the full picture, this week – 21 June 2019

by | Jun 21, 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 highlight recommendations from a UK commission on legal reform around changes to the country’s system for reporting suspicious transactions.

Elsewhere, we bring the latest on the news that The Treasury Department is changing how it calculates fines related to sanctions violations.

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

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A look at life at encompass

When Netally Castilho joined encompass six years ago, the move didn’t just signal a fresh start when it came to her career, it also gave her the stability she was looking for as she settled into life in Australia after moving from Brazil.

As a Product Owner, Netally has established herself as a key member of the team in the company’s Sydney office and has enjoyed watching it grow and find a place in the industry beyond Australia.

In the first of a new series of content, Netally shares what it has been like transitioning from her previous role as a software developer, how her colleagues are key to getting the most out of her current position, and why encompass is the perfect place for a “problem-solver” like her.

UK commision wants changes on reporting suspicious transactions

A UK commission on legal reform has recommended changes to the country’s system for reporting suspicious transactions, saying substandard information being provided has hindered the ability to spot financial criminals.

The Law Commission, which advises British policy makers on legal reforms, said that regulators should provide additional guidance to banks and other businesses on when to report suspected money laundering activity. The commission also recommends that policy makers should create standardised online reporting forms for companies to use, as well as establishing an advisory board to monitor threats.

“Enforcement agencies are struggling with a significant number of low-quality reports and criminals could be slipping through the net,”

David Ormerod, one of the panel’s five commissioners, said.

Read more.

the encompass view

This development highlights that, now more than ever, providing the correct, key information when it comes to Suspicious Activity Reports (SARs) is key in the fight against financial crime, and particularly money laundering.

The National Crime Agency gives advice on submitting better quality SARs, pointing out that, alongside stating the ‘reason for suspicion’, full and relevant information must be provided based on due diligence carried out.

They highlight areas such as the full legal name of an entity, trading name and details of beneficial ownership as being vital here. However, it is true that performing Know Your Customer (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 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.

the encompass view

This development highlights that, now more than ever, providing the correct, key information when it comes to Suspicious Activity Reports (SARs) is key in the fight against financial crime, and particularly money laundering.

The National Crime Agency gives advice on submitting better quality SARs, pointing out that, alongside stating the ‘reason for suspicion’, full and relevant information must be provided based on due diligence carried out.

They highlight areas such as the full legal name of an entity, trading name and details of beneficial ownership as being vital here. However, it is true that performing Know Your Customer (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 UBO discovery, IDV for individuals and a full audit trail. This means the background info necessary to submit well-written SARs is readily and easily available.

Magalie Pimentel | Head of Marketing, encompass

Treasury Department changes approach to sanctions fines

The Treasury Department is changing how it calculates fines related to sanctions violations, The Wall Street Journal reports.

The department will no longer credit all types of fines paid to other government agencies as part of joint settlements, Andrea Gacki, the director of the Office of Foreign Assets Control, said.

Instead, The Treasury will only give credit for penalties imposed by other federal agencies that relate to “the same pattern of conduct for the same period of time” as the department’s own penalties.

AI key to defending systems

Jointly-developed Artificial Intelligence (AI) systems are key to tackling common security issues, according to a new report.

The Euro Banking Association (EBA)’s Open Banking Working Group outlined the benefits of collaboratively created systems, which could unlock solutions for issues such as fraud prevention and cyber security.

“If you bring together the data sharing opportunities unlocked by Open Banking with the insights and decision-making capabilities enabled by AI-supported data analytics, you end up with a powerful combination that could revolutionise the financial sector,”

said Vincent Brennan, chair of the working group.

He continued: “This could be a real game-changer for many of the collective challenges we are facing as an industry, from security issues to regulatory reporting,” adding:

“There are quite a few hurdles to overcome and joint standards to be agreed on, but since there is a lot to be gained, market players should seriously consider looking into these opportunities.”

Read more

big names back Facebook GlobalCoin project

Facebook has reportedly landed Visa, Mastercard, Paypal and Uber among the founder members of its stablecoin ecosystem.

The social media giant has been moving forward with crypto plans, reportedly hoping to launch its ‘GlobalCoin’ by early next year 2020. As things look like they are starting to take shape, the company has been bringing major financial services players on board for funding to support the development of the project.

According to the Wall Street Journal, the two card schemes, as well as Paypal and Uber, have each invested $10 million into a foundation that will govern the coin.

In return for their support, each firm will get a node on the network – on the face of it to ensure that no-one organisation has complete control over the currency – but also with a useful sideline of opening up unfettered access to user’s transactional data.

Get the latest from Finextra.

news in brief

Latvia is preparing to oust its main financial regulator after passing an Anti-Money Laundering (AML) reform. The new law paves the way for Latvian authorities to remove Peter Putnins from his role as chairman of the country’s main bank regulator, the Financial and Capital Market Commission. Read more.

Two of the Nordics’ biggest banks are reportedly set to significantly reduce the number of staff employed in compliance and financial crime departments and instead turn to robotics and AI. Nordea and Danske Bank say that a recent additional headcount will be temporary and is expected to be sizeably reduced due to the greater use of robotics and AI technology.

The biggest barrier to UK financial institutions embracing digital is regulatory compliance risk, according to a report from FIS which surveyed more than 2,000 C-level and senior executives across buy-side, sell-side, insurance firms and retail banks. Read more.

The UK banking industry is promising to work with local communities to ensure that Brits continue to have free access to cash as the country drifts towards a digital economy. Get the latest from Finextra.

Nearly half of solicitors’ firms that are part of the Solicitors Regulation Authority (SRA) relationship management regime have been referred to the disciplinary process for AML failures.The firms, which have a designated regulator contact, did little better than firms without. Get the latest from Legal Futures.

Jobs in the UK’s fintech sector have grown by 61% in the last year, while demand for skilled workers has seen salaries rise by as much as 25%, according to a new report. Get the latest.

the latest from encompass

new eBook: AML and KYC automation – getting it right
Automation of manual Anti-Money Laundering and Know Your Customer is critical in reducing spiralling costs and workloads. However, financial institutions still struggle to maximise the potential of automation technologies. In this eBook, encompass and OpTechs explore and offer advice on:

  • the increasing criticality of automation technologies regulatory compliance
  • obstacles to the successful implementation of automation
  • strategies for overcoming implementation challenges
  • realising the full benefits of automation technologies for AML and KYC

Download the eBook here

new webinar: how to reduce friction when onboarding new merchants
Merchants demand a quick, effective way of dealing with all aspects of processing payments. A competitive market has meant that frictionless onboarding, setup and customer experience are among the differentiators for new prospective merchants. But what exactly does a good experience look like, and how can technology solutions such as the encompass platform assist, particularly in the onboarding stage, in making it a reality?

  • We delve into the issue, explaining the key indicators in the digital age and how this applies to the payments industry.
  • the changing landscape
  • what defines good customer experience?
  • how technology can make a difference

Register for the webinar 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, event-driven refresh and remediation.

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.