The opinions expressed here are those of the authors. They do not necessarily reflect the views or positions of UK Finance or its members.

A new United Nations (“UN”) report has claimed that transferring the world’s 27.6 million forced-labour victims into the formal economy would boost global GDP by US$ 611 billion. 

UK Anti-Slavery Day, recognised on 18 October every year, offers us an opportunity to reflect as an industry on what more we can do to counter modern slavery, and figures like these will provide us with ample food for thought as we do so. 

The figures in context 

The moral case for countering forced labour is well established, but the UN’s latest conclusions could provide a shift in mind-set towards the financial advantages of consigning slavery to history. 

The potential increase in global GDP set out above represents almost triple the estimated one-time cost of key interventions required to combat forced labour, which the report sets at US$ 212 billion. 

If international policy-makers are slow to recognise this high-level economic argument, the criminals who perpetuate modern slavery certainly seem to be on top of their own calculations. Annual estimated profits from forced labour, for example, reached US$ 236 billion earlier this year.

Discussions within the financial sector 

If these figures show us anything, it is that the slavery economy is alive and well. Despite clear macro arguments for ending it, the day-to-day profits to be gained from perpetuating it remain significant.

The sheer volume of illicit profits flowing from modern slavery puts financial institutions firmly on the front line of the private sector’s efforts to counter it. 

Indeed, a recent KPMG roundtable for financial institutions working against modern slavery found that many are already going above and beyond in this regard. 

As part of their money-laundering obligations, firms are understandably focused on identifying the “proceeds” of modern slavery. However, recent advances in data and technology are providing these institutions with new best practices, allowing them to identify potential victims in other ways, such as by comparing customer contact details with those used by potential traffickers on adult services websites. Recent advances in machine learning are also helping financial institutions to intervene earlier, by identifying and learning patterns of behaviour indicative of potential trafficking or exploitation. 

Our roundtable found that, although many of these practices are being adopted on a firm-by-firm basis, more could be done by the sector to share knowledge and operate on an “industry scale”.

What happens next

One inhibiting factor is perhaps the lack of meaningful change in the UK’s modern slavery laws.

Next year will mark a decade since the Modern Slavery Act was introduced. Its basic reporting requirements have remained largely unchanged since 2015, despite an increase in the number of victims to a new historic high and a promise to strengthen the law in the Queen’s speech of 2022. 

However, recent comments from the Chair of the Business and Trade Committee have led many to believe that new UK modern slavery legislation could be on the horizon. If the law is finally strengthened under the new government, what is currently viewed by some financial institutions as “best practice” could become the new normal and “industry-scale” change could be the result. 

While we wait for these potential developments to materialise in Westminster, the short-term message for the financial sector is clear. This UK Anti-Slavery Day, we are reflecting on a crime which is more prevalent and more lucrative than ever. However, due to the sheer volume of illicit proceeds, recent advances in detection technology, and the clear economic case for freely-chosen work, there has never been a better time for the financial sector to lead the fight against it.