Elsewhere, Brussels has more questions for Facebook over potential financial risks posed by its Libra coin project.

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

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Amy Bell’s 10 top tips for AML compliance

Legal expert Amy Bell specialises in helping law firms get risk and compliance right.

Here, she shares her top tips for executing Anti-Money Laundering (AML) compliance programmes for those working in the legal sector, exploring subjects including risk assessments, source of funds and wealth, and ID&V…

manual processing costs financial services £10m a year

Financial services firms are losing millions of pounds due to manual processing of agreements.

According to 4C research, the average loss is more than £10 million a year, while 31 per cent of companies lose £1 million or more a year.

The digital consultancy interviewed 100 finance professionals, at manager level and above, finding that a lack of automation is resulting in wasted resources. Businesses are spending an average of 78 hours per month processing agreements, with 13 per cent spending more than 200 hours each month.

Jani Van Hecke, head of the contract lifecycle management practice at 4C, said that businesses often neglect the non-customer-facing part of the business, “so it’s no surprise that the manual processing of agreements is resulting in lost money and time for financial services companies.”

Only 11 per cent of financial services firms have a fully automated process for managing their agreements, while just seven per cent of agreements have access restricted to the named owners.

The vast majority (93 per cent) have experienced issues as a result of non-automation and 47 per cent have suffered financial losses as a consequence.

Issues cited include human error, such as incorrect document disposal (56 per cent) and delays to projects (49 per cent). A similar proportion (47 per cent) have suffered financial losses as a result of manual processes, while a further 43 per cent are seeing agreement crossover, with people signing different versions of the same document.

FSTech has more.

the Encompass view

What this research underlines is just how important automation has become to firms within the financial services space – in a number of ways and throughout companies.

Manual processes in relation to agreements are hampering organizations, leaving organizations exposed to risk, spiralling costs and the potential loss of business. In an industry that is increasingly competitive, a well-managed and executed process is a must.

The findings also show that a considerable number of respondents have experienced financial losses as a result of not embracing the technology.

What we know is that this is not only the case when dealing with agreements within financial services – it also applies to the processing of documents needed for AML compliance.

Across the board, from cost and time savings to improving client experience, automation is vital to continuing relationships and brand reputation, as well as making it easier to ensure compliance.

As the industry moves forward, it is something that must be taken more seriously than ever before – and used to its full potential – if organizations want to get the vast benefits and avoid these negative business consequences.

the Encompass view

What this research underlines is just how important automation has become to firms within the financial services space – in a number of ways and throughout companies.

Manual processes in relation to agreements are hampering organizations, leaving organizations exposed to risk, spiralling costs and the potential loss of business. In an industry that is increasingly competitive, a well-managed and executed process is a must.

The findings also show that a considerable number of respondents have experienced financial losses as a result of not embracing the technology.

What we know is that this is not only the case when dealing with agreements within financial services – it also applies to the processing of documents needed for AML compliance.

Across the board, from cost and time savings to improving client experience, automation is vital to continuing relationships and brand reputation, as well as making it easier to ensure compliance.

As the industry moves forward, it is something that must be taken more seriously than ever before – and used to its full potential – if organizations want to get the vast benefits and avoid these negative business consequences.

Wayne Johnson | CEO & Co-founder, Encompass

more questions over Facebook’s Libra

Brussels is questioning Facebook over potential financial risks posed by its Libra coin project as the EU prepares to overhaul regulation of digital currencies.

The European Commission has asked Facebook and the Libra Association to respond to a series of questions on financial stability, money laundering and data privacy risks that could be posed by the project.

The commission’s questionnaire, seen by the Financial Times [subscription required], is part of a drive by Valdis Dombrovskis, the EU’s financial services commissioner, to determine how projects such as Libra should be regulated in the EU, if fresh legislation is needed and even whether Facebook’s coin proposal should be allowed to operate in the bloc.

It comes at a time of mounting official pressure on Libra to explain to regulators how it plans to set up a digital currency that could be used by 2.4 billion Facebook users.

regulators ‘must tread carefully with AI’

The use of artificial intelligence (AI) needs careful nurturing if it is to deliver on its potential for financial services firms, according to Accenture and the International Regulatory Strategy Group (IRSG).

The analysis of AI in financial services featured a recommendation that regulators would have to allow businesses to innovate responsibly, while also retaining public trust.

Key challenges identified included:

• the lack of a clear definition of what constitutes AI and therefore, how it should be regulated
• an expectation gap, both from customers and from industry practitioners, between what is expected of AI, and what AI can actually deliver in practice
• a shortage of tech talent needed to develop and implement AI technologies at scale across the industry

Mark Hoban, chair of the IRSG and a former Treasury minister, said:

Despite fears of automation-driven unemployment, the rise of AI is creating new roles and opportunities across the industry as well as demonstrable consumer benefits.

 

The real challenge is how we can stay at the forefront of this new technological wave while maintaining the highest standards of regulation and public trust – this is a technical revolution which is very much still in its infancy.

Read more.

news in brief

The three European Supervisory Authorities (EBA, EIOPA and ESMA) have published their second joint Opinion on the risks of money laundering and terrorist financing that are affecting the EU’s financial sector. Check out the findings.

A top executive of a data analytics company has been hired as the UK government’s new fintech envoy for Northern Ireland. Andrew Jenkins has been appointed by the Economic Secretary to the Treasury, John Glen, to lead Northern Ireland’s promotion of its growing fintech sector. Finextra has the latest.

Money laundering suspicions continue to hover around five Kuwait-based companies related to US Army tenders. More details are in this article.

The British Standards Institution (BSI) has published a code of practice for digital identification and Strong Customer Authentication (SCA). The new specification – PAS 499:2019 – is for organizations with regulatory requirements under the second Payment Services Directive (PSD2), as well as related regulations. Find out more.

The Fiji Institute of Accountants (FIA) has said that the issue of money laundering and cyber crime activities remains a concern. While presenting before the Standing Committee on Economic Affairs, FIA President Nitesh Lal told that work is in progress to create more awareness among their members.

More than 100 fintech firms have applied to take part in the UK’s Open Up 2020 Challenge, which will see them compete to unlock the power of open banking and bag a share of a £1.5 million prize fund. Get the latest.

payment providers and fintechs feel increasing regulation in Australia

Last month, news broke that AUSTRAC, the Australian banking and financial services regulator, ordered the appointment of an external auditor to examine ongoing concerns in regard to PayPal Australia’s compliance with the Anti-Money Laundering and Counter-Terrorism Financing 2006 Act (the AML/CTF Act)”.

What do AUSTRAC’s actions tell us about the space in Australia? Find out in this blog by our Business Development Manager, Gary Clarke.

meet the Encompass team

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

Money 20/20 | Sun 27 – Wed 30 October | The Venetian, Las Vegas

Money20/20 is the doorway to the epicenter of the payments, banking, fintech and financial services ecosystem. This global event brings together visionaries and innovators from across the spectrum who are inventing new ways to spend, manage, save, borrow, share and protect money. We will be attending Money 20/20 this coming October and would love to see you there.

View all our upcoming events here.