the full picture, this week – 19 July 2019

by | Jul 19, 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 bring the latest as the UK government releases a new three-year plan designed to tackle economic crime.

Elsewhere, research suggests that the number of domestic money transfers made via mobile will exceed 203 billion in 2024.

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

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how automation has impacted on aviation and the role of the pilot

How automation has impacted on aviation and the role of the pilot | encompass blogWhen examining the progression of Intelligent Process Automation (IPA), this technique has developed greatly in recent years, and has now become central to processes across various sectors.

Using advanced robotics and Artificial Intelligence (AI), Encompass fully automates the repetitive activity of accessing, retrieving and analysing data from multiple sources. Our Know Your Customer (KYC) automation mirrors the steps an analyst takes, allowing us to dynamically build accurate and complete KYC files in line with firms’ policies.

But this is just one example of how it can benefit businesses and become embedded into working practices.

How has automation impacted on aviation and the role of the pilot? That’s the question examined here as Encompass’ David Williams, Sales Director, Asia Pacific, looks at the benefits of automation and, specifically, how it applies to the aviation industry.

how IPA can support a robust sanctions compliance programme

The spotlight is firmly on financial crime these days, with an increase in high-profile Anti-Money Laundering (AML) cases in Europe and The Office of Foreign Asset Control (OFAC) having imposed no less than 14 global penalties in the first half of 2019.

The need for strong AML and sanctions compliance controls has never been more urgent. Increased regulatory scrutiny is driving greater focus, which is providing additional challenges for regulated firms as they aim to show they are meeting expectations.

Here, we delve into the subject of sanctions and explore how Intelligent Process Automation (IPA), which focuses on the application of Artificial Intelligence and related new technologies, can support a sanctions compliance programme.

UK’s plan to fight economic crime

the full picture, this week - 19 July 2019 | UK financial crime | encompass blogThe UK has laid out a new three-year plan for tackling economic crime.

The plan, put together by the government, sets out seven priority areas to focus on, including assessing threats of fraud, money laundering and other economic crime facing the country, as well as improving the transparency of ownership.

Part of the agenda includes additional funding to expand capabilities when it comes to fighting financial crime.

“It’s the first time they pulled together a coherent strategy for tackling economic crimes, which covers a lot of aspects and areas,” said Christopher David, a counsel at law firm Wilmer Cutler Pickering Hale and Dorr LLP in London. The plan formalises some policies that were being tested, he added.

Read more on the development from The Wall Street Journal here [subscription required].

the Encompass view

The need to do more to deter criminals and bolster the response to the growing issue of financial crime has never been more evident.

While it is encouraging to see this level of commitment and continued funding from the government, in order for significant progress to be made, it is imperative that AML compliance is seen by firms as best practice, rather than just a ‘check the box’ exercise.

Key to stopping criminals in their tracks is using the latest technology to truly understand a customer, both before onboarding and throughout that relationship.

Using IPA and AI, Encompass gathers and analyses a wealth of information to build a picture of a company or individual in minutes, transforming the KYC process.

The plan also puts the spotlight on the reform of Suspicious Activity Reports (SARs). There has been much said about the need for better quality SARs, with the message being that full and relevant information must be provided based on due diligence carried out.

However, performing KYC can be a complex task, so often customer profiles lack the right information or are out of date, which makes providing this basic information, which is required for effective SARS, difficult and often time-consuming.

This is where technology can prove invaluable as, with the Encompass platform, the full picture of a client is provided quickly and efficiently with automated ultimate beneficial owner (UBO) discovery, IDV for individuals and a full audit trail. This means the background information necessary to submit well-written SARs is readily and easily available.

While there is still a long way to go in tackling fraud and money laundering, especially, this focus on real change, and the highlighting of priorities going forward, is undoubtedly a step in the right direction.

the Encompass view

The need to do more to deter criminals and bolster the response to the growing issue of financial crime has never been more evident.

While it is encouraging to see this level of commitment and continued funding from the government, in order for significant progress to be made, it is imperative that AML compliance is seen by firms as best practice, rather than just a ‘check the box’ exercise.

Key to stopping criminals in their tracks is using the latest technology to truly understand a customer, both before onboarding and throughout that relationship.

Using IPA and AI, Encompass gathers and analyses a wealth of information to build a picture of a company or individual in minutes, transforming the KYC process.

The plan also puts the spotlight on the reform of Suspicious Activity Reports (SARs). There has been much said about the need for better quality SARs, with the message being that full and relevant information must be provided based on due diligence carried out.

However, performing KYC can be a complex task, so often customer profiles lack the right information or are out of date, which makes providing this basic information, which is required for effective SARS, difficult and often time-consuming.

This is where technology can prove invaluable as, with the Encompass platform, the full picture of a client is provided quickly and efficiently with automated ultimate beneficial owner (UBO) discovery, IDV for individuals and a full audit trail. This means the background information necessary to submit well-written SARs is readily and easily available.

While there is still a long way to go in tackling fraud and money laundering, especially, this focus on real change, and the highlighting of priorities going forward, is undoubtedly a step in the right direction.

Wayne Johnson | CEO & Co-founder, Encompass

half of compliance professionals say technology is the future of AML

Almost half of compliance professionals say that using emerging technologies such as AI and advanced analytics could help fight money laundering and financial crime, according to new research.

FSTech reports that a survey of 200 UK AML professionals found that SARs – the way in which businesses detect financial crime – could be improved through the use of technology.

The survey found also found that more than two in five (40.1 per cent) of compliance professionals don’t think that the UK’s current regulatory framework for AML is effective, while 47 per cent said that a lack of information sharing across businesses is the biggest barrier to fighting financial crime.

Information sharing was again highlighted as the solution for improving the SARs process by 35 per cent of respondents, while one in five (19.6 per cent) said that an overall improvement of the SARs regime was the most effective way to combat money laundering.

P2P to push mobile money transfers above 200bn by 2024

The number of domestic money transfers made via mobile will exceed 203 billion in 2024 – up from 130 billion in 2019.

This rise is driven by peer-to-peer (P2P) payments, and will account for 80 per cent of all domestic transfers in 2024, according to Juniper Research, with it being highlighted that, in developed markets, digital wallets have made P2P payments far simpler.

The analysis suggested that the rise in social payments is driving growth in the mobile P2P channel.

Payments via Venmo have a strong social element, which has boosted its popularity with Millennials, while the introduction of the Libra cryptocurrency by Facebook will further leverage social features.

Analysing the findings, research author Nick Maynard said:

Social payments are highly appealing to younger users, as they enable simple and effective digital payments to displace cash.

FStech has more.

news in brief

the full picture, this week - 19 July 2019 | European Securities and Markets Authority | encompass blogThe European Securities and Markets Authority (ESMA) has found regulatory gaps in the licensing regime for crypto-asset related activities, as well as in the governance processes associated with cyber security and cloud outsourcing. Two surveys conducted by ESMA earlier this year gathered evidence from national competent authorities (NCAs) across the EU on the treatment of FinTech firms within their jurisdictions. The primary area where problems were identified – and where FinTechs do not fit within the existing rules – is related to crypto-assets, distributed ledger technology and Initial Coin Offerings. Latest here.

International experts are expected to deliver a poor assessment of Malta’s AML regime, according to reports. Monitoring body Moneyval is likely to give a window of possibly a year to address a series of shortcomings in the country’s efforts before the threat of eventual blacklisting. The Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism has been reviewing Malta’s financial laws and their enforcement since last year. Read more.

the full picture, this week - 19 July 2019 | Andrew Constance, NSW Transport Minister | encompass blogCommuters in Sydney could soon ditch their contactless cards and pay for journeys using facial recognition, predicts the New South Wales transport minister. In a speech reported by IT News, Andrew Constance said that in the “not too distant future” his department will “use facial recognition technology to scan customers who’ve ‘opted in’ and linked their Opal account,” adding: “No more gate barriers – just a smooth journey.”

Kansspelautoriteit (KSA), the Netherlands gambling authority, has published its first guidelines on preventing money laundering and the financing of criminal activities through gambling verticals. Though not legally binding, the provisions and best practices promoted by KSA have been developed to ‘comply with obligations’ established by the Netherlands’ Wwft Prevention Act. Find out more.

Regulators, not lawmakers, should decide whether Facebook needs a banking license to launch new digital coin Libra, according to Chancellor of the Exchequer Philip Hammond. Hammond also insisted that the UK government will “engage” with Libra and won’t try to stop it. It comes as Senate and House committees in the US are due to examine Facebook’s proposed currency and its potential impact. Get the latest here.

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, we are investigating 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.