01 september 2016
Via several posts ComplianceWise will guide you through the AML/Transaction Monitoring landscape. We will give a complete view of Transaction Monitoring. This complete view contains insights from background to future, from measures to solutions and from rules to behaviour.
The reaction of the public to financial scandals has in part driven the trend for increasing fines, with regulators wanting to be see to be ‘punishing’ those who do not play by the rules. Since 2013, international financial institutions alone have been fined more than $10 billion for failing to meet AML rules for Know Your Customer (KYC), never mind other institutions who also fall under the same scope. As a further illustration of the increase in regulatory enforcement, in 2014, the UK regulator issued £1.5 billion in fines, more than tripling 2013’s total of £474 million.
There is a gathering consensus though that the fines imposed, although huge, are starting to be perceived by larger institutions as nothing more than an additional cost of doing business and are no longer an effective deterrent.
More and more the move is towards making the individual more responsible
Those holding the position of Money Laundering Reporting Officer (MLRO) or Compliance Officer (CO) are often the focal points for regulatory investigations, given that they are tasked with ensuring that AML regulations are adhered to and potential compliance failures are weeded out. Under some country laws, these individuals could face jail time if the controls in place aren’t found to be sufficient, never mind if an actual fraud has been committed. But many in this position often complain of not having the right resources available and, when so many transaction monitoring and KYC activities are manual, no oversight of what’s happening across the company.
It’s a heavy burden for one person or function to have responsibility for what might amount to thousands of transactions, perhaps happening all over the world. But it’s one that individuals tasked with ensuring their organisation remains compliant will increasingly need to bear. So it becomes imperative to find a way to to get a handle on how compliance is monitored.
II’s fair to say that on the whole, people are inherently honest and very few set out to deliberately break the law, or allow others to do so. But it might also be fair to say that up until now, there has been a slight sense of apathy with regard to transaction monitoring and other AML measures. According to PWC’s Global Economic Crime Survey 2016, one in five organisations (22%) had not carried out a single fraud risk assessment in the last 24 months. And in the same survey, more than 25% of financial services firms had not conducted AML/CFT risk assessments across their global footprint, despite one in five experiencing enforcement actions by a regulator.
ComplianceWise thinks compliancy should be easy. We’ve teamed up with bank messaging provider SWIFT to create TM360°, a transaction monitoring system which takes the pain out of AML compliance, and turns data into valuable insights.
Do you have any questions, or would you like to know more? Call Jeroen Cremer:
+31 6 20 11 79 08
Our goal is to make compliancy as easy as possible.
With ComplianceWise you become easily compliant, effective in control, and excellent in strategic management. We help you to control risk, save money, and improve performance by using our IT application; ComplianceWise360˚.
KYC | CDD | AIFMD | FATCA | AML / Transaction Monitoring | Payments