Podcast S5E6 | The Lucky Laundry: Nathan Lynch

Podcast S5E6 | The Lucky Laundry: Nathan Lynch

Podcast S5E6 | The Lucky Laundry: Nathan Lynch 1920 1080 Risky Women

We have The Lucky Laundry books to give away! Send us your published podcast rating/review by Oct 20 for a chance to win! info@riskywomen.org

Kimberley Cole talks with our first Risky Man Nathan Lynch, a regulatory intelligence professional and author of The Lucky Laundry. They discuss the real world outcomes of financial crime, the status of Australia and how compliance and risk professionals are critically important to prevention.

Nathan Lynch is an experienced public speaker, writer, manager and start-up enthusiast. He specialises in the fields of Financial Crime Intelligence, Anti-Money Laundering, Counter-Terrorism Financing and Regulatory Risk. He is the author of “The Lucky Laundry: How the Aussie Economy Got Hooked on the World’s Dirtiest Cash”, published by HarperCollins in June 2022. As Asia-Pacific Manager of Regulatory Intelligence at Thomson Reuters, he takes a leadership role in identifying emerging threats, typologies, solutions and commercial opportunities in the Financial Crime & Risk field.

Show Notes

01:41 Career Journey
12:04 The Lucky Laundry Book
16:56 Australia Situation & AUSTRAC
29:06 Role & Skills for AML Pros
36:05 Rants & Revelations
41:55 Recommendations

This is not about white collar crime, this money and the lifeblood of crime, it’s not abstract, it’s real.

The risk and compliance team, they are the conscience of the organization, no doubt about it.

Thomson Reuters

Thomson Reuters is one of the world’s most trusted providers of answers, helping professionals make confident decisions and run better businesses.


Kimberley Cole 0:01
This is Risky Women Radio, a show that connects, celebrates and champions women in risk regulation and compliance. We’re here to share the insights on the biggest issues in our industry and hear inspiring journeys from our global members. Sign up to our newsletter at riskywomen.org. I’m Kimberley Cole, your Chief Risky Woman.

Kimberley Cole 0:25
Welcome to Risky Women Radio. Today’s risky woman is actually not a woman. We are joined by our first male on the risky woman radio, Nathan Lynch. And we’re going to talk about The Lucky Laundry. So Nathan is an experienced public speaker, writer, manager and startup enthusiast. He specializes in the fields of financial crime, intelligence, anti money laundering and counterterrorism financing, along with regulatory risk. He’s the author of The Lucky Laundry: How the Aussie Economy Got Hooked on the World’s Dirtiest Cash. It’s published just recently in June 2022. By HarperCollins. And beyond all of that, now, he can add that he is the first man to appear on Risky Women Radio. So welcome, Nathan.

Nathan Lynch 1:15
Thank you so much, Kimberley. Well, I can put that right at the top of my LinkedIn profile.

Kimberley Cole 1:21

Nathan Lynch 1:23
Officially identifying as a risky woman for the next hour. It’s so good to be here.

Kimberley Cole 1:27
Excellent. So you and I obviously work together at Thomson Reuters, I think had great conversations comparing podcasting notes because you have your own podcast. And so I’m absolutely thrilled to have this chat with you today.

Nathan Lynch 1:41
Likewise, it’s a real honor to be here. And I do remember early, early in the days of the risky women podcast, when you are getting started, it’s unbelievable how you’ve built it into the preeminent platform for women in the risk profession. It’s so exciting. It’s so so good to see what you’ve done.

Kimberley Cole 1:59
Well, you are very, very kind. And I want to talk about the book. But I also want to bring in your career, because we have a lot of emerging women and men in risk regulation and compliance, who love to hear the career journeys of our guests. And I think, actually how your sort of perspective and the career that you’ve had is a really interesting one in the Risk and Compliance space. So tell us how did you become an expert in financial crime? And the focus that you have today?

Nathan Lynch 2:30
Yeah, that’s a really good question. So I guess it all began in the early 2000s, when I was writing about money laundering and investigating financial crime, way back two decades ago now. And that was as part of a business called CompliNet, which was sort of, I think it was one of the first or certainly one of the very early regtech companies before we had the name regtech. And I was working for them as a writer and an editor and a financial crime investigator looking at typologies in AML, CTF risk. And back then there was an AML guru, anti money laundering guru in the UK called Chris Hamblin. And he edited the CompliNet platform, the money laundering platform, at least. And so there was an array of financial regulation products, you know, looking at prudential and risk and conduct risk and all the rest of it. And then there was the money laundering publication, and I just got completely hooked on it. So the whole ecosystem of finance, the world of financial crime was just instantly captivating. And I sort of just kept learning and writing and meeting fascinating people. And you know, what this industry is like, one thing leads to another. So fast forward two decades, and I’m still learning Kimberley, I’m still every week, I’m meeting new, incredible people. And you know, the criminal threat is forever evolving. It’s, it’s mercurial and it’s creative, and it’s adaptive. And that’s kind of part of the fun, I think, is that you never really fully understand the way that the threat that people in the AML CTF sector are trying to combat, you never really fully understand it, you can just sort of try to visualize it and better understand it, but it’s an endless road of discovery. So that was sort of how I got started in that space. I just really got hooked on the topic, like so many people in our sector. And then, you know, had the opportunity in 2007, along with a wonderful man called Nick Roberts, who was one of the founders of CompliNet, and another awesome colleague called Martin money to set up CompliNet in Australia. So the three of us sort of got together in a serviced office and hit the ground running and basically just built this business in Sydney. And we were focusing on regulation, tracking and information and training. But then the business sort of expanded into a KYC data base, a transaction monitoring platform and enhanced due diligence. And then that was acquired in 2010, by Thomson Reuters. And that was when we met Kimberley.

Kimberley Cole 5:10

Nathan Lynch 5:11
David Craig came along, and complement was the first acquisition that he made. And so that was the global operations, including the Australian business. And so we came in, and then he acquired World-Check, bolted together. And at that point, we had the phenomenal Thomson Reuters Risk business, which ultimately went on to become Refinitiv, and move to the London Stock Exchange Group. So it’s been a incredible journey, and have just been so fortunate to have met so many amazing people and worked alongside such incredible characters and professionals, yourself, you know, being right up there at the top of the list. So, Thomson Reuters is a pretty special company, and it’s got this great corporate culture that tends to attract really good people.

Kimberley Cole 5:57
Very true. And so your role today, then you’re still obviously writing, and you’ve written a book, but you also do a whole range of other things such as sharing best practice across other institutions and countries. Tell me a bit more about that as well.

Nathan Lynch 6:14
Yeah, so one of the greatest and most satisfying things that I’ve had the opportunity to do in this space, is sort of get into the capacity building realm. And so that’s through organizations like the Financial Services Volunteer Corps, which goes out to developing countries, and tries to upskill them quite often before Financial Action Task Force mutual evaluation, to try and improve the robustness of their systems. So that A, they will get a better mark in their Financial Action Task Force evaluation, which is really important, particularly in developing countries, because as we’ve seen with Pakistan, the impact of getting gray listed is catastrophic. You know, it’s a 40 or $50 billion impact on the economy. And that harms the most vulnerable people in the community really, it hurts them the most. So that sort of aspect of the job, which is participating in these capacity building workshops, sometimes remotely, sometimes on site, and also just helping organizations upskill and improve, because I think one of the most satisfying and incredible things you can do is the training and education and partnerships side, you know, whether you’re dissipating and learning or helping to deliver training, and that’s the big power that we have in this sector is, you know, there’s this enormous workforce of people that are working in financial crime, compliance and risk roles. And as we upskill the ecosystem, the effect of that going forward, as the system gets hardened, and better intelligence is being fed through to financial intelligence units like AUSTRAC, or the MAS in Singapore, the Monetary Authority or in Hong Kong, you know, the value of that financial intelligence is so incredible, that by building our community, which you’re doing with Risky Women, we’re really hardening the entire system. And that’s something that, you know, it’s hard to quantify the benefit of it, but we know it’s there. And we see it. And when we speak to law enforcement types that use the data that’s coming from agencies like AUSTRAC, we know that they’re benefiting from this amazing financial crime and risk community. So you know, that’s probably part of working in this space that I think is fantastic. And anyone who has the opportunity to do that stuff in their role I just highly advocate jump on it, go and do it.

Kimberley Cole 8:39
I think it’s really good to sort of piece together that ecosystem, as you say. And I think this is an interesting area that people don’t often actually think about as an option. You know, if you have been a Chief Compliance Officer or in the compliance space, there’s also this opportunity to use your knowledge in different ways. So I think it’s great to bring out what would you say is the biggest risk that you’ve taken in your career,

Nathan Lynch 9:04
Probably being part of a tech startup, like really, when you go and join a tech startup, you know, you’re taking a career risk. When you do that, there’s an opportunity risk there, because most startups are going to fail. That’s the reality of it. That’s the numbers, maybe 10% of them succeed. So when you go out and join a startup, you are taking a career risk, it’d be safer to go and join a large organization. But it is the most phenomenal thing to be part of a small nimble organization that sees opportunities and can jump on them. And also, the other thing about being in a startup, particularly people early in their career, which I would just advocate go for it is that you get to put on so many different hats. You know, like in a small startup, you don’t have big marketing teams and things like that. You’ve just got to get out there and do it. And everyone’s got to chip in and your role is so diverse in a small and nimble organization. So I think in terms of, you know, that’s a different type of risk, but it is a risk because you’re taking a career risk, and you’re kind of hoping that it’s going to pay off. And you might get lucky, you might not, it doesn’t really matter, you can’t control that outcome. I’m sure you’d agree in a startup, you’ve just got to put everything into it. And there’s so many factors beyond your control that determine whether it succeeds or not, there is no failure in a startup, it’s always experience, and it’s always amazing, amazing fun. And then I guess on the other side of risk, there’s the physical risk, which perhaps there’s an element of that when you’re going and doing capacity building work in some of the overseas jurisdictions like Jordan or Pakistan, where there’s the violent extremism threat. Certainly, there’s journalists who have gone missing in that part of the world. And that’s, maybe there’s a risk there. But I don’t ever focus on that I think the rewards of it’s like what we do in our daily work, you assess the risk and mitigate it, and then you go and to the best of your ability. So that’s probably the other side of it. And the people in the book that I’ve just written, are taking incredible risks in terms of undercover work and things like that. And so you see what people will do on the law enforcement side for the common good. And it makes any risk that you take in our careers, I think, so modest as to be laughable.

Kimberley Cole 11:25
This episode is brought to you by Thomson Reuters. Thomson Reuters is one of the world’s most trusted providers of answers, helping professionals make confident decisions and run better businesses.

Kimberley Cole 11:38
Yeah, so let’s talk about the book. So the book, as I said, it’s called The Lucky Laundry. I know, it’s also available as an audio version, which I am going to continue to listen to, because I love podcasts. And I love listening to things while I’m hiking. But I haven’t had the chance to read it all yet. So can you give us a quick synopsis of, you know, get us interested in everyone picking up the book?

Nathan Lynch 12:04
Sure, sure. So yeah, there is a written version and an audio version. And it’s interesting how many people now tell me that they love listening to audiobooks, I think the podcasting revolution has really changed things and everyone’s multitasking and things like that. So rather than having downtime while you’re exercising, or commuting, these audio books are really popular now. So you know, there’s two versions of it print and audio. But effectively, it’s the story, you’re just diving headlong into this hidden world. So it’s not written for an anti money laundering practitioner. It’s written for someone in an airport, or John citizen or Jane citizen that pick up a book and go, Wow, what’s happening in this world of dirty money. I want to look through a porthole into there. So it starts with a murder that took place on the streets of suburban Sydney, always good to start a book with an unsolved homicide. And it’s all nonfiction. So it’s all things that truly happened and are happening. And you’ve got a body there of a bag man who was part of a money laundering syndicate, and was murdered on the streets of Sydney and you know, forgotten effectively. It’s an unsolved murder to this day. So what I’m trying to do there is get people in from the outset, and say, This is not about white collar crime, this money and the lifeblood of crime, it’s not abstract, it’s real. You know, there’s real things happening. And when financial crime takes place, or governments get corrupted, or whatever it might be, there’s very real world consequences to that. So straightaway, I’m trying to say to people, this is not an abstraction. This is the real world of crime. And then we sort of do a bit of a part travelogue, because when I wrote it, the whole world was locked down. And I thought the world needed a travel story. So we go out to it’s telling the story of how Australia got hooked on the world’s dirty money. But to tell that story, you have to go out to all of these interesting places, you have to go to London, you have to go to Jordan in the Middle East, you have to go to the UAE, Pakistan, Indonesia, Malaysia, Singapore, to really understand how this Hydra of dirty money has wrapped its tentacles around the world and suffocated to some extent, some of these democracies like Australia, and it’s compromised them. So you know, it’s a bit of a travel story, which is the really fun part, and you get to go and meet some of the incredible characters in our world. And then you know, there’s some AML in there, but I try to keep it pretty light so that an average reader can understand it. And we meet some undercover agents, we make some underworld figures. But effectively, what I’m trying to do with it is just tell human stories. So these are the human stories of the world of dirty money. And I pick a handful of characters that represent different scenarios or even different institutions and we explore the world of black money from their perspective and see how people’s lives turn out depending on their decisions they make.

Kimberley Cole 15:07
Fantastic. And I know some of those characters are absolutely fascinating people. So obviously, we’ve got a fair few practitioners that listen to this podcast. But just recap for a second, what’s the size of the problem that we’re talking about here?

Nathan Lynch 15:22
Yeah, so it’s, the standard definition is that the criminal economy is about 2 to 5% of global GDP. And that varies by country, depending on a whole range of factors, but two to 5% of global GDP, global GDP now at 84 trillion, that’s something like somewhere between $1.7 trillion and 4.2 trillion. And so we round that down conservatively and say, look, it’s a $2 trillion a year problem. Now, that’s big money. If you draw all of those zeros, there’s a lot of them. And then on top of that, that criminal economy, of course, when it’s laundered and relegitimized, and reinvested it becomes, you know, really, really effective laundering syndicates and criminal groups don’t just want to wash money, they want to reinvest it and get a return on it. So this is $2 trillion a year that’s compounding. You know, it’s being reinvested as add compound interest to that, you start to get this huge nefarious economy that really starts to erode the pillars of society when you’re talking about that level of money. So yeah, it’s a big problem. It’s a very big problem.

Kimberley Cole 16:35
And give us the dashboard or the sort of landscape of Australia, which is obviously the focus of the book. And I know you talk about the problem, but you also talk about some of the sort of more positive sides and how well AUSTRAC for example, operates. So give us that sort of landscape, but then that focus on what else do we need to do?

Nathan Lynch 16:56
Yeah, that’s a really interesting question. Because the the reality in our world of publishing and news and information, negativity is a news value. You know, a negative story gets the front page of the paper, very hard to sell positive news. But look, a lot of crime books in telling these stories about criminals, they end up glorifying scumbags. You know, that’s the truth of it, whether it’s a murderer or a gangster, in telling their stories, they can intentionally or inadvertently highlight the wrong people. So we had a really amazing story here about a part of Australian history where this agency AUSTRAC came of age. And we’d had a range of financial disasters in Australia, where ASIC, unfortunately, had really failed to properly use its enforcement powers, and bring the industry back into the bounds of what most Australians believe is fair conduct. And so there was just this sequence of failures that led up to cause for a Royal Commission and it was getting pushed back pushed back. I think the government voted it down 26 or 27 times. And then this almost unheard of agency AUSTRAC. At the time, it had 300 staff.

Kimberley Cole 18:13
Yeah, so pretty small, isn’t it?

Nathan Lynch 18:17
Relative to you know, your RBAs and your APRAs, your ASICs, you know, collectively. And this agency just came out swinging and everyone suddenly realized, Oh, my goodness, this agency has inadvertently accidentally been given these incredible, incredible powers of enforcement. Because when the Parliament passed the AML CTF act in 2006, I’m convinced that they didn’t know that when a bank breached the law, it could do it like 21 million times very quickly, because providing a designated service without a compliant AML program is a $21 million offense. And if you think of how many services a bank provides every day, you get these astronomically big numbers. I mean, in the Westpac case, I did the calculations and found that the maximum penalty for the Westpac case could have been 200 years of Australian GDP. We could have literally renationalized Westpac off the back of and CBA as well to be fair Commonwealth Bank as well. So, you know, you suddenly had this agency that was just massively empowered. It had really strong leadership, it had a vision. It was stacked with people that were from the law enforcement community. So they were very different to your traditional regulators. And they were seeing in their previous roles and current roles, they were seeing the harm that happens when meth syndicates can wash billions of dollars, one of the most destructive drugs ever made and inflicted upon humanity, flooding the streets of Australia, and the money is wooshing out the back door being laundered through the global laundromat so easily through the intelligent deposit machine network, the $22 a pop. So huge vulnerability and the people in those organizations just couldn’t sit back and let that happen. So that was the story. They took on the biggest targets in Australia, the untouchables, the two biggest banks, the two most powerful, influential organizations and got enforcement outcomes. But critically, in doing so they settled these cases, and they got cultural change. And then they all agreed, okay, let’s get back on track and focus on what we’re going to do here, which is work together to secure the financial ecosystem against crime.

Nathan Lynch 20:21
And what was going on in those organizations? Because you mentioned that we secured sort of cultural change. But what was the problem in those organizations that caused this sort of just turning a blind eye to this problem?

Nathan Lynch 20:53
Well, it’s probably you know, the nature of it is that in too many cases, there’s an investment in financial crime prevention, or any form of compliance, really. And then an organization goes, Okay, we’ve done that, we’ve done our bit. Now, let’s get back to the business of making money any way we can, hitting targets, getting bonuses, having happy shareholders, and that was the case here. So there was, you know, I tell a bunch of stories where the financial crime teams were doing excellent work, things were getting reported staff in banks were saying I’ve just seen someone walk in and sit out the front at the intelligent deposit machine and shovel money into it. And then I checked his ID on the system, and he had a Caucasian name, and I’m looking at him, and he’s an Asian person. And just things like there’s like, you know, classic internal reports that were not being escalated, not being reported as suspicious matters to the regulator, but also just that issue of management that when issues came to light, they weren’t taking them seriously enough, they weren’t resolving them. Because there was a complacency about, you know, the regulators can’t touch us, we’re too big. So that was the big change. And now you’ve got financial crime risk going from a nothing five years ago, on the Australian corporate landscape register of board concerns to now probably the top non financial risk to Australian companies that are reporting entities under the money laundering regime. So you know, big, big change there. And for AUSTRAC, by going after being targets, it sort of trickles down through the whole community. So they don’t need to do a whole heap of enforcement cases, they don’t particularly enjoy doing enforcement. They’re fundamentally an intelligence organization, financial intelligence organization that has a regulatory role. And that’s a pretty rare model, because in a lot of parts of the world, the FIU function, and the regulatory function sit separately, but you know, their DNA is that they are part of the intelligence community, they work closely with the tax office and AFP and ASIO, on terrorism matters, things like that. So they want to be collecting and feeding intel really good quality intel to other government departments where their clients, they don’t want to be doing messy, long term litigation. And so I think the message from those cases has to ricochet through the whole community and get a result beyond the targets of litigation. And I think it’s safe to say that has absolutely worked.

Kimberley Cole 23:30
Excellent. But what else do we need to do? Because obviously, there’s still, there’s still problems?

Nathan Lynch 23:36
Yeah, we need a second tranche of the AML act desperately. I mean, Australia’s big problem, which I explore in the book is that we’ve got this world class regulator in FIU. We’ve got really strong regulatory powers and influence among 14,000 reporting entities that run banking, casinos and bullion. But then there’s another 100,000 companies that are in the tranche two sectors, the lawyers, accountants, real estate agents, high value goods dealers, that are completely outside the regime. And unfortunately, of course, we know the nature of the criminal threat. That’s where the dirty money is going at the moment. So yeah, there’s a big bit of work to do, but it’s work that politicians need to do, and that’s why the Australian public needs to put pressure on them to make sure that they follow through on their 16 year old commitment Kimberley.

Kimberley Cole 24:27
Yes, I know, staggering isn’t it?

Nathan Lynch 24:30
Really staggering!

Kimberley Cole 24:33
So what are the influences sort of globally do you think have sort of helped change the global landscape because I know you talk a bit about like New Zealand implemented tranche two quickly, effectively, efficiently, but also things like the Panama Papers, like what other kind of things have really impacted and changed the way we think about financial crime, money laundering and made real change?

Nathan Lynch 24:57
Well, yeah, good point. I mean, the Panama Papers is a critical one, because Panama Papers exposed the abuse of New Zealand’s foreign trusts. And then we saw, they acted really quickly and not only passed their first tranche or phase, but also their second and then overtook Australia, within the space of, you know, three or four years. So we saw that they had a massive impact. Now, Australia has just come up in the Pandora Papers, the involvement of trust and company service providers and what they’re doing in terms of structuring. So that’s been drawn to international attention. So hopefully, these kinds of leaks will really trigger the government to take action because there’s a, there’s a naivety in Australian political circles to think that you can just ignore this and there won’t be consequences. Because, you know, we’re a G 20 country, and we’re a member of the OECD and the Financial Action Task Force will never go after an OECD country, well they will and they do. So the big challenge for Australia is that when the Financial Action Task Force comes back in 2024 25, if we haven’t fixed up these issues around the NFBPs, if the FATF were to not do anything, then it would bring the entire system the anti money laundering standard setting system into disrepute. So, Australia really does have this last little window of opportunity. It’s like Indiana Jones in Temple of Doom, you know, getting the whip and his hat out quickly. That’s where we are at this point in time.

Kimberley Cole 26:37
Good analogy. So we’ve got a pretty broad audience of listeners. And as I said, like a lot of them looking at the career journeys of people. So what things can they gain from the book? And I know you cover a lot of different roles in the industry, from undercover agents, etc. What would they pick up and talking about that ecosystem? I’d be interested in your views of all the players?

Nathan Lynch 27:00
Yeah, well, I mean, it’s a huge ecosystem. And sometimes in the the vast majority of the jobs that we see are in the banks, particularly around financial crime compliance roles. But there is this just hugely broad ecosystem out there. I mean, there’s the regulator’s there’s the undercover agents that go inside these organizations and launder money for them and feed the criminal intelligence back. There’s bounty hunters who are out there acting on behalf of nation states, in some cases. You know, I tell the story of bounty hunters representing the Chinese Ministry of Public Security, that are doing civil asset recoveries in Australia and roaming the streets trying to get Ponzi scheme operators and crap politicians back or at least get their resources back to the mainland. So you know, there’s all of this stuff happening in the underworld, then, of course, there’s the bad guys, the network’s the cuckoo smurfs, people that run these schemes. It’s a wonderfully rich ecosystem of different characters and people that play different roles. But ultimately, I think what you want it to be is just a rollicking yarn, because it is such a interesting sector. And I think sometimes we can get so caught up on the technical aspects of risk programs and things like that, that we can lose sight of just what a fascinating world it is. And also, what a great story people have to tell, you know, when someone says, What do you do for your job? Well, you can lend them a copy of the book and say, I do this because it’s an interesting world. And when people ask me about the sector, they’re usually fascinated to hear some of the stories. So I think that’s another part of it is that inspire people to want to be part of this industry? Because it’s an awesome industry, and it leaves the world a better place, I think, when good people work in this sector.

Kimberley Cole 28:51
Yeah, I was gonna talk about that, actually. Because you obviously speak to a lot of different compliance professionals, as you said, across the ecosystem. So what do you think is the importance of the role of Compliance and Risk professionals and the impact that they’re making?

Nathan Lynch 29:06
It’s huge. They are the gatekeepers of good conduct in our major institutions. And we’re now living in a world where we have these huge multinational companies. In many cases, they’ve taken up roles that used to be in the remit of government. So you’ve now got private sector companies doing things that used to be done by a government and there was a whole lot of accountability when they were done by government, because you had public sector oversight. So now that we have big corporations doing really important things, it’s so important that they’re good corporate citizens, that they’re well operated that they operate within the bounds and expectations that society sets. And so in a way, you know, the people in the risk and compliance function, they’re the conscience of the organization. You would hope that the conscience of the organization is every employee, but sometimes staff don’t feel equipped or supported to speak up. So it’s your people that are running the whistleblower hotline, it’s your risk and compliance people that really have that role. But also they can put subtle, persuasive pressure on management to support what they’re doing, you know, like telling them about big enforcement cases, like the ones I cover in the book that have led to the destruction of careers at board and senior management level, that tends to focus the mind. So that’s one of the key reasons why enforcement cases are critical, because it allows AML people to change the culture in their organization. So that’s sort of, that’s one of the key roles that I think the profession has. And they are running very complex, very difficult organizations and 99% of cases trying to do it really well. And it’s a tough job. And you only hear about what they’re doing when they fail in most cases, particularly around AML CTF, you know, you file a suspicious matter report, under the pain of prison, you can never mention, it’s a criminal offense, obviously, with tipping off to mention what your organization has done. So so often, it happens in secrecy. But there is so much good work being done out there. And we see that through groups like the Fintel Alliance that are kicking amazing goals. So you know, the risk and compliance team, they are the conscience of the organization, no doubt about it.

Kimberley Cole 31:28
And when you think about what’s the perfect financial crime sort of specialists or the perfect compliance leaders or members, what are those top skills that you think that people need?

Nathan Lynch 31:41
Yeah, well, determination, I think is really important. The people that work in these organizations, and then you get to meet them, and they might be very softly spoken and unassuming. And then you actually get to, you know, I’m thinking of many in my head at the moment, I won’t name names, but you then get to know them and they’re incredibly determined, which is such an important quality in this space, intelligent, professional and determined is a wicked skill set to bring to the game. But on top of that, I think curiosity is really important, because it is a fascinating space. And if you stop being curious, then you stop being at the cutting edge of the threats. And also, if you’re not curious, you’re not doing your best by the organization, because your job is to be a little bit as well as being the organization’s conscience, you need to be a little bit of the organization’s oracle, in saying this is a risk coming down the line, we need to mitigate it and manage it. So curiosity is really important, and it keeps you interested in the job as well. The other one is communication and persuasive ability, so that you can get people in the organization to buy in, and you can also get senior management to support. And then I think the perfect skill set would involve integrity and courage. And I mean, integrity is, I don’t think many people come into this space if they don’t have integrity and courage, because quite often, we look at these cases where organizations have gone down a wrong path, and ended up in enforcement crosshairs. And there were voices in the wilderness, voices in the risk and compliance team that were saying, we’re doing the wrong thing. We’re doing the wrong thing, we’re on the wrong track. And it takes a lot of courage to play that role. And to persistently stand up for what you know, is in the long term interest of shareholders and broader stakeholders.

Kimberley Cole 33:32
Yeah, I also think like, the risk and compliance professionals are also having to expand their knowledge and understanding across a whole range of different areas, like, whether it’s technology or its ESG, like the remit is really increasing, the scope of what they’re asked to look at is also, you know, meaning that you’ve got to be quite adaptable.

Nathan Lynch 33:54
Oh, yeah, you know, it is such a technological space. So we’re now looking at machine learning and things like that being deployed. Whereas before, we might have had static filters. And your determination and your curiosity are really going to be benefits if you’re trying to upgrade your skill set so that you can talk to the developers and the tech teams and other parts of the business. Yeah, I think you’ve raised a really good point there, Kimberley.

Kimberley Cole 34:19
And what about thinking about the year ahead? What are you focused on at the moment? Like, what are those key stories that are important for your readership and your customers?

Nathan Lynch 34:29
Probably the big one is board and senior management buy in, it’s still a challenge. It’s still a big issue. And by getting that board and senior management buy in, you’re gonna get your mandate. You’re gonna get your resourcing, you’ll get the staffing that you need. And most importantly, you will see values transformed into culture, which is so important. It’s got to be part of organizational culture. Otherwise, it’s box ticking and window dressing.

Kimberley Cole 34:55
So that sort of Tone From the Top theme still remains?

Nathan Lynch 34:59
Still remains. And it’s almost like the price of a well run organization is eternal vigilance, you know, like the price of good culture, you constantly have to be vigilant about that. And that’s where the risk and compliance team can be invaluable. But also, there’s the mercurial nature of the threat. So as we’ve seen, say COVID play out, and the rapid shift to non face to face business and digital payments, you’ve seen a whole new panoply of threats emerge. And so that’s something that all organizations are really having to struggle with and adapt to. So I think there’s some pretty big issues that we’re seeing coming down the line this year.

Kimberley Cole 35:39
Excellent. So I think everyone should really want to read The Lucky Laundry. And I am very excited that we’re going to have five signed copies to give away so we will send that out in the Risky Women newsletter called ROAR with more details. But now what I’d love to hear is your rants and revelations, Nathan. So what’s the best piece of advice you’ve ever received?

Nathan Lynch 36:05
Probably really looking back, it’d be do what you love, and just be really good at it, be your best that you can at it. And then you’ll never have to worry about money, the money will take care of itself. And that’s a kind of a ethos I was lucky enough to get from my parents, who just did the things that they thought they really were meaningful in life, dad was a bit of an entrepreneur and mum was a teacher. So I’ve just lived by that motto. And I think too often money can become the end, not the means, you know, we all know this game, it’s just a tool. It’s just a ledger, and an accounting system. And money is created with the stroke of a pen, on paper or on a mortgage contract where money is brought into existence, or nowadays, just a stroke of a keyboard. And these ones and zeros come into existence. And so you know, money is a tool, it’s something that we use to measure our contribution to society. But if you continually focused on getting money, it’s an extractive mindset. If you focus on just doing the things in life in your brief life, that really matter that you love, well you stand the best chance then of being good at what you’re doing. And once you’re good at what you’re doing things take care of themselves. So without getting too, you know, spiritual about it, that’s probably if I look back and plumb the depths of my psyche, it’s probably that. But you know, the other bit of advice I would probably say has been really helpful is to find a really good mentor. Like, stay humble in what you do. And I think if you love what you’re doing, it’s easy to be humble. And then if you’re enthusiastic and humble people will help you. They’ll help you in your career, they’ll pick you up, they’ll mentor you. And we’ve all been mentored. Anyone who’s done anything has had great mentors helping them along. So for young people coming through, I’d be saying to them, don’t be afraid to ask, ask for support, advice, a bit of help out someone if they’ll mentor you. And you might be surprised, because people who have had a good career and get the opportunity to give something back and help the next generation along more often than not love to do that and find it really rewarding. So I think, you know, finding good mentors is such a important part of life and career.

Kimberley Cole 38:23
And now your rant, if you had a magic wand, what’s the one thing that you’d change?

Nathan Lynch 38:29
Compulsory bike helmets? Let’s get rid of them. Come on, what is this daycare? Kindy? Oh you mean in a professional sense?

Kimberley Cole 38:38

Nathan Lynch 38:39
OK sorry, I’m an Australian, it really bugs me. Okay, so in a professional sense, I reckon the laws that prevent bank to bank info sharing are so outdated and really due for an overhaul. And that’s in most of the world, you know. So why not give every country a section 314B mechanism like they have in the United States, where you can work on superSARs and share information within the bounds of respecting privacy and issues like that. So in Australia, for instance, in the Fintel Alliance, because they didn’t have anything like that they’ve had to have a fairly slow, cumbersome workaround where AUSTRAC will issue a section 167 Notice to a bank who’s sitting in the same room as another bank, and then they’ll have to go and issue the same notice to another bank, get that together, and then AUSTRAC can collate it. So these are very cumbersome. They’re outdated. In the US, this system of private to private bank to bank information sharing has been running for 20 odd years, and it’s been working pretty well in a lot of cases. So particularly around terrorism financing. I think it’s so important that it makes no sense to me that a bank can form a suspicion about an entity or organization that’s involved in terrorism financing. And then they report the customer and exit the customer. And then the customer gets a check. And then they take that down the road and open a new account, and the bank can see where the customer went. They know they’re high risk. They’ve done all the work, and they can’t say anything to their colleague down the street, it seems to be an absurdity. So I think we need to reconsider the way that we think about what are the costs? And what are the risks of changing that. Singapore has done some great work with COSMIC now where their exit decisions can at least be shared. And they’ve got a notification requirement there. So the customer has a right to appeal, which is one way of mitigating the downside. So we’ve got to think more creatively around that. So my rant – thanks, thanks for giving me a soapbox Kimberley – my rant is let’s move on that and incorporate that into some of the legislative reform that’s coming up in various countries like Australia, we could build that into tranche two.

Kimberley Cole 40:59
Excellent. Okay, we’re going to do a rapid fire round. Now I’m just going to give you four questions. You’ve got one word to respond. One word to describe the world of governance, risk and compliance?

Nathan Lynch 41:12

Kimberley Cole 41:14
One word, what is the biggest risk for our industry?

Nathan Lynch 41:19
Organized crime. Two words there!

Kimberley Cole 41:23
Run it together! Most important focus for the future?

Nathan Lynch 41:29
Technology, and people, technology and people.

Kimberley Cole 41:34
You can’t do my one word, can you? Are you optimistic, pessimistic or neutral in your outlook for the year ahead?

Nathan Lynch 41:41
Always optimistic. You have to be.

Kimberley Cole 41:43
Excellent. And now we end on our Risky Women recommendation. So I mean, we’ve spoken about your book, but are there any other books that you would suggest to read?

Nathan Lynch 41:55
Oh, there’s many before you get to my book! Look, if I if I gotta give any I’d have to say The Infiltrator by Robert Mazur, Bob Mazur, who went undercover and infiltrated the Medellin cartel and did all this amazing work as an undercover agent. And he’s now got a follow up book out called The Betrayal. So those are absolute must reads for anyone in the financial crime Risk and Compliance space.

Kimberley Cole 42:21
Excellent. Something worth watching?

Nathan Lynch 42:24
Ozark! Always! Goes out on Netflix is just great. And you can also watch The Infiltrator as a movie if you like.

Kimberley Cole 42:32
Yeah, that’s right. I have seen that as a movie. Great!

Nathan Lynch 42:35
Brian Cranston. And he’s coming back to do The Betrayal. So there will be a movie of The Betrayal as well at some point.

Kimberley Cole 42:41
And what is your favorite podcast?

Nathan Lynch 42:45
Aside from Risky Women you mean?

Kimberley Cole 42:46
Oh, of course. Yes.

Nathan Lynch 42:48
Yeah. Okay. Well, I’m really enjoying the stuff that Project Brazen are putting out. So that’s Bradley Hope and Tom Wright, who did the Billion Dollar Whale, they’ve now got a production company where they do these podcasts with just amazing production values. So it’s not just the content, it’s the way they deliver them. It’s like the golden age of radio 2.0, where they’re these colorful stories with all the sounds and you know, real interviews and background sound production, so you can just feel that you’re there. So they do a really great job. And one of the starting points you can look at is a podcast they’ve done called Fat Leonard, which was about a gentleman who sort of had the US Navy in his back pocket in Southeast Asia. It’s an incredible, incredible story.

Kimberley Cole 43:36
Excellent. Well, thank you, Nathan, for joining us on Risky Women Radio and being our first man to talk on the show. It’s been brilliant. And we loved hearing all about The Lucky Laundry. It’s been great to have a chat with you.

Nathan Lynch 43:52
Thank you so much. And a big shout out to all the amazing women that work in the field. And whether that’s, you know, sometimes the litigators or working at the Australian Government, solicitor and pushing cases through, women really just do a phenomenal job in this sector. And I think we’re at that point where it’s certainly a diverse industry and you’ve done a great job of contributing to that. So congratulations.

Kimberley Cole 44:17
Thank you, Nathan, and lovely to talk to you.

Nathan Lynch 44:20
Always a pleasure. Thank you, Kimberley.

Kimberley Cole 44:23
Thank you for listening to this episode of Risky Women Radio, be part of the ongoing conversation and learn more about our events and other programs at riskywomen.org

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