VBS red flags too slow

All eyes are now on VBS and the many gratuitous payments made to third parties, but I think there is a wider issue that impacts the banking system as a whole. Given the large number of people involved, surely many of these payments would have been made to bank accounts at other banks?

My understanding is that antimoney-laundering controls are embedded within the national payment system and within the payments systems of the banks, precisely to prevent and detect payments such as those made from VBS.

I also understand that banks are by law obliged to flag suspicious transactions to the Financial Intelligence Centre for investigation. By all accounts, these payments happened over a period of time, they were frequent and they involved substantial amounts of money, yet it would seem the VBS payments were not flagged as suspicious and, if they were, nothing was done about them.

There is also the issue of very large amounts of money flowing through the bank accounts of individuals that had previously held modest amounts. As a common-sense measure this should also have invited scrutiny and raised red flags.

As a first line of defence against criminal activities, these antimoney-laundering controls would have given us a much earlier warning that something was seriously amiss at VBS.

Were these payments from VBS to other banks sophisticated enough to bypass the controls, or are our payments systems just not working as intended?

James Drew Via e-mail