Business Schools Prepare Students To Fight Financial Crimes. Yet, Challenges Remain

The history of financial crimes likely stretches back millenniums starting with humanity’s use of monetary means. As civilizations modernized with laws to prohibit such crimes and to protect citizens, the fight against white-collar crimes has begun. However, to do so, not only knowledge of the law and legal system but also a profound understanding of finance is essential.

Responding to a surge of scams, the enlarging underregulated cryptocurrency market, and Russian oligarchs’ continuous attempts to work around the international sanctions over the country’s invasion of Ukraine, finance faculties at business schools have voiced for more courses to fight such financial crimes.

Laurent Deville, associate professor for Finance at Edhec Business School in France, expressed his concerns about whether some of his students may end up involved in financial crimes. He said, “I’m always frightened when I read the newspapers,” and continued, “It is our duty to make sure that these young and talented students will not become embroiled in the next dirty money scandal.”

His school has recently employed a philosopher to guide finance students through ethical dilemmas and moral gray areas in business practices, working to prevent its students from being involved in financial crimes intentionally or unintentionally. Deville endorsed the schools’ effort to fight financial crimes in its own way. “Financial crime is harming economic growth and public faith in the financial system,” he said.

Few other institutions also aim to curb financial crimes in the market. While Bangor Business School in the U.K. offers a course on financial crime under its Chartered Banker MBA program, Charles Sturt University in Australia provides full graduate diploma and certificate programs in fraud and financial crime, preparing students for a career path fighting against white-collar crimes.

In February of this year, Utica College changed its name to Utica University. The school provides numerous options for students to develop their careers in financial crime investigation, ranging from certificate level to undergraduate and master’s degree levels. Photo: Utica University

For those who have already started their career in finance or business, and yet want to specialize in financial crime deterrence and investigation in the corporate, law enforcement, or public sectors, Utica University in New York offers an extensive list of online degrees for both bachelor and master of science. Namely, there are B.S. in Criminal Justice with White-Collar Crime Specialization, B.S. in Fraud and Financial Crime Investigation, M.S. in Data Science with Financial Crime Specialization, and M.S. in Financial Crime and Compliance Management.

However, teachings on and against financial crime are still not widely available. It is partly due to a lack of interest from students but also due to the limited number of job opportunities the market currently provides.

Philippe Dupuy, a finance professor at Grenoble Ecole de Management in France, said, “I thought we would be the first of a big wave of financial crime teaching in business schools, but it hasn’t happened because there are not many specialists in this subject as it crosses the academic borders between finance and law.” The school started a course a decade ago to help its students acquire the skills and knowledge necessary to recognize illicit activities in the market, such as market abuse, money laundering, and financial statement manipulation.

On the other side of the world, there are efforts to equip students with the knowledge of the latest technology, integrating finance with machine learning. Jiwei Wang, associate professor of accounting at the Singapore Management University, teaches and trains finance students to use algorithms. He said that the new technology can detect abnormalities from an enormous amount of financial and non-financial data, alarming the users with potential financial crimes within a company.

He also noted that although large banks have been arming themselves with compliance and risk management experts ever since the global financial crisis in 2008, an increasing number of his students are hired by big tech companies following the surge in online frauds and scams during the pandemic. “The rise in online transactions and the increasing availability of data have exposed tech companies to the threat of online fraud and data privacy or security violations,” he commented.

Developed by the University of Portsmouth and Crowe, a risk management firm, the Financial Cost of Fraud 2019 report showed how much damage and costs fraud inflicts on the global economy. For there has been a surge in frauds and scams during the pandemic, the overall damage and costs of such financial crimes would be substantially greater now. Source: The Financial Cost of Fraud 2019 by Jim Gee (Crowe LLP) and Professor Mark Button (University of Portsmouth)

Despite continuous efforts from many sectors to fortify their organizations and protect their consumers and clients, financial crimes still cost trillions of dollars to businesses and individuals around the world. The University of Portsmouth reported in 2019 that the global financial losses due to fraud alone equate to 6.05 percent of the world’s GDP, approximately $5.127 trillion.

Considering that the number of fraud and scam attempts has skyrocketed since the pandemics swept the world and that the figure above only accounts for fraud, it is reasonable to expect the overall damages and costs of financial crimes to be immeasurable.

However, while business schools’ aim and efforts to nurture experts to fight financial crimes are, therefore, praiseworthy, they are still facing challenges in preparing students to jump into practice after graduation. According to the International Compliance Association, the graduates need to have “an understanding of the relevant products and services, legislation and IT systems” to be hired and work for financial crime prevention (FCP). Building an understanding of such a vast range of fields requires tremendous time and effort all the while there are not many relevant job openings in the market.

Fortunately, the job market outlook for those who desire to start a career in financial crime prevention, detection, and investigation seems increasingly optimistic. The Bureau of Labor Statistics reported that “employment of financial examiners is projected to grow 18 percent from 2020 to 2030, much faster than the average for all occupations.”

With about average of 6,900 yearly openings for relevant jobs, business schools and students may now have one less worry in their preparation to fight against financial crimes.

 

Read More: Increased Financial Crime Risks to Businesses From All Sides at an Unprecedented Time