Life is about to get tougher for money launderers.
One of the new government’s first tasks will be to approve draft regulations to implement EU 4MLD[i]. These new regulations, with their more rigorous approach, apply to banks and other relevant persons[ii]. One of the major changes is the need to thoroughly search for adverse information on potential and existing customers and to evidence this has been done. Carrying out Customer Due Diligence (CDD) manually on entities which are abroad is particularly demanding.
Today RegTech company Kompli-Global launches Kompli-IQ™, a unique search platform with the technology and expertise to meet these challenges.Kompli-Global CEO Jane Jee, who is also a barrister, says: “Companies will be questioning how they can comply efficiently and cost effectively with the new legislation, particularly the new level of searching/monitoring.
The starting point has to be to want to tackle money laundering because it is the right thing to do.”Searching for adverse information has become far more difficult given the explosion of information on the web, which makes it almost impossible to hold this amount of data in structured databases. The alternative, manual searching of the web, is very time consuming and often hit and miss with important information regularly overlooked or hidden from researchers.
Using Artificial Intelligence (AI) to judiciously search the World Wide Web and directories invisible to many search engines, such as Google, produces quicker, more accurate results allowing the records found to be saved and future searches scheduled, so the bots can do all the hard work leaving the researcher to simply view any new results found.To access this information Kompli-Global has developed Kompli-IQTM – a multi-lingual, licensed software as a service (SaaS) search platform.
Using proprietary machine learning technology, Kompli-IQTM interrogates a wide variety of global data sources on the web for published adverse information on individuals and entities.A company’s or individual’s name will be cross referenced against hundreds of search terms such as: court, fine, bribery or scam. Kompli-IQTM filters the data and search results are rapidly assessed, ranked and sorted. Additionally, these searches can be carried out in the right foreign language where the individual or company has associations outside of the home jurisdiction.
Kompli-IQTM forms a key weapon in enabling companies to accept the vast majority of customers who do not present a risk quickly and easily.”In today’s world, it is virtually impossible to conduct the required searches without harnessing the power of Artificial Intelligence (AI). If you try it will be expensive, inefficient and inconsistent. Above all, adverse information will be missed,” explains Jane.
The new Regulations introduce a more rigorous approach to Customer Due Diligence and Enhanced Due Diligence and have broadened the scope of Politically Exposed Persons (PEPs)[iii] to include those living in the UK (previously excluded) and their relatives/close associates. Add to this the need to check against sanctions lists and establish the beneficial ownership of companies and it is clear that there is a considerable increase in the amount of work involved.
“To address this, in addition to licensing Kompli-IQTM, Kompli-Global offers Due Diligence reports tailored to our clients’ specific requirements based upon their risk based policies. To compile these reports Kompli-Global interrogates multiple data sources and draws on the local expertise of its extensive advisory community in 66 countries covering 158 regions.
With this level of input Kompli-Global can provide the most in-depth information on which companies can base their risk based decisions and, importantly, provide the audit trail that a Regulator will demand,” explains Jane.”RegTech and human expertise can be a powerful defence against money laundering and Kompli-Global is harnessing the power of both – it’s the right thing to do,” she concludes.i 4MLD – The EU’s Fourth Money Laundering Directive (4MLD) came into effect on June 25, 2015 and is mandated to come into effect in all EU member states by June 26, 2017.4MLD outlines changes to the Third Money Laundering Directive (3MLD). Among the main changes are: a broader risk-based approach to onboarding and monitoring customers, customer due diligence and Politically Exposed Persons (PEPs).
The update and new approach promotes standards to combat money laundering and terrorist financing. In the UK. the Directive will be implemented by The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (“the Regulations”) which were published in draft on March 15, 2017 – we await the final version.ii Relevant Persons – Businesses falling under the Regulations are referred to as relevant persons.
The Regulations apply to: – Credit and financial institutions including banks and building societies- Auditors, external accountants and tax advisors- Notaries and other independent legal professionals- Trust or company service providers- Estate agents- Persons trading in goods to the extent that payments are made in cash in an amount of €10,000 (this amount was previously €15,000 under 3MLD)- Casinos- New and emerging financial products, such as e-money productsiii PEPs – Politically Exposed Persons (PEPs) are those who perform a prominent public function such as public office, including senior politicians, judicial and military officials.
Due to their position and the influence that they hold, these people may present a higher risk for potential involvement in money laundering, bribery and corruption.
Find Kompli-Global Online: kompli-global.com
On Twitter: @kompliglobal
On LinkedIn: Kompli Global Limited