A Strategic Partnership to Strengthen the Fight Against Financial Crime

At a time when financial crime poses an unprecedented threat to economic stability, trust in financial institutions and stronger collaboration between academia and the financial sector, has become essential.  

With this in mind, Natixis CIB has established a partnership with EDHEC Business School, with its Criminal Risks Management Chair, Professor Bertrand Monnet.

The partnership reflects a shared commitment to strengthening financial crime compliance and criminal risk management. Through the initiative, Natixis CIB will actively support EDHEC’s academic programs that train hundreds of students each year to detect, analyze, and manage financial crime risks. The objective is twofold: to equip future professionals with cutting-edge knowledge and to bridge academic research with the real-world challenges faced by financial institutions.

At Natixis CIB’s recent conference, “Immersion in the Criminal Economy” the bank celebrated the official launch of the partnership and took the opportunity to dive deeper into the workings of the criminal economy with Professor Monnet.

With a background spanning service in the French army, advisory roles in the private sector, and decades of field research on criminal economies across Mexico, Colombia, Brazil, Nigeria, Italy, Japan, and beyond, Professor Monnet shared his unique, field-based perspective on understanding the economy of financial crime.

His work – conducted in collaboration with investigative media such as Le Monde – focuses on understanding how criminal organizations generate, move, and integrate illicit wealth into the legal economy.

The core of the discussion centered on a fundamental question: how criminal organizations create value and transform illicit proceeds into legal money – and why banks and companies are at the forefront of defending the integrity of the financial system.

Money laundering is not a marginal phenomenon. It is estimated to represent between 2% and 5% of global GDP, making it a systemic risk to financial markets and economic stability. Criminal networks have evolved into highly sophisticated actors, leveraging globalization, technology, and complex corporate structures to move and conceal illicit funds at scale.

According to Professor Monnet, the criminal economy should not be understood solely through the lens of illegal products, but as a business ecosystem driven by people, incentives, and financial logic.

The criminal economy involves a wide range of stakeholders:

• Organized crime groups and mafias
• Drug cartels and human trafficking networks
• Cybercriminals and hackers
• Terrorist organizations and sanctioned actors
• Corrupt public officials
• Legitimate companies and insiders who knowingly or unknowingly facilitate illicit flows

Among these actors, organized crime groups play a central role because of their ability to inject massive amounts of criminal cash into the legal economy.

Professor Monnet emphasized a crucial distinction: organized crime is not defined by internal hierarchy alone, but by its connections to legal entities. Mafias and cartels survive and prosper because they own or control legitimate companies, restaurants, construction firms, transport companies, retail businesses, waste management firms, and financial intermediaries.

These legal structures are essential for:

• Laundering money
• Paying salaries and suppliers
• Accessing banking systems
• Influencing public tenders and political decision-making

In democracies, this economic footprint can translate into social and political influence, reinforcing the resilience of criminal organizations.

The criminal economy operates through three main dynamics:

1. Creation of illicit value
   This includes trafficking in drugs, weapons, people, natural resources, and counterfeit goods—any prohibited product that generates high margins due to illegality.
    
2. Predation on existing value
   Criminals also steal value created by others through data theft, fraud, extortion, corruption, kidnapping, and cybercrime.
    
3. Transformation of illicit proceeds into legal money
   This is where money laundering becomes central. Criminal groups systematically use:

The danger of criminal money lies not only in its volume, but in its extraordinary profitability. These margins allow criminal organizations to:

• Absorb losses
• Corrupt officials and private actors
• Take financial risks that legal companies cannot afford
• Penetrate legitimate markets and outcompete lawful businesses

As a result, criminal capital has a powerful capacity to distort competition, undermine governance, and colonize entire sectors of the economy.

While law enforcement and judicial authorities face constraints in time and resources, banks and companies are uniquely positioned to detect suspicious activity, disrupt laundering schemes, and deter criminals through robust compliance frameworks.

Professor Monnet stressed that enhanced compliance does work. Criminal organizations actively assess banks’ reputations and controls, avoiding institutions known for strong anti–money laundering systems and targeting weaker ones instead. In this sense, compliance acts as a powerful deterrent.