In recent years, increased accessibility and affordability of technology made children more comfortable online at an increasingly younger age. They now turn to the internet to access learning games, research school projects, show off their creativity or chat with friends on social media. Frequently, it is done with less oversight from time-strapped parents. But with predators trolling social media platforms nearly undetected, looking for children to groom for the sexually exploitive material they produce — images, videos and even live-streamed abuse — children are at a greater risk than ever before. That is especially the case with a global pandemic keeping many people working in isolation from home and children spending hours online.

Human trafficking is a crime largely driven by monetary gain but the heinous crime of child sexual exploitation often has other motives that may make it difficult to detect, says Stuart Davis, Executive Vice President and Global Head, Financial Crimes Risk Management at Scotiabank, who was instrumental in launching Project Shadow.

Law enforcement is already struggling to stay ahead of the perpetrators who, with the aid of technology, operate from anywhere in the world, hiding behind virtual private networks and the dark web using encryption software.  Davis worries the pandemic may only increase the number of people desperate enough to allow their children to be used in the production of online material for payment. It takes a collective effort to foster a safe online environment for children and help bring the perpetrators to justice.

Project Shadow — a public-private partnership formally announced today by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) — is a new tool in Canada’s toolbox to help financial institutions do their part in detecting this heinous crime.

“Through this new collaboration we are putting the spotlight on a crime that we don’t want in our bank, or in our communities,” says Davis.  However, he recognizes that all the partners — non-governmental organizations, tech firms, financial institutions, government and law enforcement — will need to do their part to mitigate the impact of this crime and help the victims.

Co-led by Scotiabank and the Canadian Centre for Child Protection (C3P), the project has already enabled FINTRAC to provide more than 40 financial intelligence disclosures in relation to online child sexual exploitation to its law enforcement partners. FINTRAC, Canada’s financial intelligence unit, issues operational alerts that provide financial services companies with typologies for detecting money laundering and proceeds of crime and passes information on to the RCMP.  The operational alert for Project Shadow was released today.

The operational alert for Project Shadow lists 40 indicators of money laundering related to online child sexual exploitation. Those include funds being sent to or received from a convicted sex offender, to travel-related expenses that occur before or after money transfers to a jurisdiction of concern for child sexual exploitation, to purchases of online encryption tools, virtual private network (VPNs) services, or other services that allow anonymity.


Through this new collaboration, we are putting the spotlight on a crime that we don’t want in our bank, or in our communities

- Stuart Davis, Executive Vice President and Global Head, Financial Crimes Risk Management at Scotiabank

“While there is some connectivity with traditional human trafficking, the online component lends itself to a larger, hidden community of pedophiles and other abusers of children who post content — sometimes very close family members — but there are also small, private networks of individuals that share material that is absolutely deplorable,” Davis says. 

“There’s been a perception that no one is selling this material anymore and that’s far from the truth. What’s happened is it has become a more complicated issue,” says Lloyd Richardson, Director of IT for the Canadian Centre for Child Protection, which also offers intervention, prevention and education services to the public. “We’re very excited that players like Scotiabank and FINTRAC are getting on board. We think Project Shadow is very important.”

Statistics show that the already large amount of material online has soared as COVID-19 quickly spread around the globe. For example, the Internet Watch Foundation, a UK-based charity that reports and removes online child sex abuse material, recorded a record number of reports of suspected child sexual abuse material to its hotline, with its analysts processing 15,258 reports in September, up 45% from the same period last year. 

C3P, which operates, a national tip line to report child sexual abuse and luring on the internet, says its contribution to the partnership is Project Arachnid, which is essentially a tool that applies a broad set of data to detect where child sexual abuse material is used as a means of offenders profiting from it and remove it from the Internet.

C3P is seeing an even more alarming trend from its tip line: “It’s not an increase in reports related to child sexual abuse material on the internet, but instead a significant increase — about 80% — in reports related to online luring and other offences in that range. As well, through the conversations we see between offenders on the dark web we know there’s definitely a greater risk to children due to some of the unexpected consequences of COVID-19,” Richardson says.

When it comes to success, Davis has a list of results he’d like to see: disruption; better education and training including teaching children through anti-grooming campaigns; improved ability of law enforcement to have more successful prosecutions; and greater corporate responsibility across the board. “It’s not just banks that need to be looking at this,” he says.

It is also important for Scotiabank to use the themes of Project Shadow to make a difference in its global footprint, particularly where it operates in Latin America and the Caribbean. Scotiabank recently joined the WePROTECT Global Alliance, a global public-private partnership dedicated to tackling online child sexual exploitation and abuse that shares the Bank’s interest in helping Latin American and Caribbean communities stop the online sexual abuse of their children. “How child exploitation occurs in Canada may be different than how it is occurring in some of those countries. We need to protect the most vulnerable, our children, everywhere,” Davis says.