Healthcare professionals would play a key role in a new communication system — described in a recently released white paper from the Securities and Exchange Commission — that would be designed to report and curtail suspected financial exploitation of older adults.
Such a system, theoretical at this point, could lead to an improved understanding of the causes of such exploitation and, therefore, the best ways to prevent or treat it, writes author Stephen Deane, the engagement adviser in the SEC’s Office of the Investor Advocate.
A 2017 discussion paper from the Federal Reserve Bank of Philadelphia, Deane said, envisioned a system through which various types of financial institutions that normally do not communicate with one another — such as brokerage firms, investment adviser firms, banks and credit unions — would report suspected elder financial exploitation, diminished financial capacity or cognitive decline to a central database, which would be operated by a neutral entity, possibly a governmental agency.
“The system would have the ability to identify all the financial institutions serving each individual customer and to link them in a virtual network,” Deane wrote. “If any one financial institution submitted a report … the system would distribute the warning to all of the customer’s other financial institutions. Any one of them could submit an inquiry about a customer or suspicious pattern, and that inquiry would be distributed to all the other financial institutions that serve that customer.”
Jason Karlawish, M.D., a professor and geriatrician at the University of Pennsylvania, and others, take this idea a step further, however, Deane said. They imagine a cross-communication system that involves not only financial institutions but also healthcare professionals, such as physicians and social workers, who interact with older adults, especially those with dementia, who are at high risk of exploitation.
“[C]hanges in financial behavior often serve as the first sign of the onset of cognitive decline,” Deane writes. “Thus, financial institutions have invaluable information — and, increasingly, the technology to capture, store and report it — that doctors can use to identify symptoms, detect risks and treat patients. Likewise, doctors can render the medical judgments and diagnoses that could help financial institutions in deciding when and how to intervene in cases of suspected financial exploitation or cognitive decline. And social workers could play an important role in investigating and intervening as appropriate in individual cases of suspected financial exploitation.”
Using predictive analytics, the financial and health history information could be combined to “predict the likelihood that a person could be subject to financial exploitation or other forms of elder abuse in the future, and we could take proactive steps to prevent that from happening,” Deane says.
“Significant” obstacles — laws and regulations, as well as privacy and security concerns — would have to be overcome for such a system to be put in place, he notes. “[I]ntrusions on a person’s privacy must be weighed against the risks of financial exploitation,” he adds.
Two potential solutions to security concerns include using the Treasury Department’s secure Financial Crimes Enforcement Network to manage the system or using emerging distributed ledger technology.
“A permissioned block chain would house a single repository of data, obviating the need for duplication by separate financial institutions, while limiting access to a select group of approved (or ‘permissioned’) institutions,” Deane writes. “And, in theory at least, it would be impossibly difficult for anyone to alter the data.”