Narrowing the gap and building relationships between LE and FIs

December 10, 2025

In the ever-evolving landscape and the seemingly non-stop escalation of global financial crime, a convergence of perspectives is essential, encompassing both police priorities and methods with those of financial institutions (FIs). It sounds counterintuitive and may shock people to realize that police and FIs confront and fight financial crime from diametrically opposed starting points. This contrast in mindset and the lack of a midpoint where police and FIs’ efforts meet leads to inefficiencies and missed opportunities when tackling financial crimes. Highlighting the necessity for a collaborative approach between law enforcement (LE) and FIs is essential to meeting the challenges of the rising numbers of financial crimes.

The LE’s perspective

It sounds counterintuitive and may shock people to realize that police and FIs confront and fight financial crime from diametrically opposed starting points

From an LE perspective, financial crimes encompass a wide range of deceitful activities aimed at financial gain through illegal means. Traditionally, LE’s financial crimes investigations focus on the underlying offense, the act in contravention of the criminal code and the response is most often initiated by a victim making a report. The response by LE is by its nature a reactive one as the offense has already occurred. The focus is on the investigation, the identification of perpetrators, the collection of evidence, arrests and ultimately the prosecution of those responsible.

The investigation with all its components listed above is, in most cases, the impetus for communication between LE and FIs. While it is the movement of illicit funds that is often utilized to obtain reasonable grounds and ultimately arrests and prosecution, the laundering of said funds is often not focused on, leading to a dearth of money laundering charges being laid.

The FIs’ perspective

An often-overlooked part of information sharing is the connection between LEs and FIs

In Canada, FIs focus on the protection of the country’s financial system as is mandated by the Proceeds of Crime (Money Laundering) and the Terrorist Financing Act (PCMLTFA). To meet this mandate, FIs utilize internal anti-money laundering (AML) financial intelligence units (FIUs), focused on recognizing and deterring the laundering of illicit funds through the banking system accumulated through illegal acts.

FIs play a key role in the information sharing loop through the filing of suspicious transaction reports (STRs) to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). The information shared may be passed on to LE through a disclosure process. FIs are not privy to this disclosure or to the ultimate outcome until it becomes public knowledge (i.e., in the form of an arrest).

In direct contrast to LE, anti-money laundering (AML) investigators are trained to recognize and identify suspicious transactions resulting from financial crimes but not on the predicate offense itself. In fact, the identification of money laundering often precedes any direct knowledge of the predicate offense from which the money was illicitly obtained. The reporting obligations of FIs aim to understand the “what” and “how” the financial system was used to perpetrate financial crimes.

What is the missing piece?

An often-overlooked part of information sharing is the connection between LEs and FIs.

With their focus viewed primarily through the lens of crime, police often conclude their investigations when an arrest is made. When it comes to prosecuting financial crimes, the money laundering techniques employed by bad actors to conceal their activities often go unexplored and, consequentially, unenforced. This is often explained by a lack of resources, a lack of understanding by officers and/or Crown attorneys, or a general lack of enthusiasm in our courts to proceed with money laundering charges.

It can also be explained, however, by the divergence between LE and FIs, as well as a lack of a cohesive strategy to combine both their perspectives and their focus on the money laundering resulting from the predicate offenses. LE must better understand the money laundering aspect and its value from the point of view of the FI and FIs must better understand LE’s focus on the predicate offenses and the timely gathering of admissible evidence for court.

In other words, while LE and FIs may in fact be investigating the same bad actors, their investigations are often carried out independently and in silos. This separation results in delayed coordination, fragmented intelligence and missed opportunities to collaborate earlier and more effectively.

Benefits of convergence

A more fulsome understanding of each other’s perspectives would lead to more effective communication and collaboration due to a greater comprehensive grasp of the other’s critical issues and requirements in their respective investigations. Enhanced communication and the breaking down of silos would aid both LE and FIs to understand the others’ priorities and needs.

In practical terms, this could result in fewer delays for LE when seeking production order results, or the determination that production orders are not required at all. Better understanding will allow for more targeted questions regarding what information is or is not available. The focus by FIs on the suspicion of money laundering could initiate and add relevant information to LE investigations. AML FIUs connect the dots between individuals involved in financial crimes, their habits and behaviors and ultimately key components of how they move the funds generated from their illicit activities. FIs could offer a key perspective to LE and their investigations.

For FIs, this new flow of information, resulting from enhanced mutual understanding, can enhance AML investigations by reaching reasonable grounds to suspect sooner and result in quicker determinations to de-risk clients.

Ideally, this could lead to the opportunity for both working in concert and acting proactively to disrupt and to deter financial crimes. In today’s world of boundless losses to financial crimes where most of the bad actors act with impunity, it is more important than ever for LE and FIs to work cooperatively with a focus on disruption and deterrence.

How do we narrow it?

Creating a framework for communication and building stronger relationships between LE and FIs is a proactive approach to tackling the issues in fighting financial crime, including more effective crime prevention, disruption and support for potential victims.

Canada’s “Assessment of Inherent Risks of Money Laundering and Terrorist Financing in Canada” states that “Canada recognizes that criminals can take advantage of the lack of information sharing abilities between reporting entities to facilitate illicit activities and to evade detection…. Financial entities play a key role in deterring criminals and terrorists from operating in the legitimate economy.”¹

LE must be better at following the money, not just to the point of arrest but afterward and beyond leading to more money laundering charges being laid and ultimately convictions. FIs and ultimately FIUs need to communicate with LE the red flags identified in their suspicion of money laundering and key insights on how financial crime utilizes the financial system. The collaboration of effort can hopefully disrupt the crime and prevent further damage for victims.

It is well-documented that actionable intelligence from FINTRAC results in success for LE investigations. As outlined in FINTRAC’s annual report, “FINTRAC provides actionable financial intelligence to Canada’s law enforcement and national security agencies to help them combat money laundering, terrorist financing and threats to the security of Canada.”² FIs also play a vital role and can provide strategic intelligence in more granular detail on the habits of bad actors and the movements of illicit funds. Information sharing between LE and FIs is a key component to stay ahead of misuse of the financial system.

Conclusion

By breaking down the silos that currently exist between the sharing of information between LE and FIs, we can create a unified front against financial crime. This collaboration and convergence of focus will not only improve the chances of apprehending perpetrators but also restore public confidence in financial systems, making communities safer and more resilient against the ever-evolving threats posed by financial crime.

Rather than beginning at opposite ends of an investigation where never the twain do meet, LE and FIs need to operate within a shared, collaborative circle―one where continuous communication and coordinated action is the norm, not the exception.

David Coffey, detective, Toronto Police Service, Financial Crimes Unit, Toronto, Ontario, Canada,