Quarterly Trend Letter 

September 2021
This quarter the i-KYC Trend Letter sheds light on several interesting topics related to the prevention of financial crime.

Our guest contributor this time is Pierre Simon, Principal Consultant at Simon Consulting ( Pierre clarifies the interdependence between Business-Wide Risk Assessments, AML/CFT policies and Customer Risk Assessments, and highlights recent EBA guidelines on this subject.

Rolf tackles impact of ‘New Normal’ work conventions post-COVID on FEC prevention strategies and Pieter tries his hand at explaining why, despite an ever expanding volume of AML/CFT rules and regulations, law abiding, well functioning organisations still can, and regularly do end up in a bad place.

Our featured training this quarter is really a ‘gentle reminder’ for those of you who have not yet satisfied your AML/CFT staff training obligations for 2021. The clock is ticking...!
Why good organisations sometimes do bad things

Organisations mostly rely on rules, controls and training to ensure compliance with laws and regulations. They set up policies and procedures, implement codes of conduct and provide training on these to employees. Staff need to confirm that they know and understand what is expected of them and that they will comply, knowing that non-compliance will be sanctioned. As pressure on management mounts following failures and negative publicity, a ‘zero tolerance’ attitude for misconduct and breaking the rules prevails.

The problem with a rules- and controls-based approach to compliance is that it does not provide very effective guidance when dealing with ethical situations such as is often the case with financial integrity, e.g., prevention of money laundering. In fact, when rules are our guide, it is easy to forget the underlying reason for them. Rules can make us stop thinking. Rules can get in the way or challenge sound judgment of what is the right thing to do.

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The Crucial Role of a Business-Wide Risk Assessment
To comply with the revised EBA ML/TF Risk Factors Guidelines, financial institutions should use the business-wide risk assessment to inform the level of initial customer due diligence that they will apply in specific situations, and to particular types of customers, products, services and delivery channels. And finally, customer risk assessments should inform, but are no substitute for, a business-wide risk assessment.

Even though the business-wide and customer risk assessments are different and separate processes, they are interdependent. This means you need to know how to use them and how they interact between each other, in order to have an overall effective ML/TF risk assessment procedure.
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Featured Training

Programme News: Combating Money Laundering and Terrorism Financing

Annual AML/CFT Training:
Are You Compliant For This Year?

All regulated financial institutions are required to provide all employees with an annual anti-money laundering awareness training. i-KYC Annual AML/CFT Risk Awareness e-learning helps organisations to effectively train their staff about correct understanding of the latest AML/CFT risks and trends. The course ends with a Knowledge Check and comes with a Certificate of Completion. An audit report  with evidence of course completion of users including Knowledge Test scores & time stamp for local Regulators and Correspondent Bank relationships is part of the services provided.

Modules with specific AML/CFT Laws & Regulations are available for the following Countries/Regions:

The Netherlands: Wwft
EU: Latest EU AML Directives
US: AMLA 2020, FinCEN
Singapore: CDSA and TSOFA
UAE: CB UAE & DFSA regulated
Australia: AUSTRAC
Malaysia: AMLA
Caribbean Region
The Philippines: AMLA

For other countries/regions please contact us.

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Managing FEC Risks When Working From Home
We like to take a pragmatic and hands-on approach in our work with FIs on the topic of FEC prevention. It’s important to have regulations, policies and control measures in place but we believe it all starts with ‘getting it right the first time’ and making sure that all staff interacting with clients and transactions actually comply with the policies on a day-to-day basis.

Making staff understand the policies and adhering to them is difficult enough when employees are located in the same building. It becomes more complicated if teams work from different office locations across countries and regions and even more difficult when people no longer work under the security and oversight measures that exist in traditional banking offices.
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