Fincrime Fighters Expert Interviews: Fabrício Lima

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In this installment of our Fincrime Fighters Expert Interviews, we had the privilege of speaking with Fabrício Lima, Head of AML/CTF in Brazil at Nubank. You can catch Fabrício on LinkedIn.

Who are you and what do you do?

My name is Fabrício Lima. I live in São Paulo, Brazil. I’ve been at Nubank for 3 years now as Head of AML/CTF in Brazil.

What was your route to becoming Head of AML/CTF?

I graduated in business management and I have an MBA in Economics and Financial Markets. I’ve worked in banks my whole life, starting in a retail branch during my second year of college. I started as an assistant, became a teller, and then moved to internal audit as a trainee. When I graduated, I started my career in control functions in financial institutions, and moved to several different financial institutions in Brazil.

In 2006, I started at Santander as an AML/transaction monitoring analyst. I worked through several different positions at Santander until I became Compliance Manager. Then I moved to HSBC in 2013, where I worked on building the FIU in Brazil. I was responsible for deploying and implementing this function in Brazil, reporting to both the local head of financial crime and the global FIU head. It was a great opportunity to join HSBC at that time because HSBC was increasing its global financial crime standards and it was an important job. I stayed at HSBC until 2016, when HSBC sold its retail operations in Brazil. I then moved to UBS as a wealth management compliance officer.

I moved to Nubank in May 2019. Since then, I’ve been the Head of AML/CTF and sanctions for Nubank in Brazil. Now, we have operations in Brazil, Colombia, and Mexico. I am the lead for AML in Brazil, which is the main market for Nubank.

What is your favorite thing about being Head of AML/CTF?

When I started in AML in 2006, it was a coincidence. I was invited to join Santander’s team after they found my CV on a website. I started and very quickly understood I’d found my career. I have an investigative mind that I developed during my time in internal audit. Working in AML investigations, I found the perfect fit for my professional profile.

In AML, we are in a career that is a very new science compared to credit risk or market risk. We are much younger in terms of managing this type of risk. Looking forward, we still have a lot to develop, deploy, and improve. The regulatory side is a very important part of our job, but I’m amazed by the other side of reputational risk and the capacity to identify suspicious activity. It’s a pleasure to work in something that has a real meaningful impact on society. AML makes a very important contribution to society.

It’s a pleasure to work in something that has a real meaningful impact on society. AML makes a very important contribution to society.

The joy I had in my first case of reporting a bad guy to regulators, I have that same joy now 15 or 16 years later. When my team shows me a case of a criminal scheme and we report it to the regulators, sometimes we see the results in newspaper reports about people being arrested and we know that it was thanks to our job. This brings me a lot of joy!

What is the hardest thing about being Head of AML/CTF?

The hardest part is that financial institutions are complex. We have several different interactions and priorities that we have to deal with. It’s not always easy to implement what you want. You must be very skilled in handling all the demands and requests. We have to look at regulations, consider regulatory expectations, keep processes efficient, and find solutions that fit the needs of the company. We sometimes have back-and-forths or push-backs that are frustrating, but finding the balance is part of being a good AML professional.

If you had to choose the number one most important skill to do your job, what would it be and why?

It’s really important to be able to balance all the priorities. Being Head of AML/CTF requires you to understand how to manage different stakeholders.

Being Head of AML/CTF requires you to understand how to manage different stakeholders.

On the one hand, you have your team and need to keep your team motivated. Sometimes tasks are repetitive and operational, and you need to keep the team focused and motivated since you always have a lot of demands and work. On the other hand, the business must run efficiently and we must be concerned about costs. Then we have the regulators expecting you to improve to the highest possible level. You have to identify the middle ground where you can meet all expectations, and it’s a really big challenge.

What is your top interview question for hiring financial crime compliance experts?

Technical expertise is easier to identify through questions about regulations and examples. But I love to ask candidates for an example of something that was successful that the person was proud of, and on other hand, something that the candidate regrets or wishes they could have done differently. I try to understand how the candidate measures their strengths and weaknesses and how bad experiences helped the candidate improve. Is the candidate someone who learns from their mistakes?

I also try to measure passion about AML. We are a new science and are evolving constantly. The market is getting more complex and we need people that have intellectual curiosity about AML. I can’t be the only one reading articles, like the Cable blog! I need the team to bring things to me, such as things they’ve learned. Curiosity and hunger for AML knowledge is very important regardless of position, whether junior, senior, specialist or manager.

What are the biggest financial crime risks that Nubank faces?

All digital platforms in retail face increases in fraud, schemes using mule accounts, and using instant payments to make fast transactions.

All digital platforms in retail face increases in fraud, schemes using mule accounts, and using instant payments to make fast transactions.

This is a huge challenge for everyone – mule accounts especially, as these are real accounts of real people that they are offering to others. We need a lot of intelligence and resources to identify these schemes. And these schemes can also involve crypto and other payment methods.

The number of unemployed people and the cost of living increased a lot in the pandemic, so the amount of people exposed to mule recruiters is a big issue for the entire market.

Have you found anything particularly useful for mitigating that risk around mule accounts?

We’re working on increasing capabilities to monitor and detect these situations. We’re learning about cases and we’re experimenting with graph analysis and trying to generate alerts based on connections. Across the industry, we need to increase our capabilities to identify these network connections between accounts.

Across the industry, we need to increase our capabilities to identify these network connections between accounts.

It’s also important to improve communication with the market and educate consumers on the risks of people asking to use your account, because it may be a fraud or criminal scheme.

You’ll have lots of financial crime control vendors to help mitigate these risks. Is there one control vendor that stands out as being a game changer for Nearside in terms of risks mitigated or efficiencies gained?

Almost all of our tools are developed internally. We have very good capabilities to deploy, including engineers, data scientists and analysts dedicated to AML. We have a lower demand for external solutions, but we have had good conversations and expect to have some in the future.

When you wake up, what is the first financial crime related thing you think about? What’s your 9am thought?

The thing that is always in my mind – usually the last thing I think about when I go to sleep and the first when I wake up – is maintaining the efficiency of monitoring transactions in numbers that our team can handle. I think about if I did all I can to maintain our efficiency, if parameters are well-calibrated, if processes are flowing, if analysts are motivated, and how our AML analytics function is working to facilitate the analysts’ work.

There are other points of course, such as how regulators will assess our controls or policies and procedures. But because we are in hyper-growth with a constantly increasing amount of clients, we have to always think about the efficiency of the investigative function.

A lot of manual work still exists in the financial crime compliance space. If you could magic away a piece of that work, what would it be and why?

I believe the human abilities of an analyst are needed to judge a case. For enhanced due diligence, I would want magic that would, for all clients, fulfill all KYC points, ask for and receive additional information, and automatically update information. I would never have to worry about outdated client registry information and all EDD would be done on time.