the full picture, this week – 08 November 2019

by | Nov 8, 2019 | All Blog Posts, the full picture this week, Featured

Let us put you in the picture this week, as we round-up and react to the latest news from the financial crime compliance and technology sectors.

This time, we bring the latest as The Treasury Select Committee calls for harsher regulatory action on financial firms yet to introduce Anti-Money Laundering (AML) and anti-fraud measures to be implemented next year.

Elsewhere, the financial world will be reliant on big data within five years – that’s according to new research.

These issues, and more from around the globe, give us plenty to dive into for your Full Picture, This Week…

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MPs urge tougher action on economic crime

The Treasury Select Committee has called for harsher regulatory action on financial firms that are yet to introduce AML and anti-fraud measures due to be implemented by March 2020.

In a unanimously-agreed report, MPs called on regulators to take action on firms that are not ready to roll out the Confirmation of Payee system by the March deadline.

The Confirmation of Payee process cross references payee names with account numbers and sort codes to ensure that payments are reaching the intended recipient.

the full picture, this week - 08 November 2019 | Rushanara Ali | Encompass blogThe report also cited the need for further measures to stem rising levels fraud, which saw £600 million stolen from consumers in the first half of this year.

The intervention comes after it was reported that the EU is to consider the establishment of a central authority with “direct powers” to tackle money laundering after a series of high-profile scandals underlined the bloc’s weakness in preventing dirty money flowing through its banks.

Rushanara Ali, the committee’s lead member on the inquiry, said:

With scams getting ever-more sophisticated, it’s clear that economic crime is a serious and growing problem in the UK. To ensure that consumers are protected, it should now be compulsory for financial firms to reimburse money lost to victims of Authorised Push Payment fraud, and they should consider doing so retrospectively… The government and regulators should take on board all of the committee’s recommendations to enhance consumer protection in the face of this harmful tide of criminal activity.

the Encompass view

What this development shows is that regulatory compliance is being taken increasingly seriously, and firms must be aware of their obligations, or risk facing punishments that will only heighten as the industry evolves.

As we have seen with a number of high-profile money laundering cases in recent years, this is an issue that is coming to the fore more often and having greater implications for those involved, so it is vital that organisations have their houses in order.

Reports that the EU is to consider setting up a central authority only underlines how pertinent money laundering is becoming within society, and the increasing efforts of key bodies to tackle it.

At Encompass, we see first-hand how the development of technology, and particularly automation, has impacted throughout the space.

From cost and time savings to improving client experience, the tool is crucial to AML compliance and protecting reputations, and it is something that will only become more evident as we move forward.

the Encompass view

What this development shows is that regulatory compliance is being taken increasingly seriously, and firms must be aware of their obligations, or risk facing punishments that will only heighten as the industry evolves.

As we have seen with a number of high-profile money laundering cases in recent years, this is an issue that is coming to the fore more often and having greater implications for those involved, so it is vital that organisations have their houses in order.

Reports that the EU is to consider setting up a central authority only underlines how pertinent money laundering is becoming within society, and the increasing efforts of key bodies to tackle it.

At Encompass, we see first-hand how the development of technology, and particularly automation, has impacted throughout the space.

From cost and time savings to improving client experience, the tool is crucial to AML compliance and protecting reputations, and it is something that will only become more evident as we move forward.

Wayne Johnson | CEO & Co-founder, Encompass

financial world will be reliant on big data within five years

Almost two-thirds (64%) of CFOs expect that within the next five years the financial world will no longer be able to operate without big data, however 13% believe that this is already the case.

Currently, financial directors are using big data to make well-informed decisions (54%), to form analysis (41%) and to analyse large, unstructured databases (29%), although almost one-fifth of CFOs (18%) do not utilise it at all, according to the results of the 2019 FinTech Barometer, an annual survey conducted by order-to-cash specialist Onguard.

More than a third of respondents (38%) expect big data to have a significant impact within the financial sector, particularly on aspects such as job opportunities, with 36% seeing it as a threat to employment.

Trends such as robotisation and Artificial Intelligence (AI) are also on the radar of financial directors, with 42% of CFOs expecting AI to have a major impact on employment.

banks have lost a quarter of the payments franchise to new players

the full picture, this week - 08 November 2019 | Basel | Encompass blogNon-banks now account for a quarter of the institutions offering payment services or payment instruments – that’s up from 14% in only six years, according to statistics from the Bank for International Settlements.

The data comes from the Basel-based BIS’s annual Red Book report on payments and financial infrastructures and it reveals increasing incursions by non-bank competitors into both retail and wholesale payments.

The report states:

The traditional bank-based ecosystem is being disrupted from below by fintechs and from above by well established big techs. When asked which financial products and services are most affected by technological developments and competition, banks often rank payments the highest – both today and over the next five years.

Non-bank providers now account for 10% of direct participants in RTGS systems in jurisdictions covered by the BIS-convened Committee on Payments and Market Infrastructures. In contrast, they accounted for only four per cent in 2012.

The payments landscape continues to morph, says the BIS:

Driven by innovation and shifts in consumer preferences, new systems, new methods and new players are shaping the future of payments.

Get the latest.

news in brief

the full picture, this week | News! | Encompass blogExisting securities rules could apply to digital currency initiatives, like Facebook’s Libra, to help realise its benefits, according to the International Organization of Securities Commissions (IOSCO). More here.

Microservices and, more specifically, how to redefine the ‘possible’ in digital transformation, forms the basis of this article on bobsguide.com.

In the legal sector, the Compliance Officers Conference 2019 shone a light on regulatory expectations. Find out what was discussed in more detail here.

The Shanghai division of the PBOC (People’s Bank of China) has introduced 40 new measures aimed at promoting fintech development in the city, as detailed by Regulation Asia.

The Islamic Republic’s reputation is in no way smeared by money laundering, Iran’s Foreign Minister, Mohammad Javad Zarif, said in a statement.

The Association for Financial Markets in Europe (AFME) has called for the capital markets industry to realise the full potential of public cloud. In a new paper, the industry body set out 14 recommendations to increase the transparency and collaboration required to build confidence, trust and capability in it.

in the spotlight Ashton Montgomery-Norris, Customer Success Specialist

Ashton Montgomery-Norris | encompass staffAt Encompass, we strive to get to the heart of our customers’ priorities and how they work – and someone who knows just how important this is is Ashton Montgomery-Norris.

Having been involved in customer service for several years, Ashton is passionate about clients getting the most out of a product and being part of their journey to success.

Here, he tells us what led to him joining Encompass as a Customer Success Specialist, and what it is about the company that has made it the ideal place to progress as a key part of a team…

meet the Encompass team

The Encompass team will be out and about across the globe, participating in key industry events.

Fit 4 Legal Tech | Wed 27 November | WeSpace, Zurich

The Fit4LegalTech series gives you an innovative way to learn how others extract value through the use of legal tech. Encompass will be attending the conference and hope to see you there.

View all our upcoming events here.

The world of Know Your Customer (KYC), compliance and financial crime never sleeps, and if your challenges are keeping you up at night let us help. Encompass intelligently automates information and news discovery for KYC requirements for onboarding ongoing monitoring.

Driven by your internal policies, our platform automatically constructs corporate ownership structures, discovers beneficial owners, and in minutes screens all relevant entities and persons for regulatory, reputational and financial risk.