In the financial services sector, political and security constraints seem to grow ever more complex. At the same time, more and more business is conducted digitally. Fraud and unintended breaches of compliance are ever-present hazards. The interaction between these forces affects more of us, and does so more forcefully, than ever before.
Sanctions lists are updated frequently, and criminals leverage digital technology with skill. Anti-money laundering features prominently in compliance. In this world, it’s essential that the mechanisms in place to make appropriate checks are robust and responsive.
Where are the risks?
These are issues are pinpointed by LexisNexis® Risk Solutions’ Dalbir Sahota. Writing recently in thepayers.com1, he outlines three areas of concern in the digital payments realm:
- failed payments generally, including inadequate Know Your Customer checks – KYC
- unintended sanctions breaches
- failure to make adequate checks to prevent money laundering (AML) or not acting to combat the funding of terrorism (CFT).
He quotes two alarming figures. In 2020, worldwide losses from failed payments generally were thought to be in the region of a USD 118.5 billion. More recently, it’s estimated that in 2022 losses globally because of failings in KYC and AML were USD 5 billion – twice the figure for 2021.
Businesses are vulnerable at many levels. Financial losses, potential penalties for non-compliance, and significant reputational damage loom large.
Some organisations are more vulnerable than others
Banks and large corporations are especially exposed. Complex operations increases risk, especially when payments may be via networks of inter-related entities. If one link in the chain turns out to be sanctioned, then all participants are vulnerable.
Other “at risk” scenarios include funds flowing in and out of gambling, and the potential misuse of travel money and money remittance services. In these areas, malicious actors can exploit seemingly benign activities.
Timing is all
As Sahota underscores, there must be a shift from making compliance checks during a transaction (which may require stopping payments during a transaction if warnings are triggered) to pre-emptive checks before money is transferred.
The challenge then, is how to make such checks operationally reliable.
For accuracy, checks must be made as close to the time of the transaction as possible, in advance and ideally only by a few seconds.
The solution lies in tailored services designed to work forensically across the areas outlined above.
Digital automation is the key
Efficient, effective, and trustworthy verifications demand cloud-based, real-time digital services. Only holistic, around-the-clock global monitoring ensures genuine safety and security.
If KYC, AML & CFT, and Sanctions list checks are applied instantly to all transactions, participating businesses can be confident of safety and security.
But isn’t it daunting to find services that do all of this?
Not anymore.
Introducing Compli, from Essiell Compli
Compli, a product suite from Essiell Compli, is engineered to provide exactly this protection. It offers transaction surveillance that provides all the checks previously mentioned. It also analyses individual behaviours to identify different levels of risk, suggesting actions accordingly.
Hosted on AWS, Compli operates globally and harnesses our unique “Global Person” concept to craft individual profiles from multiple databases.
Compli ensures an unrivalled richness and accuracy of data –non-negotiables in ensuring compliance in the fight against money laundering, terrorism funding, organised crime, and sanctions busting.
Embrace full-time comprehensive compliance – welcome to Compli.
By Bjorn Larsson, Chairman of Essiell Compli.
To learn more about how Essiell Compli and Compli can improve your business’s safety and compliance – especially in the Gambling, Travel Money or Money Remittance sectors – please visit our website www.essiell-compli.com , or reach out by email to enquiries@essiell-compli.com . You can also book a call back or a demo via https://essiell-compli.com/book-a-demo/
1 The power of early sanctions screening technology in payment journeys, Dalbir Sahota, Senior. Director, Product Management at LexisNexis® Risk Solutions, Thursday 21 September 2023
