The Fourth Anti-Money Laundering Directive (EU) No. 2015/849 (AMLD 4) was implemented (June 2017) to set clearer compliance guidelines and requirements for banks and wider professional groups (e.g. accountants and lawyers). Also, as part of the new Directive there will be a significant increase in monitoring and due diligence for transactions by firms, especially given the reduced threshold from €15,000 to €10,000 for customer transactions.
Clearly, policing clients and their activities can be a costly and complex business. Based on research completed by the British Bankers Association (BBA) with major banks, over £5BN a year is spent on core financial crime compliance activities. Understanding your client’s business and knowing beneficial ownership goes beyond client’ activity and it’s now a requirement to also know about your customer’s customer to comply by using central registers containing beneficial ownership information made public throughout the EU.
Also, since the implementation of AMLD 4, there will be further compliance scrutiny through the impending Fifth Anti Money Laundering Directive (AMLD 5) as this will incorporate high-risk 3rd countries, virtual currencies and measures to enhance pre-paid instruments.
However, the right RegTech solutions can help.
As you know, RegTech is not new to supporting financial services firms and banks. For decades, technology has been developed and adopted by banks mostly to deliver business process automatization. In recent years, there’s been significant developments using the latest innovation technology to mitigate financial crime through (Real-time) payments monitoring, reporting, blocking through machine learning, predictive analytics for markets trade surveillance and end-of-day reconciliation checks.
Some great solution examples include TAINA tackling FATCA and CRS compliance challenges whilst saving costs, improving efficiency and removing operational risks associated with manual workarounds and also, Comply Advantage, which offers an artificial intelligence solution to enable clients to monitor real-time insight to help protect businesses from financial crime.
Axis has helped many clients consider appropriate RegTech solutions with the right approach and supporting argument for a compelling business case to tackle their business challenges and also, deliver the right outcomes for the bank and their customers.
If you are facing similar challenges or perhaps you’re are losing patience with the traditional approaches from the market, we´d be delighted to help stimulate some ideas and support your business priorities to achieve the right business and customer outcomes.
Axis works with financial institutions to help to deliver their regulation, transformation and innovation agenda. We have helped clients to prepare for regulatory compliance, transform their business and operating models, and deliver new products and services to market. This often starts with just a meeting and a simple conversation with you.