the full picture, this week – 12 July 2019

by | Jul 12, 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 week, we focus on the news that top Nordic banks are moving forward with plans to set up a joint platform for handling Know Your Customer (KYC) data.

Elsewhere, more than half of payments leaders admit they are losing money due to issues with payments gateways.

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

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FCA AML report shows there is a long way to go

The Financial Conduct Authority (FCA) published its Anti-Money Laundering (AML) Annual Report 2018/2019 this week, and it underlines that firms still have some way to go in their efforts.

Although there has been progress, there are still improvements to be made in key areas.

Encompass‘ Dr. Henry Balani said:

The overriding message is that firms must remain vigilant and not become complacent where compliance is concerned – it is no longer just an option.

Read his reaction in full.

key factors for the successful implementation of automation

the full picture, this week – 12 July 2019 | key factors in successful implementation of KYC automation | encompass blogSince the financial crisis more than a decade ago, there has been a huge focus on KYC and AML from global regulators, resulting in a stream of regulation as well as more than $23 billion in fines relating to non-compliance.

While high on the agenda for all financial institutions, there remains pressure to reduce the burden of compliance. At the same time, there is also a need to improve the quality and speed of onboarding to support better customer experience and revenue generation.

This is where technology comes in – but how is it best utilised?

In this blog, Encompass’ Nick Ford and Matthew Neill, from consultancy OpTechs, examine key factors for the successful implementation of automation.

ebook

maximising the benefits of KYC automation

customer success at Encompass

the full picture, this week – 12 July 2019 | Customer Success at Encompass | encompass blog‘We’re here to make you successful, whenever and wherever you need us’ – that’s the message from the Encompass Customer Success team.

Committed to understanding needs, they strive to turn the goals of our customers into a reality by working with them to get to the heart of the issues that really matter.

With every customer receiving the assistance of a dedicated specialist as they implement our solution, this section of the company, led by Head of Customer Success Scott Goodsir-Smyth, is crucial to our continued growth and to those our product serves.

But, what exactly is it like working as part of such a busy and varied team? Customer Support Specialist Tom Artingstall and Customer Success Specialist Steven Spark give some insight into their roles and life at Encompass.

Nordic banks’ go-ahead for shared KYC platform

A group comprising of six top Nordic banks is moving forward with plans to set up a joint platform for handling KYC data.

Having secured European Commission approval for the platform, Danske Bank, DNB Bank, Nordea, SEB, Svenska Handelsbanken and Swedbank have set up a joint venture company to build the platform.

The new company is autonomous and will initially offer KYC services to the market that focus on large and medium-sized companies based in the Nordic region.

Fredrik Millde, interim CEO, Nordic KYC utility, says:

The collaboration between all banks has been both effective and successful. Together, we have in a short period of time worked on a Nordic KYC utility standard for compliant KYC information and explored alternatives for a future digital solution.

Read more.

the Encompass view

If designed and executed properly, the potential benefits of a shared infrastructure are clear – not least when it comes to raising KYC compliance standards across the financial industry as a whole.

A Utility should provide benefits to all of its stakeholders – from the participating banks and their customers to regulatory authorities.

For banks, the Utility should streamline KYC and customer onboarding, reduce costs and enhance KYC standards and auditability. Meanwhile, their end customers should benefit from a smoother customer onboarding journey and reduced friction.

From the perspective of the regulators, the primary objective should be to raise confidence that banks are working to the highest KYC standards to more effectively combat financial crime, money laundering and terrorist financing.

Given the amount of time and money financial firms currently spend on KYC and customer onboarding, it isn’t surprising that the concept is gaining such traction.

While there are certainly questions that remain to be answered, the arguments in favour are certainly persuasive.

It is an encouraging move by the main Nordic banks to up the ante in the fight against financial crime, and rebuild their standing in the eyes of both regulators and customers.

the Encompass view

If designed and executed properly, the potential benefits of a shared infrastructure are clear – not least when it comes to raising KYC compliance standards across the financial industry as a whole.

A Utility should provide benefits to all of its stakeholders – from the participating banks and their customers to regulatory authorities.

For banks, the Utility should streamline KYC and customer onboarding, reduce costs and enhance KYC standards and auditability. Meanwhile, their end customers should benefit from a smoother customer onboarding journey and reduced friction.

From the perspective of the regulators, the primary objective should be to raise confidence that banks are working to the highest KYC standards to more effectively combat financial crime, money laundering and terrorist financing.

Given the amount of time and money financial firms currently spend on KYC and customer onboarding, it isn’t surprising that the concept is gaining such traction.

While there are certainly questions that remain to be answered, the arguments in favour are certainly persuasive.

It is an encouraging move by the main Nordic banks to up the ante in the fight against financial crime, and rebuild their standing in the eyes of both regulators and customers.

Nick Ford | Head of Alliances, Encompass

payments leaders “losing money due to lack of data and skills

the full picture, this week – 12 July 2019 | payments losing money, skills | encompass blogMore than half of payments leaders admit they are losing money due to issues with their payments gateways.

A global study of more than 500 online payment professionals by electronic payments provider emerchantpay also found that a lack of data and insight, analytical skills and resources had resulted in 65 per cent reporting that they need to improve payments performance “as a matter of urgency.”

Just 39 per cent of payments leaders feel that the wider business fully recognises the value of optimising payments performance, the study found, and only 35 per cent believe that business stakeholders fully understand the benefits of an agile payment infrastructure.

Fraudulent and cybercrime in payments is also a rising concern, with only 24 per cent of respondents “fully satisfied” in their ability to analyse fraud data to set better rules and only 26 per cent of fully satisfied with their current ability to monitor fraud in real-time.

Other barriers to progress highlighted include the burden of regulation and compliance obligations, lack of budget or cost issues, outdated technology and tools and finding appropriate partners or vendors.

Owen Tustin, vice president of relationship management at emerchantpay, reflected on what the research findings mean, saying:

Payments leaders need to ensure they have access to the data they need across all areas of their payments infrastructure and the dedicated resources and skills to translate this data into meaningful and actionable insight.

FStech has more.

majority of UK cryptocurrency businesses forced to bank overseas

Almost three quarters of crypto businesses are forced to bank overseas, largely due to the difficulties of opening a bank account in the UK.

The research, which polled cryptoasset firms, was conducted by CryptoUK, the self-regulatory trade body for the sector in the UK. It found that 73% of surveyed crypto firms active in the UK said they had opened a bank account in another jurisdiction.

As well as that, almost 70% said they had moved or considered moving operations out of the UK due to the inability to open a UK bank account.

CryptoUK is calling on the Government and regulators to look to jurisdictions such as France, which has recently introduced legislation that supports crypto firms in getting access to banking services if they opt in to be regulated, and make changes.

Reacting to the findings, Iqbal V. Gandham, Chair of CryptoUK, said:

Many in the crypto sector, including CryptoUK’s members, want to call the UK home, invest in innovation and grow their operations here. But as our survey shows the often-impossible task of opening a bank account is forcing more companies to turn to other jurisdictions, which are often riskier and offer less certainty to companies.

Get the latest.

news in brief

Lenders in the DR Congo will move to tackle money laundering at the request of the United States. The US Treasury and State Department had asked Congolese banks to put measures in place against sanctions-busting, money laundering, the financing of terrorism, and corruption, the Congolese Association of Banks (ACB) said. Read more.

Key trends across the Asia-Pacific region when it comes to money laundering have been identified in a new report. In its 2018 Yearly Typologies Report, the Asia/Pacific Group on Money Laundering (APG) provides some insight into how it identifies typologies, and highlights key trends in money laundering and terrorism financing.

Banks are preparing for their industry’s digital evolution by building their own standalone operations, with more than a third (36 per cent) looking at a greenfield digital bank, according to a survey by the Economist Intelligence Unit (EIU). FStech has more.

The UK’s financial services watchdog is proposing a ban on cryptocurrency derivatives for retail investors in order to prevent them from incurring large losses in financial instruments they do not understand. Get the latest from Finextra.

Only 15 per cent of money-laundering cases end up before Serbian courts, with minor sentences often handed down to those who are found to be guilty. Read more findings from analysis of the country’s measures.

survey

current KYC challenges in customer due diligence

the latest from Encompass

We want to hear from you! We have had many discussions with global financial services firms about their priorities and the challenges they are facing in 2019.

One theme that is coming through time and time again is the increase in regulation adding complexity to customer due diligence requirements, and how teams are struggling to manage ever-changing rules while juggling a range of responsibilities.

As a result, Encompass has teamed up with leading commercial data provider Dun & Bradstreet to investigate common industry themes to establish a way that we can work together to bring real change in KYC processes. Make sure your voice is heard by taking the survey. You have until the end of July to share your views.

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.