the full picture, this week – 15 November 2019

by | Nov 15, 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 it’s reported that Australia is “set to receive another black mark” for lax Anti-Money Laundering (AML) laws, particularly affecting estate agents.

Elsewhere, The Association for Financial Markets in Europe calls for greater supervisory convergence in crypto-asset regulation.

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

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AML spotlight firmly on Australia’s estate agents

the full picture, this week - 15 November 2019 | Financial Action Task Force | Encompass BlogAustralia is “set to receive another black mark” for lax AML laws, putting renewed pressure on the federal government to force real estate agents to report suspicious sales.

The Financial Action Task Force (FATF) is due to release its latest findings before Christmas and, according to reports, those who have seen an early draft say it will make for uncomfortable reading in Canberra.

The real estate sector has continually been identified as a weak spot in Australia’s AML regime, with financial intelligence agency AUSTRAC estimating $1 billion in suspicious transactions came into the Australian property market from China in the 2016 financial year.

FATF added that, “large amounts are suspected to be laundered out of China into the Australian real estate market”.

The task force’s most recent report said Australia was non-compliant or only partially compliant with 14 of its 40 recommendations.

Latest here.

the Encompass view

Rising residential property prices in Australian cities are contentious. Property website Domain highlighted Sydney’s median house price as up by 4.8 per cent in the September quarter and Melbourne up 4.1 per cent, while speculating that, in 2020, prices in Melbourne could rise by 15 per cent and Sydney could jump by 14 per cent.

Meanwhile, The Australian Bureau of Statistics reports sluggish wage growth – just 2.2% for the 12 months to September for those working in the private sector. Finding themselves unable to buy homes near to their place of work leaves many Australians either spending hours everyday commuting or in search of scarce inner city rental accommodation.

Failure by both major parties while in government to fully enact measures recommended by FATF has allowed billions of dollars from questionable sources to be invested in property.

Many other jurisdictions have demonstrated the value of compelling real estate agents and professionals, including lawyers and accountants, to report suspicious transactions.

Australians will welcome Government action that defends the national economy against the proceeds of international crime and attendant consequences of skewed markets and inflated prices.

the Encompass view

Rising residential property prices in Australian cities are contentious. Property website Domain highlighted Sydney’s median house price as up by 4.8 per cent in the September quarter and Melbourne up 4.1 per cent, while speculating that, in 2020, prices in Melbourne could rise by 15 per cent and Sydney could jump by 14 per cent.

Meanwhile, The Australian Bureau of Statistics reports sluggish wage growth – just 2.2% for the 12 months to September for those working in the private sector. Finding themselves unable to buy homes near to their place of work leaves many Australians either spending hours everyday commuting or in search of scarce inner city rental accommodation.

Failure by both major parties while in government to fully enact measures recommended by FATF has allowed billions of dollars from questionable sources to be invested in property.

Many other jurisdictions have demonstrated the value of compelling real estate agents and professionals, including lawyers and accountants, to report suspicious transactions.

Australians will welcome Government action that defends the national economy against the proceeds of international crime and attendant consequences of skewed markets and inflated prices.

Mike Kearney | Product Marketing Specialist, Encompass

AFME calls for convergence in European crypto-asset regulation

the full picture, this week - 15 November 2019 | Association for Financial Markets in Europe | Encompass blogThe Association for Financial Markets in Europe (AFME) is calling for greater supervisory convergence in crypto-asset regulation on the continent.

As the European Union and regulators seek to formulate a coherent policy on the nascent crypto industry, the AFME has put together its own five recommendations.

James Kemp, MD, head, technology and operations, AFME, said:

There has been a rapid rise in the development of crypto-assets, which could offer significant benefits for wholesale markets. However, to realise those benefits, it is increasingly important that crypto-asset regulation is coordinated at the regional and global level to foster innovation, while promoting financial stability and ensuring a level playing field. This should start with forming a common understanding of the various crypto-asset terms and activities in financial services.

Singapore considers extending fintech funding beyond 2020

the full picture, this week - 15 November 2019 | Ravi Menon, Monetary Authority of Singapore | Encompass blogSingapore’s central bank is poised to extend funding for fintech initiatives, its top official said.

The Monetary Authority of Singapore is likely to announce new funding plans next year, with possible areas including cyber security and artificial intelligence, Managing Director Ravi Menon commented.

The S$225 million ($165 million) program has spurred innovation, attracted new companies and created jobs, he explained.

I think it has been money that is extremely well spent. The most important [thing] is that we now have a vibrant fintech ecosystem.

There are now more than 600 fintech startups in Singapore, up from around 50 in 2015, MAS data shows. Menon continued:

We’ve been creating, outside of the financial sector, about 1,000 fintech jobs each year. This is significant at a time when the need to create jobs is more paramount than ever before.

Get the latest.

news in brief

the full picture, this week | News! | Encompass blogRegtech is the “sleeping giant” of the financial services world, according to the Financial Conduct Authority’s (FCA) director of innovation. Speaking at the CDO Exchange event, Nick Cook said that while it is certainly growing – investments more than doubled between 2017 and 2018 to £3.4 billion – regtech is still an “underserviced” area.

We’ve reached “Phase 1.5” in Australia’s AML and CTF reforms, states this article from Allen & Overy LLP, which examines the Government’s introduction of the Anti-Money Laundering and Counter-Terrorism Financing and Other Legislation Amendment Bill 2019 (Cth) into the House of Representatives last month.

Payment security compliance has declined for the second year in a row, with organisations based in the Americas lagging behind global counterparts, Verizon’s 2019 Payment Security Report (2019 PSR) found.

As financial firms push out of regulatory reform mode, they’re looking at regtech strategies and how to manage regulatory technology more effectively, according to a new report.

The European Union believes the European Central Bank should look into issuing its own cryptocurrency in the vein of the Libra project by Facebook. Finextra has the latest on recommendations here.

Research among fund managers has revealed that 71% believe the number of chief executives, finance directors or very senior executives being fired as a result of poor data storage and management will increase over the next three years. More from FStech here.

The Chinese central bank has handed out hefty fines to financial institutions for money laundering practices as the Government steps up efforts to counter such activities. In targeted crackdowns last year, the People’s Bank of China fined institutions a total of 166 million yuan (US$23.7 million) for money laundering, up 54.55% year on year.

Encompass highly commended at Regulation Asia Awards 2019

Encompass is delighted to have been highly commended in the ‘Best Solutions’ category for KYC Risk Assessment at the Regulation Asia Awards for Excellence 2019.

With the winners announced at a ceremony in Singapore on Wednesday evening, the event marked the second annual Regulation Asia Awards for Excellence. The Awards recognises technology companies, legal and consulting firms and exchanges that have shaped the regulatory landscape in Asia Pacific.

Find out more.

in the spotlight Dr Henry Balani, Head of Solution Consulting

Dr Henry Balani, Head of Solution Consulting | encompass staffIt’s no surprise that Dr Henry Balani’s career to date has seen him immersed in technology and its benefits.

Since his teenage years, he’s had a passion for “understanding how everything works,” so knew early on that it would be something he would devote a lot of his working life to.

With more than two decades’ of experience in financial services, latterly focusing on fighting financial crime, he’s worked for major firms and, through his work around blockchain, sanctions and AML, particularly, has become a respected industry figure and academic.

He shares more of his story – from life before Encompass to his current position and what he gets out of it.

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.

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