The financial sector—from banks to investment funds to financial service providers—is a pillar of the global economy and a platform for all financial flows, including illicit finance tied to trafficking and slavery. As such, the sector wields enormous power and potential to influence investments towards more ethical practices and requirements and identify and hold traffickers to account.
Global finance contributes to modern slavery in different ways. There are systemic problems inherent in the global financial sector; and economic problems that may drive or incentivize slavery.
Access to affordable finance
Access to affordable finance is a vital part of ending slavery. High costs associated with recruitment and/ or migration, and a lack of access to affordable financial products, means workers often rely on very high-interest loans: this is a key driver of debt bondage.
The “S” in ESG
Finance can be used to incentivize better business practices. Effective use of ESG measures by the global investment community and multinational corporations can influence and incentivize ethical models throughout supply chains.
Financial Crimes
Proceeds of modern slavery, whether illegal or “merely” unethical, flow through the global financial system. Data owned by these institutions can transform the fight against modern slavery: it can help to identify illicit finance tied to slavery and trafficking, investigate the source, and prosecute traffickers.
GFEMS supports products designed to enhance financial inclusion for workers across a range of geographies. These include affordable microcredit products to enable safe migration, and savings and insurance products to enhance worker financial resilience. GFEMS has also supported the development of innovative financial inclusion products for small-medium enterprises in the construction industry, tying access to finance to demonstrated ethical practices.
Financial institutions have access to data and information that is often an incomplete view of the full picture. GFEMS is a leading partner in efforts to build capacity and partnerships between different institutions, enabling better information sharing and coordinated efforts to identify and disrupt illicit financial flows tied to trafficking and slavery. We also work to create coordinated responses to identify illicit finance between financial institutions and government and law enforcement. Along with our partners at the Knoble and SAS Institute, GFEMS has successfully brought together over 135 financial crime experts from over 60 organizations, working together to bridge the gaps in financial sector action on modern slavery.
Global Finance
Creating new partnerships between financial institutions is a key objective of the Fund’s Global Finance portfolio. In 2020, GFEMS partnered with the Knoble and SAS Institute to support the Cross Industry Data Initiative (CIDI), which brought together over 135 financial crime professionals from over 60 institutions, who committed 1500 volunteer hours over three months to the project. Together, they identified 25 different areas in which financial sector actors can improve collaboration and partnership. Organized into themes, these new networks are focusing on creating solutions for policy, detection and prevention, victim assistance, and tech and data enablement.
Working with local partners, leaders with lived experience, and others invested in human dignity, GFEMS is building the momentum needed for sustainable change.