Your Hosts. Abi Smith Webinar Host, Encompass Corporation. Alex Ford RegTech & CDD Operations, Encompass Corporation.

Transcription

1

2 Introduction

3 Your Hosts Abi Smith Webinar Host, Encompass Corporation. Alex Ford RegTech & CDD Operations, Encompass Corporation.

4 Agenda Introduction Your Hosts AML Regulation Update Best Practice in KYC Q&A

5 Key Take-Aways 1. Key KYC challenges firms face today 2. Implications of AML/CTF regulations on KYC processes 3. Manual, outsourced, automated: solutions available 4. Best practice KYC in professional services 5. Where you can go to find out more

6 Setting the scene

7 Context: Governance, Risk & Compliance

8 Implications of AML/CTF regulations on KYC processes

9 New regulations: new demands International Financial Action Task Force Recommendations FATF European European Money Laundering Directives EU 3MLD -> 4MLD (+5MLD) UK Money Laundering Regulations 2017 (Draft) Proceeds of Crime Act (amended) Financial Services and Markets Act (amended) Terrorism Act (amended) Criminal Finances Bill (Act) Office for Professional Body Anti-Money Laundering Supervision (OPBAS)

10 New regulations: new demands The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017(draft) 26 th June 2017 Risk Assessments National Risk Assessment II (June 2018) Supervisory Body Risk Assessments on sector and firms / clusters of firms Regulated Firms Risk Assessments an immediate requirement (June 26 th 2017) Risk Based Approach Focus on Risk Based Approach CDD measures flow from Risk Assessment & RBA Requirement to create and maintain polices, controls and procedures related to risks identified within Firm s Risk Assessment Board level appointee responsible for compliance (important for non-fca regulated firms who may not adopt such an approach today) CDD / SDD / EDD Customer Due Diligence required on all customers; lower risk = SDD, higher risk = EDD. New triggers. SDD is not an exception from CDD, instead triggers reduce extent of CDD measures to apply (based upon Risk Assessment & RBA) EDD now explicitly covers correspondent relationships (prohibition on shell banks) Requirements around domestic vs foreign PEPs

11 Key KYC challenges firms face today

12 Focus: Corporate CDD within the KYC Process Commercial in confidence

13 KYC Today manual solutions why? Risk professionals report a lack of confidence in technology in four key areas : Lack of quality data Undermines compliance - Single data sources - Collating diverse data - No unified data model Beneficial ownership is data intensive Analysing huge volume of data to understand corporate structures & ownership is difficult and costly Lack of efficiency Electronic manual processes often decrease rather than increase efficiency - Errors and the compliance bottleneck - Duplication of effort - Low value operational processes Regulatory scrutiny Confidence of being able to meet regulators demands for proof of a Risk Based System of controls & evidence for individual cases is at an all time low Commercial in confidence

14 Manual, outsourced, automated: solutions available

15 Manual, outsourced, automated: solutions available Information providers

16 Information Providers Credit Bureaux Screening & News Official Registers Person ID &V

17 Manual, outsourced, automated: solutions available Information providers Workflow & Profile tools

18 Manual, outsourced, automated: solutions available Information providers Workflow & Profile tools KYC Managed Service

19 KYC Managed Service MLR 2017 (draft) Regulation 38 (7) Nothing in this regulation prevents a relevant person applying customer due diligence measures by means of an agent or an outsourcing service provider provided that the arrangements between the relevant person and the agent or outsourcing service provider provide for the relevant person to remain liable for any failure to apply such measures.

20 Manual, outsourced, automated: solutions available Information providers Workflow & Profile tools Managed Service & Utilities Increased headcount

21 In-House processes Increased headcount Increased Headcount Front Office Application Form Workload Distribution Expensive low level work Repetitive Manual Data Collection Policy Deviation Data Sifting Limited time for high value analysis Lack of scalability Compliance Bottleneck Manual Policy Interpretation Limited Time for Risk Analysis Additional Data Required Decision Remediation on cost not RBA Compliance Bottleneck

22 Manual, outsourced, automated: solutions available Information providers Workflow & Profile tools Managed Service & Utilities Increased headcount Automation Technology

23 Automation to augment Front Office Application Form Workload Distribution Repetitive Manual Data Collection Policy Deviation Data Sifting Manual Policy Interpretation Limited Time for Risk Analysis Additional Data Required Decision Remediation on cost not RBA Compliance Bottleneck

24 Automation Technology Automation Front Office Application Form Automation Decision Remediation on RBA Compliance Scalability

25 Next Generation KYC Technology Our unique capabilities combine to enable a risk based system of control. Lack Your trusted of Quality data Data providers Our outstanding connections More trusted global data providers than any other KYC solution Beneficial Your regulatory Ownership obligations is data Our beautiful intensivevisualisations Quickly and clearly understand corporate structures and beneficial ownership Lack Your data of Efficiency collection policy Our advanced automation Automated single or batch data collection to ease your burdens Regulatory Your audit & scrutiny proof concerns Our robust technology We track and record everything, delivering assurance when you need it most the new standard in KYC

26 Questions to consider

27 Best Practice Summary Questions to ask yourself? q Have you documented your risk assessment? q Do you know who your MLRO is? q Does your KYC Policy reflect a risk based approach? q Are your team appropriately trained and skilled? q Could you produce proof of due diligence on request? q Are you working with your bank to ensure they are comfortable with the level of risk you (your client accounts) present to them?

28 Best Practice Summary Is your KYC Process: ü Evidenced? ü Appropriate? ü Comprehensive? ü Continuous? ü Cost efficient? ü Scalable? ü Collaborative? ü Fast? ü Value adding? ü Information Rich?

29 Finding out more

30 Find out more? Blog: Law Society: Handbook: MLR2017: JMLSG: The Telegraph: Tackling Money Laundering Flag it up Campaign Anti-Money Laundering Webpage SRA Handbook Money Laundering Regulations 2017 Joint Money Laundering Steering Group Guidance

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32 Any Questions?

33 Thank you!