I had was surely it was better for that asset to remain insured as its value needs protecting. I mention this to illustrate that banking and insurance are very different industries with very different risks.
Do you think technology now plays an irreplaceable part in fighting financial crime, and do you think Artificial Intelligence can help investigators locate information that could otherwise be missed by humans?
I think technology has a valid role in helping fight financial crime. I am very much of the opinion that there is little value in tick box compliance alone. Any financial crime program should contain active monitoring in order to spot trends.
You are quite involved in speaking at industry events. Which key influencers/podcasts/books do you recommend to keep up-to-date with the latest developments in AML and financial crime?
There are many sources out there to keep up with latest developments. I don’t tend to have a preferred source but I recently attended an event hosted by the FS Club that I felt to be very powerful and interesting.
I would recommend reading McMafia by Misha Glenny as I like the way it takes a critical view and leaves you questioning our current routine.
For me, I have been looking at leadership material lately, so wanted to recommend ‘First in, last out’ by Ant Middleton. Not the most conventional reading material, but Ant’s messages are really meaningful for those in people management. I’d also recommend seeing Professor Adrian Furnham speak if you are able to. Again, he speaks more around leadership than AML/Financial Crime specifically, but he is insightful and very engaging.