Financial Control in Modern Slavery: How Banks Can Help Identify and Disrupt Trafficking.

Human traffickers frequently exploit financial control as a powerful tool to maintain dominance over their victims in modern slavery. This tactic effectively strips individuals of their autonomy, reinforcing the traffickers' grip and perpetuating cycles of abuse. Victims of modern slavery often face extreme economic dependence, making it almost impossible for them to escape. Understanding how traffickers use financial manipulation is crucial to tackling the issue and financial institutions are uniquely positioned to intervene. Banks and other financial organisations can play a pivotal role in identifying and disrupting human trafficking networks, particularly through the analysis of financial behaviour.

Traffickers exert financial control in various ways. They may force victims to open bank accounts, credit cards, or other financial instruments under duress, which are then used by the traffickers to launder money or obscure illegal activities. In cases of labour trafficking, wages may be withheld or funnelled through accounts managed by traffickers, with victims receiving little to no compensation. In the context of sex trafficking, traffickers often control all earnings, creating an enforced dependency. Even when victims do have access to their earnings, traffickers may impose 'debts' for travel, accommodation, or basic living expenses, ensuring the individual is always financially tied to their abuser.

These patterns of financial exploitation present opportunities for financial institutions to identify and intervene in cases of modern slavery. Banks and other institutions routinely monitor financial activities for signs of money laundering and fraud, and many of the red flags for human trafficking align with these practices. Unusual account activity, such as rapid transfers in and out of accounts, a lack of access to wages for workers in certain industries, or multiple individuals linked to a single account or phone number, can indicate potential exploitation.

In addition to monitoring for red flags such as these, financial institutions can refine their systems to better capture the nuances of trafficking. Traffickers often use personal bank accounts for business purposes or funnel small amounts of money frequently to avoid detection. Banks can enhance their risk algorithms to detect patterns like these, particularly in sectors where trafficking is more prevalent, such as hospitality, agriculture, and domestic work. By understanding these indicators, institutions can collaborate with law enforcement and anti-trafficking organisations to intervene when there is a strong suspicion of human exploitation.

Another critical aspect of financial control in modern slavery is the use of 'shadow banking,' or unregulated financial channels that are often harder to detect. Traffickers may use informal networks or digital currencies to obscure the flow of money. While these methods present challenges for detection, banks can still play a role by scrutinising transactions that cross between regulated and unregulated channels, particularly if there are ties to known trafficking hotspots or sectors.

Financial institutions can also empower victims by ensuring they have access to financial services independent of their traffickers. Many victims of modern slavery face barriers when trying to open bank accounts or access their earnings because they lack documentation, identification, or legal status. Banks can work with NGOs and law enforcement to create specialised programmes for survivors, offering them safe, anonymous access to financial resources. Providing education on financial literacy and offering alternative banking solutions, such as mobile banking or prepaid cards, can help survivors regain control over their finances, making it easier for them to rebuild their lives.

Furthermore, banks can increase their impact by partnering with governmental and non-governmental organisations. Financial institutions often have access to data and insights that, when combined with the expertise of anti-trafficking groups, can lead to more effective interventions. By sharing anonymised data with researchers and law enforcement, banks can help build a more comprehensive understanding of how traffickers exploit the financial system. Cross-sector collaboration is essential to developing proactive, systemic solutions.

Potential solutions to the issue of financial control in modern slavery are varied, but they must be holistic and multi-faceted. Banks need to go beyond compliance with anti-money laundering laws and engage in a more proactive approach to identifying human trafficking. This could involve training employees to recognise the signs of financial exploitation, developing more sophisticated algorithms to detect unusual account activity, and collaborating with law enforcement and civil society to take action when red flags arise.

To prevent traffickers from pretending to be victims and bypassing security measures, banks can adopt more sophisticated approaches focused on verifying true ownership and control. One method is to integrate behavioural biometrics, which analyse how a person interacts with their device, such as typing patterns, navigation speed, or the way they hold a phone. These subtle behaviours are difficult to replicate and can help distinguish between a trafficker and a genuine account holder. Another approach is to conduct in-person or video verification when opening accounts, ensuring the individual is physically present and matched to identification documents, with regular checks or updates for vulnerable individuals.

Additionally, banks could establish partnerships with anti-trafficking organisations to develop "safe accounts" for at-risk individuals, where alerts are triggered for suspicious patterns, and special protocols allow intervention by trusted third parties if control of the account is suspected to be compromised. Companies employing at risk workers could also join such partnerships.

Ultimately, financial institutions are on the front lines of the fight against modern slavery. By recognising the role that financial control plays in human trafficking, they can help dismantle trafficking networks, offer victims a pathway to financial independence, and contribute to the broader goal of eradicating modern slavery. This requires a combination of vigilance, innovation, and a commitment to working collaboratively with other stakeholders. If financial systems can be used to oppress, they can also be correctly leveraged as powerful tools for liberation.