the full picture, this week – 23 August 2019

by | Aug 23, 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, Australia’s financial crime regulator warns more action against the country’s top financial institutions is likely.

Elsewhere, research finds that a majority of finance leaders believe that automation will lead to greater efficiency for their business in the next three years.

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

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Austrac warns of action after being ‘flooded’ with money laundering breaches

the full picture, this week - 16 August 2019 | Austrac  | encompass blogAustralia’s financial crime regulator has warned more action against the country’s top financial institutions is likely, after being “flooded” with reports of potential breaches.

AUSTRAC chief executive Nicole Rose said the high-profile case against the Commonwealth Bank of Australia (CBA) over a mass breach of laws had resulted in a significant increase in “self-disclosure” from the companies the body regulates.

Looking to the near future and what the consequences of this greater spotlight could be, Ms Rose told The Sydney Morning Herald and The Age that the regulator would have a “very busy” year. She said Austrac would use various measures, including legal action and fines, as a means to deal with any firms who are judged to have fallen short when it comes to meeting requirements.

“There’s loads of self-disclosure, which means there’s a lot for us to go through, and we’re going to have a very busy 12 months because there will be actions that come out of it,” Ms Rose explained.

Her comments come as Treasurer Josh Frydenberg told business leaders that they are “on notice” and the “public’s tolerance has been exhausted” following the banking Royal Commission.

the Encompass view

The Royal Commission really put the spotlight on the shortcomings of the banking industry in Australia and it is clear that the ramifications of it are far from over. AUSTRAC are making noises and, although there is a question of whether they have the resources to follow through, this promise of increased scrutiny in itself should be a reminder to organisations that they need to make sure their houses are in order – or face the consequences.

For too long, banking institutions have put too much of their focus on profitability – and their own gain – at the expense of industry integrity and what customers really want, which is a reliable and secure service.

There can be no denying that we are in a climate where regulatory pressure and customer expectations are at an all time high, and this is why it is more important than ever to meet the needs of both regulators and clients. Compliance-related technology may come at an expense but the cost of not satisfying regulations can be, as we are seeing now, much higher.

It is crucial that banks ensure that processes are being carried out properly and consistently and see robust AML compliance as a must, rather than optional.

the Encompass view

The Royal Commission really put the spotlight on the shortcomings of the banking industry in Australia and it is clear that the ramifications of it are far from over. AUSTRAC are making noises and, although there is a question of whether they have the resources to follow through, this promise of increased scrutiny in itself should be a reminder to organisations that they need to make sure their houses are in order – or face the consequences.

For too long, banking institutions have put too much of their focus on profitability – and their own gain – at the expense of industry integrity and what customers really want, which is a reliable and secure service.

There can be no denying that we are in a climate where regulatory pressure and customer expectations are at an all time high, and this is why it is more important than ever to meet the needs of both regulators and clients. Compliance-related technology may come at an expense but the cost of not satisfying regulations can be, as we are seeing now, much higher.

It is crucial that banks ensure that processes are being carried out properly and consistently and see robust AML compliance as a must, rather than optional.

Wayne Johnson | CEO & Co-founder, Encompass

finance leaders predict automation benefits

A majority of finance leaders believe that automation will lead to greater efficiency for their business in the next three years, according to new research.

A survey of 250 senior finance decision-makers by data and analytics firms Dun & Bradstreet, in association with the Chartered Institute of Credit Management (CICM), found that a total of 83 per cent of respondents said they were currently using some form of automation within their team processes and it is improving their efficiency by giving employees more time for value-added tasks.

However, the quality of data is also essential to successful automation, with over 67 per cent of respondents citing reliable data as a key requirement.

Integration with other systems (58 per cent) and time (47 per cent) were also listed as top success factors.

Philip King, chief executive for the CICM, said:

Implementing successful automation is about employing the right technology to complement specific credit management functions and skills. A principal task of a credit manager is to avert the risk of non-payment, and automation can certainly assist in this task, with the understanding that human intervention based on experience and knowledge will always be required within processes.

Brussels plans to revive money laundering blacklist

Brussels plans to revive a blacklist of non-EU countries that are accused of money laundering.

the full picture, this week - 23 August 2019 | Vera Jourova EU Justice Commissioner | encompass blogVera Jourova, the EU’s justice commissioner, told the Financial Times [subscription required] that, in the coming months, the incoming commission would reveal a revamped methodology to identify overseas jurisdictions that are failing to crack down on money laundering risks and terrorist financing.

The fresh push to produce Brussels’ first independent blacklist comes after 27 out of 28 EU member states blocked the publication of an initial draft in February. Governments led by the UK, Germany and France said the list was not drawn up as a result of a “transparent and credible process”.

Ms Jourova commented that the rejection “is still not easy for me to swallow” but insisted the commission would press on with a view to working towards a fresh blacklist using a new methodology that has been devised in cooperation with EU capitals.

news in brief

Payments processing is the engine driving the financial technology venture market, with three mega-transactions accounting for $87 billion in deal value during the first half of 2019. Finextra explores the latest.

The Brazilian government has issued a decree moving the Financial Activities Control Board (Coaf), which monitors nefarious financial activity, such as money laundering, into a new Financial Intelligence Unit under central bank control. The measure gives the central bank president power to appoint officials and to choose the president of the newly created unit. Previously, Coaf was under the Economy Ministry. Reuters has more.

The European Banking Authority (EBA) has published further clarifications to its guidance on Application Programming Interfaces (APIs) under the second Payment Services Directive (PSD2) legislation after a fifth set of issues had been raised by participants of its working group. Read more.

What is the real value of cryptocurrency? That’s the question that’s posed in this feature that focuses on the Australian market, arguing that its place may soon become even clearer.

Singapore fintech employment remains strong with minimal talent shortage being encountered, according to a recent survey. The research, conducted by the Singapore Fintech Association (SFA) and PwC Singapore, states that 42 per cent of fintech firms have more than 30 employees and a further 31 per cent, between 11 and 30 people on their staff.

The Cypriot government dismissed allegations that President Nicos Anastasiades and his law firm held a connection to the so-called Troika Laundromat as “libelous” and “devoid of reality”. The government issued a statement responding to a report by the Organized Crime and Corruption Reporting Project (OCCRP), which linked the President and his firm with the Troika Laundromat, a network of shell companies that operated from 2006 to 2013, moving at least 4.6 billion U.S. dollars and enabling its users to hide assets, evade taxes or launder money. Read more.

in the spotlight Claire Fremder

Claire Fremder | encompass stafCulture, passion and people. For Claire Fremder, these are the things she sees as key to her working life – and where, she believes, Encompass excels.

Having joined the company six years ago, when it was still very much in its infancy, she has watched it grow on a global scale, but it is the fact that the value of a good, positive environment and working together as a team has not diminished that means she still enjoys her job as much as ever.

With a background in training, Claire has always been focused on delivering the best possible service – whether that be internally or to customers – and it is that drive that she instills into her role as Training & Technical Content Manager at Encompass.

Here, she shares how she came on board with the organisation, how it has felt to watch it develop and why, as long as you have colleagues you can work well and laugh with, anything else can be navigated.

Encompass survey gets to the heart of KYC onboarding challenges

the full picture, this week - 16 August 2019 | Charles-André Duport, Business Development Director  | encompass blogGlobal financial services firms have many priorities and have to negotiate a range of challenges as they strive to provide the best service in today’s fast-paced environment.

An increase in regulation is adding a degree of complexity to customer due diligence requirements and it has become clear that teams are struggling to manage ever-changing rules while keeping up with various responsibilities.

In an effort to bring real change to KYC processes that make an impact to those in the industry, Encompass conducted a survey questioning onboarding and compliance professionals about the challenges they come up against in their day-to-day roles.

Find out the results here.

the latest from Encompass

Want to know more about what Encompass is? We are delighted to launch our new explainer video giving you a short snapshot of the challenges our KYC solution meets and how it can benefit your business.

seminar

augmenting customer due diligence

the importance of a connected approach to data and technology

meet the Encompass team

We are hosting a breakfast seminar in collaboration with Dun & Bradstreet and Dow Jones on Thursday 19 September at 1 Lombard Street, London, to explore how connected processes can accelerate progress towards the common objectives of reducing costs while streamlining customer due diligence (CDD). During the seminar, we will discuss top common challenges and priorities in CDD, and the benefits of employing intelligent automation.

Book your place.

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.