the full picture, this week – 26 July 2019

by | Jul 26, 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 highlight research that shows the UK fintech sector is attracting investment at a record rate.

Elsewhere, there’s news that many of the early evangelists for blockchain feel that production-ready deployment still remains a distant goal, according to new research.

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

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enforcement date for RICS statement approaches – what you need to know

Royal Institute of Chartered Surveyors | encompass blogFirms across the property sector are gearing up for change as the implementation date of the Royal Institution of Chartered Surveyors (RICS)’s global professional statement around tackling money laundering and other areas of financial crime nears.

The statement, “Countering bribery and corruption, money laundering and terrorist financing,” was launched earlier this year in an effort to stamp out problems within a sector that is known to face issues.

RICS has been working with industry and Government to address these and see the statement, which will become mandatory on 1 September 2019, as vital.

So, what changes do firms need to make ahead of that date and how can the automation capabilities offered by Encompass help them to ensure they are meeting their obligations in the most effective and robust way?

Business Development Manager, Alex Street, explores the key themes in this article.

in the spotlight Nick Ford

Ask Nick Ford what attracted him to Encompass and he will say it was the chance to be at the forefront of a part of the industry that was growing in demand and relevance.

Since joining, Nick has become a key part of the management team and our growth.

As Head of Alliances, he is at the heart of partner relations – working with existing partners and stakeholders and bringing new ones onboard, always working to bring the best solution to the market.

Here, he describes Encompass journey so far, explaining what his position involves day-to-day and what motivates him to keep moving forward.

investment in UK fintech on the up

the full picture, this week - 26 July 2019 | Greater Manchester fintech hub | encompass blogThe UK fintech sector is attracting investment at a record rate – despite the current political uncertainty in the lead-up to Brexit.

As $2.9bn was raised in the first six months of 2019, investment into UK fintech startups this year has got off to the quickest start when compared to any calendar year, according to Innovate Finance.

As things stand, the amount invested in 2019 so far is equivalent to nearly 85% of the total that was raised in 2018.

Challenger banks dominated the charts with the most significant investments, while the payments sectors also experienced large growth.

While London based companies once again dominated, the research also found that there were significant raises by firms in other parts of the country, notably in the north of England (Greater Manchester, Derbyshire and Newcastle).

Commenting on the findings, Charlotte Crosswell, CEO of Innovate Finance, said:

Investment into the UK fintech sector shows no sign of slowing down. The flow and impressive size of individual investments demonstrate an ecosystem that is showing signs of growing maturity. This research underlines the UK’s position as a world leader in fintech. It is hugely encouraging to see evidence of this resilience and growth despite the uncertainty and challenging times ahead.

the Encompass view

These encouraging figures underline the UK’s place as a leader in the fintech space.

What this investment growth shows is that there is a real belief in the UK, and its companies, when it comes to the services provided and the talent in the sector.

Many of the UK’s fintech clusters have sprung up in leading university towns and cities, where an abundance of talent, combined with regional funding initiatives designed to create high value jobs to retain local talent, have led to many places becoming hotbeds of innovation.

Looking more broadly, the UK has a regulatory regime that embraces innovation. These factors have combined to make the UK an ideal base for fintech companies, as well as for the industry to progress and attract, as these figures show.

The implications of Brexit are bound to have had an impact, and continue to do so as we move forward, as businesses are forced to operate more globally. The potential for divergent regulatory regimes may add to the burden and increase the need for automation, but that will be dependent on the evolving view of the of the regulators.

the Encompass view

These encouraging figures underline the UK’s place as a leader in the fintech space.

What this investment growth shows is that there is a real belief in the UK, and its companies, when it comes to the services provided and the talent in the sector.

Many of the UK’s fintech clusters have sprung up in leading university towns and cities, where an abundance of talent, combined with regional funding initiatives designed to create high value jobs to retain local talent, have led to many places becoming hotbeds of innovation.

Looking more broadly, the UK has a regulatory regime that embraces innovation. These factors have combined to make the UK an ideal base for fintech companies, as well as for the industry to progress and attract, as these figures show.

The implications of Brexit are bound to have had an impact, and continue to do so as we move forward, as businesses are forced to operate more globally. The potential for divergent regulatory regimes may add to the burden and increase the need for automation, but that will be dependent on the evolving view of the of the regulators.

Wayne Johnson | CEO & Co-founder, Encompass

firms find blockchain ‘fails to match early promise’

blockchain | encompass blogMany of the early evangelists for blockchain have come to the conclusion that production-ready deployment still remains a distant goal, according to a new survey.

Research conducted by the World Economic Forum and Accenture, including interviews with 550 individuals and an analysis of 79 blockchain projects, has found little confidence in the ability of the technology to match its early promise.

On average, survey respondents expected a 24 per cent return on investment on their early blockchain projects, but realised only a 10 per cent return. Furthermore, 59 per cent of respondents said they had no confidence that these projects would deliver a positive return on investment.

The research states:

It is important to keep in mind that blockchain is in its early stages and there are limitations as a result. For example, challenges exist in fully addressing security, speed and efficiency. It is important for organisations to carefully consider whether there are other technologies or approaches to digitisation that may deliver on their objectives more effectively or efficiently.

Finextra has more.

report indicates public doubts over Facebook’s Libra

the full picture, this week - 26 July 2019 | Facebook libra cyptocurrency | encompass blogPeople across the US “don’t trust” Facebook’s anticipated new stablecoin, Libra.

After carrying out a poll, consumer insights provider CivicScience found that, of those that expressed a view, just two percent felt they would trust Libra and its Calibra wallet more than Bitcoin.

By comparison, 40 per cent said they would trust the public cryptocurrency more, while 19 per cent said they would trust both options about the same.

CivicScience said more research is needed to understand the levels of uncertainty. However, it concluded:

Similar to when Bitcoin first mysteriously surfaced ten years ago and brought with it the cryptocurrency gold rush, no one really knows what to expect when some of the largest corporations in the world collaborate to create their own version. Regardless, it’s definitely an exciting trend to watch unfold.

Read more.

news in brief

The European Commission has said more should be done to counter the multi-billion Euro flow of dirty money in the European Union. Major shortcomings have emerged in the way banks and Governments handle the issue. Latest here.

The use of Artificial Intelligence (AI) in financial services is still only at a “nascent” phase, with a number of firms yet to ask themselves fundamental questions around ethical use, according to the Financial Conduct Authority (FCA)’s executive director of strategy and competition. Find out what he had to say here.

The UK Government has published its response to an MP committee’s comments on overseas buyers of properties in the UK – and the aim is to tighten overall Anti-Money Laundering (AML) provisions. Earlier this year, a Parliamentary committee claimed that 160 properties in the UK were owned by “high corruption-risk individuals” and called for more to be done to deter money laundering activities in the real estate industry. The Joint Committee on the Draft Registration of Overseas Entities Bill said it welcomed the measure but it insisted more must be done. Read more.

A lawyer acting for three people charged with participating in a $100 million money laundering syndicate linked to organised crime says the group is “distressed … about the huge allegations” levelled against them. All three were targeted over their alleged role in using a south-west Sydney security business as a “front” to launder money in and out of the hands of organised criminals in Australia and abroad that was first believed to have handled $80 million in the space of three to four years. More from the Sydney Morning Herald.

Cryptocurrency crimes have resulted in about $2.3 billion in losses in South Korea during the past two years. More than 400 people have been charged in relation to related crimes, reports Coindesk.

Most of the money laundering investigations in Brazil have been halted. The decision threatens one of the most important investigative tools against corruption and leaves Brazil at odds with the international regime. Read more.

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.