'Fighting evil is not competitive': How banks help detect human crime

Transcript:
Penny Crosman (00:04):

Welcome to the American Banker Podcast. I'm Penny Crosman. For the past 25 years, Ian Mitchell has been fighting fraud, largely in the financial services industry, and more recently at a new firm he founded called The Knoble. He is also a singer songwriter and he's also someone who works with banks to help detect and catch human trafficking with a focus on the Super Bowl. There's a lot to talk about, but Ian is here to tell us about his work and how things went at this year's game. Welcome, Ian.

Ian Mitchell (00:37):

Hey Penny. Thank you for having me here. It's wonderful to be with you again and appreciate the attention of all the audience.

Penny Crosman (00:42):

Sure. So you have a really interesting background. You've led fraud detection teams at several banks, including Citi, USAA, Ally, Fifth Third Bank, GE Capital. You've also worked at Oliver Wyman and PwC. Forgive me if I missed anything major from your corporate resume. Then you left the corporate world and became a musician for a while. How did that transition come about?

Ian Mitchell (01:09):

Yeah, I love the story. I think so often, so many of us have multiple hats or personalities, if you will, especially for those who have been involved in corporate America a long time. And I've been writing and recording music since I was, well, I've been writing music since I was six and recording music for as far back as I can remember also. And that's always been an important part of my life. But as you said, I've been a 25 year banker give or take, and I've worked at some wonderful organizations, helped fighting fraud around the world. I think the number's over 24 countries, the number changes all the time and I lose count. But I've been hugely blessed being in the banking world. But about six or seven years ago, Penny, I left banking and I decided to just focus on the music and wrote a couple books and just was ready to move on from corporate America. And that's how I started really focusing on the music before this whole Knoble thing even came to be. I kind of wore all the tread off my tires in my corporate life, if you will.

Penny Crosman (02:04):

Yeah, well I came across one of your songs called Another Road, and if you don't mind, I'd like to play a little bit of it.

Ian Mitchell (02:12):

Love it.

Penny Crosman (02:28):

So what kind of inspired you to write this song or what is it about?

Ian Mitchell (02:32):

I love that song. That song was written several years ago when I actually left. I was most recently I led a big part of the fraud practice at Pricewaterhouse, PwC. I was a partner there for three years. I was a part of a great team there helping organizations, financial institutions and banks consulting, fight fraud building programs and risk assessments. Well, when I decided to leave, I had a great time at PwC. I really admired the leadership there. There really was a wonderful team. It was very hard for me to move on, but I decided to move on because I wanted to more focus on or spend more time focusing on the nonprofit I established back in 2019 called The Knoble. I just felt like every day I was still fighting this battle of wanting to do more good fighting human crime at the same time, not having enough time with the requirements that a great organization like PwC was asking me to do. So I needed to work different. So that song, Another Road, was about me going on another journey in my life, even though it was difficult and even though part of me didn't want to and it was scary and there were moments of, what am I doing? It was an opportunity for me just to walk that out and very boldly do it. Because I've done it a couple times before in my life too.

Penny Crosman (03:38):

So briefly describe the mission of The Knoble. Is it basically to shine a light on human trafficking and help law enforcement find the perpetrators?

Ian Mitchell (03:52):

I think what you said, it definitely is a huge part of the mission and maybe even a byproduct of the mission of The Knoble. The Knoble really is a network of financial services, financial crimes, law enforcement, all these fighters coming together that show up every day around the world at banks and in law enforcement agencies and NGOs that show up every day fighting either financial crimes like money laundering and fraud or other types of banking activities coming together to fight what we call human crime. What I fundamentally believe is that every day there's hundreds of thousands of these people that wake up every morning and by getting them involved in this human crime fight that includes human trafficking, child exploitation, scams and elder abuse, if we get them involved, we'll have better data, better technology and better people than the bad actors. And I think that's what we have to realize is so many of the right knight or army is actually showing up every single day at wonderful organizations, just maybe for the first 20 years of my career, didn't realize that behind every transaction was a human being and didn't realize how they could maybe live a life of purpose or have impact in their day job.

(04:57)

And so that's the whole goal of The Knoble is to unite this network of people that are fighting financial crimes and are in banking or law enforcement, unite them to work together, to fight human crimes, to learn together, to do projects like the Super Bowl project together so that we can all raise the tide for all organizations and all peoples, because I think a lot of the human crime fights we're pretty nascent. We're pretty early in the journey. And so by working together collaborating and using projects to facilitate the learning, we're all going to show up in our day jobs a lot stronger and protecting a lot more people in the process.

Penny Crosman (05:34):

These are all hidden things, aren't they? The elder abuse and the child exploitation and other forms of crimes that you are talking about. Are these things on the rise necessarily or is it more that there's a realization of organizations like yours that the data is out there, they're like breadcrumbs that can be connected to find this behavior in a way that maybe we couldn't do 10 years ago?

Ian Mitchell (06:08):

So when it comes to things like human trafficking and child exploitation, I'm still new in this fight. I started The Knoble in 2019 after a meeting with Matt Friedman, the CEO of the Macon Club, and I started learning in 2018, 2019 about these problems. And so I can't go back and give you a perspective of decades other than what I've been told and what I've been told is there's more human trafficking, there's more modern slavery in the world today than any other time in human history. I think the United Nations just said recently that there's almost 50 million people caught in modern slavery today. Those are huge, astronomical numbers. And so when you look at some of these human crimes like human trafficking and child exploitation, one of the things that I think we've begun to realize, especially in the banking world, is we've done such a great job managing fraud and money laundering and credit losses that we didn't maybe realize behind these transactions, the human factor behind the transactions, the example I love to give, that really opened my eyes.

(07:05)

It's a really simple example, but even dollar transactions in the middle of the night on a credit card at a nail salon or a massage parlor might not just be a service that you think, it might actually be people being bought and sold behind the scenes. And so I think that was a really simple example of how it connected with me back in 2018 timeframe of when I realized that maybe I've missed something. And I think what we're seeing Penny here is there's the network of The Knoble's over 2,500 fighters already fighting human crime. And I think as the more I have these conversations, I'm realizing more and more people are awakened or are becoming awakened to this idea that maybe there's something I can do and maybe I missed some of the battles that exist in the middle of fighting fraud and money laundering.

(07:50)

We have a lot of programs in place and policies and great controls in place to protect our customers from fraud. For example, we spend more technology to solve $128 credit card fraud transaction than we do saving a life. And so I think what we've realized now is we can run anti-money laundering and profitable organizations and we can also care about the human being behind the transaction. And I think that's what I'm seeing. And so I'm unbelievably encouraged by, I think the problem's been there, but I think now because of amazing organizations that are coming in and saying, I want to start measuring this, that's how it always starts in risk management. You have to me measure the problem before you can really, so we're starting to measure it. We're starting to build programs around it. And so we're in this journey. I don't necessarily know that it's increased, but I think we're hearing more about it because there's a lot more wonderful people partnering with the great people in law enforcement to take action.

Penny Crosman (08:44):

Well, as you mentioned, banks constantly monitor all transactions, card transactions and any kind of payment for signs of fraud. For instance, somebody who you have reason to think is in New York, their credit card is being used in Baltimore. You send them an a alert or something to check and make sure it's really them. How can banks start to apply that kind of detection toward finding the kind of human crimes that you are talking about? So maybe I do want to go to a nail salon at midnight. I mean I really wouldn't, but how do you start to find those kinds of signals?

Ian Mitchell (09:31):

Without oversimplifying it, I think it first starts with intentionality. We have some of the smartest people all around the world building anti-money laundering programs and anti-fraud programs and credit risk policies and programs to find needles in haystacks. And so if we start just doing what we do in the banking world and we do very well define the problem is first where you build a policy and you build what you're solving for, in this case, these human crimes, you create policies on human trafficking, you create policies on child exploitation and figure out how they build into your programs. And it's not just a compliance effort too. And this is a side note, but this isn't a compliance problem of complying with regulations. There are regulations that require activity to be done, but this is us taking a more risk management approach taking approach that's the best of banking and how we are profitable and how we run good businesses.

(10:23)

It's taking the same infrastructure and programmatic approach that we do in other problems. We start defining it, we measure the impact and we start actually building and building it into our current resources and processes. We don't necessarily have to do anything other than train frontline analysts and call center reps and people at retail branches. It's just bringing awareness. The little things we can do in banking, it doesn't take a lot that we already have built the infrastructure. We're just replicating it for some new types of risks. It's not a giant expense. And it honestly is a passion project that actually I've found that ignites a lot of the employees that are showing up in their day jobs. And so there's a huge ROI for starting to look at human crimes in a different way and take action on it.

Penny Crosman (11:08):

And are you sometimes able to determine patterns of typical behavior as you were saying, these transactions at a massage parlor at midnight or something? And then can you give banks these patterns as things that they can look for to try to identify this activity?

Ian Mitchell (11:31):

Yeah, the short answer is yes. And I want to talk, I know we're going to talk about the Super Bowl project in a little bit, so I won't talk trafficking right now. What I will talk is, let's take scams for example. I'd argue that's the biggest financial crime problem we have in the world. And the reason I argue that is because I have a company that's called Mission Omega that does fraud consulting and we have clients, we're helping them solve fraud problems, but we actually also realize that there's money muleing happening behind the scenes. And what we've learned from the pandemic is this type of authorized fraud has gone up exponentially and even before the liability shifts to banks, we're seeing this problem where money is being taken out of our countries, out of our customers' wallets, accounts being duped, and it's being moved to facilitate some very evil things.

(12:12)

And so for that example, scams, we're seeing this show up in our data patterns. We're seeing this show up in our analytics now we have to build the programs to figure out what we do when we suspect a customer being subjected to a scam. How do we treat that? How do we make sure it's not just something we move on from, but we actually help the customer both minimize the muleing activity and help the customer recover from that. So we have those patterns. We have a lot of analytics in place for those. A lot of organizations have done that for elder exploitation for years, and it's been largely a compliance driven effort. But now I'm seeing that they're taking the same approach that they would use to solve fraud and they're applying it to exploitation. And Project Umbra is an unbelievable project we did last year where five banks got together and looked for, and I just apologize if there's any little ears listening to this, if they're in the car, maybe hit mute for a second or turn down the volume.

(13:02)

But these five banks came together and were looking for the streaming of live sex acts against children partnered with law enforcement and looking at data patterns to see actual in the financial transaction. We can tell that there's something not going on. And there were some unbelievable cases escalated to law enforcement to aid them in investigating. And without the banks involved, we may have not seen these financial patterns and those people that maybe the were at the banks, it's not necessarily to find people in the banks it to uncover some stuff that maybe has been hidden because we haven't known to look. And that's a project. Umbra is a great example. And so is the Super Bowl project, which I know we'll talk about. So

Penny Crosman (13:40):

Let's talk about that, the Super Bowl project.

Ian Mitchell (13:42):

Yeah. So the Super Bowl project, I will tell you have to maybe first understand the model of The Knoble. So the whole goal of The Knoble is to awaken the financial services industry and law enforcement, and to come in and partner with law enforcement and NGOs and all the organizations out there already doing this bring the financial power to the fight. And so to awaken them, to equip them with the language like modern slavery and the taxonomies that we need to build programs and then to deploy them. And I always use in the deployment as I have a 17 year old son, but when he first got his driver's license at 15 as a permit, he didn't just pass the test, we put him in a car and say, go drive. There was actually months where I sat next to him in the passenger seat, white-knuckling it while he was learning to drive.

(14:31)

So because we've been so nascent in the human crime problems and most banks have, we're having to learn together. And so this equipped part of our journey is to create projects like Project Umbra, like the gift card project that was sponsored by Walmart. There's a bunch of other projects we do, and the Super Bowl project is a project around human trafficking. It's not necessarily for the outcome of rescuing. It's for the outcome of us all learning together and practicing working together with law enforcement. I think it sounds so simple, but honestly I always say fighting evil is not competitive. And when it comes to human crimes, whether it's child exploitation or modern slavery, I think we can all agree that these are some real evils. And so the Super Bowl project was a project that we love to take events. We are not saying by any means that there's an increase in human trafficking around the Super Bowl.

(15:20)

The goal is everybody, especially in our country in the United States, we get excited about the sporting event and it was a catalyst for us to get banks together to learn together, to share information, and to help law enforcement and create a new way of working with law enforcement. That's what the Supers Bowl is. So I want to make sure everybody knows that that is the whole goal of it. So this year, this is our second time doing the Super Bowl project. We had over 28 financial institutions, over 50 individuals involved in the project across financial services. We had some of the largest banks in our country, some of the regionals, some of this mid-size regionals, local banks. We had crypto organizations all coming together with law enforcement to basically put in scenarios. So we created some patterns that we've seen over the years and we're refining our scenarios.

(16:07)

So they all put in three scenarios and then they worked with law enforcement on some of the intelligence side of the house. And so we came together to try to detect human trafficking in a new way and really get banks involved. And I'll tell you, the law enforcement, I have to take a pause and just say, I'm so unbelievably grateful to law enforcement. I've, the amount of appreciation that I have for them now is higher than I've ever had in my life, understanding the challenges that they have and the hearts they have and how hard their job is. But I, there's the Center for Countering Human Trafficking that's in DHS in Homeland Security. Tracy rags there as a leader there, and he led over a hundred law enforcement officers that worked together with other organizations like the National Center for Missing and Exploited Children that worked around this Super Bowl effort.

(16:50)

Over a hundred professionals came together and they really wanted to just go and see how can we start using situations like this to do some good? And this basically for our project with these 28 financial institutions, this was our training ground to work together. We created an escalated SAR process. By the way, for any banker that's on it is required. FinCEN does require us to report suspicious activity of human trafficking to them. There's a checkbox on the SAR forms. And so it was an opportunity for us to work together to practice that. There was some also other escalated paths that we had to put in these scenarios. A lot of our banks never had any detection in place for human trafficking. And it's not that they didn't want to, didn't know how to. And so some of the banks that have been doing this for a while came on and they were giving best practices to some of the other banks.

(17:36)

We were modeling this fighting evil is not competitive. So unbelievably, well there were the scenarios we put in. We actually were refining the scenarios in real time. Some of the bank analysts were coming in and saying, this is what I've seen. They were looking for patterns of, for example, online merchants. They were looking at patterns of spending patterns and how do you reduce false positives of something that may alert or trigger. It was beautiful to see these 28 organizations work together. And last thing I'll say is with the results will come in several weeks, but what law enforcement shared with me is there were several children that were rescued as a part of this initiative and there were some unbelievably escalated cases that they're looking into now and they're investigating and they're so grateful by the whole organization, not just The Knoble, but all the other partnered organizations that came in and did so much good.

(18:29)

And I left encouraged because for example, I was on a meeting last week with all the banks, over 50 people were involved in this. And one of the regional banks, a small regional, started sharing that they put in the scenarios and they put in some of the other things that law enforcement said, and they already started seeing patterns of people, customers on their books that they wanted to look into. And they were so grateful because it's just not something they ever thought about looking in. So we did this in a collaborative and honestly helpful way. I think the best of bankers came out. I always love to say banking with heart. That's what we demonstrated through this project. And we significantly helped our great partners in Homeland Security and the Center for Countering Trafficking and the others.

Penny Crosman (19:14):

So next year the Super Bowl will be in Nevada. Are you getting ready to do the same work again and could that be more challenging because of the state laws there?

Ian Mitchell (19:22):

Yeah, so we're really going to take the lead from our law enforcement partners and the Center for Countering Trafficking and take the lead on how we want to approach it. Right now. We're still trying to wrap up this last Super Bowl and get all the learnings, refine our scenarios, improve the processes and hopefully increase the number of financial institution participants. And so I think we're still several months if not half a year out from really starting making the plans with our law enforcement partners. But that's the goal for us is to be a part of all these types of events. We did the World Games also last year, and really the goal of these events isn't that these events again, increase the risk for human trafficking because it's happening all the time. But we can use these events to be as a catalyst for all these banks to build programs and build defenses and response plans. And so we're looking for right now, what can we do? What are the events we can do even before the next Super Bowl or the next, for example, world Games like type event. Those are just really important efforts for us to go in and learn together.

Penny Crosman (20:21):

So if people want to reach out to you, should they just go to The Knoble website?

Ian Mitchell (20:25):

Sure. Yeah. So just about even The Knoble getting involved. So being involved in The Knoble is completely free. We have not just financial crime folks, we have operations folks and credit risk folks and just all levels call center everyone. It's completely free. Go to theknoble.com. Noble with a K stands for Knights. It's completely free for individuals and you can jump in and get involved in projects and roundtables. Everything we're trying to do is to build this network that honestly, I think we're probably over 3,000 right now of active people. Last year, I think we had 561 active individuals involved in our initiatives, which I love. So that's free. On the corporate side, we have a bunch of corporate members and sponsors that we're so grateful of. That's how we keep it going. And this is just really just trying to leverage the good from the ecosystem and everybody individually, we all have skills to offer, whether it's creative skills, analytical skills, and so it's everyone coming together to try to do good and fight this human crime problem.

Penny Crosman (21:25):

All right. Well, thank you for joining us and for sharing this information with us. And thank you all for listening to the American Banker podcast. I produced this episode with audio production by Kellie Malone. Special thanks this week to Ian Mitchell at The Knoble. Rate us, review us and subscribe to our content at www.americanbanker.com/subscribe. For American Banker I'm Penny Crosman and thanks for listening.