Nowadays, the circulation of financial flows is a challenge not only for public agencies, but also for those obliged to prevent money laundering, who can sometimes be involved as unwilling participants in the process of laundering funds originating from criminal activities.
Consequently, the legal measures established for the Prevention of Money Laundering and Terrorist Financing are reinforced on an ongoing basis, both at the domestic level in each country and at the European level with specific directives.
Developing and implementing an in-house solution to support all regulatory and reputational requirements can be very costly for an organisation, and it has little capacity to adapt to changes in a very dynamic legislative environment. On the other hand, it is difficult for small companies to have the necessary resources to allow them to comply with regulations.
HOW TO MINIMISE REGULATORY RISKS?
The AML/CFT regulation requires obliged entities to comply with a series of Due Diligence measures on their customers and suppliers through an exhaustive Know Your Customer (KYC) process. Among the data to be analysed are data on the Real Data Holders, which can be very complex to access, given the sensitivity of the personal information. Moreover, the legislation also compels obliged entities to monitor and keep updated the information obtained from each of their customers in the event of any changes.
Nowadays, there are technological tools on the market that allow both large corporations and small and medium-sized companies to protect their business from a legal and reputational point of view. Through specialised companies with access to multiple sources of information, including Official Registries of Real Holders, which also have extensive knowledge of existing regulations and are experts in processing large volumes of information and global databases that, supported by calculation algorithms and rules engines, enable the creation of increasingly more accurate Know Your Customers (KYC) processes (avoiding false positives), adding value to the set of data they process through advanced analytics and Machine Learning techniques.
Given these circumstances, we can conclude that Compliance Officers will increasingly become a key figure in organisations, and therefore, providing them with the necessary technological means to facilitate and optimise the compliance function will be one of the challenges for most organisations.