Over the past decade, the scope and complexity of performing adequate compliance has been increasing, resulting in challenges for financial institutions, banks and financial services providers to adapt to this new regulatory environment. PriceWaterCoopers (PwC) released its Global Economic Crime Survey 2016 exposing the top issues that companies need to tackle:
Fast-paced regulatory changes create the necessity to use technology in order to abide by the AML regulations from different jurisdictions. Below we outline how Equiniti KYC Solutions, as one of the most experienced Know Your Customer (KYC) services and technology providers, copes with these challenges and addresses them while meeting the clients’ requirements through high tech solutions and deep AML regulatory knowledge.
KYC services providers should not neglect the major impact technology can have on their businesses especially in a world lacking legal harmonization of AML framework. At the European level for instance, certain degree of harmonization has been achieved through the set of regulations established by the European Commission. EU Commission Directive (EU) 2015/849 presents a major step forward for the prevention of money laundering and terrorist financing in the EU. However, in the rest of the world, national legislation prevails. Recent terrorist attacks and disclosures regarding certain deficiencies in the worldwide financial system - such as the Panama Papers scandal - have demonstrated that further steps to move towards a consistent global framework are needed. Equiniti KYC Solutions’ proprietary web-based system, KYCNET, is built on the latest technology, which allows it to be user friendly and easily customized depending on our clients’ ongoing and changing requirements.
Additionally, regulatory fines and the subsequent remediation steps taken over time cause significant financial losses for entities. According to new figures from WealthInsight, global spending on AML compliance is set to grow to more than $8 billion by 2017 (a compounded annual growth rate of almost 9%) . Therefore, it is crucial to implement preventive tools that can keep up with the changing regulatory landscape rather than amend internal systems set up pursuant to sanctions imposed for not complying with international regulations. In this regard, KYCNET is a cost-
effective system, with automatic risk assessment option to diminish the opportunity for human manipulation of the risk level ensuring appropriate KYC due diligence on customers. KYCNET is a complete solution which integrates alerts, risk findings, evidence, identification, authentication and verification of documents, backed by a strong database and multi-tenant architecture.
Furthermore, in a globalised context and multinational environment, the risk based approach has increased in complexity. Criminals are devising more creative ways for laundering money that the law has not foreseen, as 1 out of 3 entities experiences economic cybercrime.
One of the top priorities for regulated institutions is to evaluate risk in a fast and cost efficient way. As a KYC specialist, it is required to have hands-on understanding of the jurisdictional environment the clients must abide to. At Equiniti KYC Solutions, our staff is composed of highly qualified professionals of more than 40 nationalities. The diverse professional and educational background of our staff members coupled with internal advanced training and quality assurance team ensures that appropriate KYC is performed. The sole focus of Equiniti KYC Solutions is to provide top quality AML compliance, and our smart technology and highly skilled staff ensure that every detail for every review is analysed and verified.
In order to respond to this fast-paced industry and changing regulations, organisations need to combine the implementation of smart technologies and highly educated people with matching morals and ethics. Since global money laundering transactions equal approximately 2% to 5% of the global GDP , the way forward for institutions is to take initiatives to implement preventative measures rather than to continue relying on
the corrective fines and sanctions imposed by regulators. As PWC puts it: ‘a sophisticated global compliance programme must be finely tuned to the specific realities on the ground’ and this is exactly what Equiniti KYC Solutions accomplishes.
1. Global Economic Crime Survey 2016, conducted by Price Waterhouse Coopers http://www.pwc.com/gx/en/economic-crime- survey/pdf/GlobalEconomicCrimeSurvey2016.pdf
2. DIRECTIVE (EU) 2015/849 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the
Council and Commission Directive 2006/70/EC
3. https://www.thomsonreuters.com/en/press-releases/2016/may thomson-reuters-2016-know-your- customer-surveys.html
4. Global Economic Crime Survey 2016, conducted by Price Waterhouse Coopers https://www.pwc.com/gx/en/economic-crime- survey/pdf/GlobalEconomicCrimeSurvey2016.pdf