Embracing KYC transformation
Download the whitepaper

Why harnessing the power of automation is key to successful UBO discovery

By St John Potter | June 2nd 2020
Why harnessing the power of automation is key to successful UBO discovery | Encompass blog

Less than 10% of companies currently relying on manual processes are confident in the methods they use to discover Ultimate Beneficial Owners (UBOs), according to research.

With criminals taking advantage of complex corporate structures to clean their dirty money, knowing the people behind a corporate customer is a crucial element of a robust Know Your Customer (KYC) compliance programme.

The research

However, in data collated by Politico, which shows how compliance professionals feel their measures stack up in a range of areas including sanctions screening, dealing with financial crime risk and client data verification, the identification and verification of UBOs was a key topic.

Comparing those organizations that use technology to those that don’t, the figures illustrated a lack of conviction, with 15% of those who have implemented solutions and just 7% of those working manually saying they are ‘usually successful’ when it comes to UBO checks.

The research itself formed part of a special report, titled Europe’s dirty (money) secret, which looked at the continent’s efforts in tackling financial crime.

A number of interesting headlines were brought out, including:

  • less than 10% of financial control leaders believe that their institution has enough information to understand the most serious financial crimes in their jurisdiction.
  • the UN’s Office on Drugs and Crime estimates global money laundering to correspond to 2 to 5% of global GDP.
  • only 10% of suspicious transaction reports received by national financial intelligence units in the EU are further investigated after collection, according to a 2017 report by Europol. The figure is unchanged since 2006.

The benefits of automation

A key takeaway is of course the need to improve on UBO discovery, with those performing tasks manually feeling less able to prove that they know the people behind their customers.

Gathering and analyzing the information needed to identify UBOs and understand the ownership structure can be costly – both in terms of time and manpower. Prone to human error, operating in this way can also leave firms exposed to unknown risks.

This is where the power of automation can be realised, as it negates the need for what has traditionally been a lengthy and complicated exercise.

Encompass streamlines the complex process of gathering and analyzing data from multiple sources to unwrap a corporate customer’s organizational structure, as well as determining a customer’s UBOs. A task that previously could take many weeks in complex cases can now be performed in a matter of minutes, giving the full picture in a fast and efficient manner.

This means that those involved can be assured that they have all the information required at their fingertips, going beyond simple layers of ownership to empower them to make decisions.

Using Intelligent Process Automation (IPA), Encompass retrieves and analyzes company information from an organization’s trusted sources, and according to specific KYC policy requirements. This information, along with original documents, is saved to a digital profile, minimizing room for human error and allowing analysts to dedicate their time to the most pressing and intricate investigative work

By utilizing automation in this way, organizations also significantly reduce the time taken to onboard new customers and conduct event-driven refresh and remediation. This means that clients will also benefit from a smoother experience, which, in turn, will boost retention rates and, ultimately, revenue.

ebook

Ultimate beneficial ownership

Exploring ultimate beneficial ownership and the role it plays in laundering illicit funds

 
Author: St John Potter

A senior member of our Delivery Services Group, St John is a highly experienced solution specialist with over two decades’ working in the tier one banking sector including, JP Morgan, HSBC and Lloyds Banking Group. He has overseen strategy and execution of complex digital transformation programmes including client and product onboarding and servicing.

LinkedIn Profile | St John Potter

You also might be interested in

west
east