Ongoing Monitoring. Tackling the Challenges with Technology


Ongoing monitoring of AML and KYC hasn’t been much of a priority for many businesses until 5AMLD. But it should be.

Legal and regulatory changes mean that ongoing monitoring is one area of compliance that can no longer be overlooked. Effective AML and KYC compliance a onetime process, that if ignored, will have huge ramifications for your business.

With an added emphasis on firms to develop transparent, auditable processes, using technology and automation to handle your AML and KYC monitoring can reduce those compliance blind spots and ensure you are doing all you can to comply.

For businesses still working with manual systems, ongoing AML and KYC monitoring can be a laborious process to manage, time-consuming and often costly. Having the correct procedures in place to identify customers who pose an increased risk to your organisation is essential.

Ongoing monitoring of customer relationships isn’t straightforward. At Credas, we’ve found many of our client’s struggle. Even those who have experienced compliance teams.

Here are some of the most common challenges they face:

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How Often Should You Run Checks?

When dealing with a significant volume of clients, identifying how frequently to run checks, and the nature of each check is defined by your industry, advisory body and compliance process.

If you’re an accountancy firm, for example, you are required to screen your client annually.

With Credas, you can set the number of times you want to check your clients, and you can apply the rules for all clients globally, or each client individually.

Checks can be every month, every three months, quarterly, bi-annually, and so on. You set up your automated ongoing monitoring requirements direct from your portal, and we process the check at times specified and display the results alongside other check results.

You can also manually re-run checks on an ad-hoc basis. For example, if you’re an estate agent, and the sale of a property takes longer than anticipated, it’s advised that you re-check the individuals in the business relationship at regular intervals. If that client is identified as a PEP during your AML checking process, you are legally obligated to recheck that client again within twelve months from the end of your business relationship.

Credas gives you the ability to choose the frequency of your checks and the data sources, and then automatically screen customer against all relevant sources seamlessly, relieving these pressures.


Administrative Strain

Onboarding new customers is a primary concern for most business, but for compliance teams, they must also balance regulatory requirements for monitoring existing client relationships.

Businesses working with manual systems are at a disadvantage when handling their ongoing monitoring process, given the scale of the task. Ongoing really does mean ongoing, and manual systems restrict flexibility.

Compliance teams with limited resources may find themselves struggling to prioritise, especially as front-line business teams heap on the pressure to onboard new customers quickly.

Having technology like Credas to schedule ongoing checks, completing them in real-time – within your specified timeframe – and then keeping a clear audit trail significantly reduces the amount resource required.


Budgets Are Limited

Just like sales and marketing, compliance teams have operating budgets too. Budgets that are often limited and overstretched.

Many firms run manual checks from scratch at the beginning of each new business relationship, which is an inefficient and expensive way to process ongoing monitoring, that will dent budgets and overall profitability.

As compliance teams are tasked to do more with less, the use of technology frees up resource for other business-critical work, streamlining the workflow, reducing inefficiencies and tipping the balance back to profitability.


A Risk-based Approach

Following a risk-based approach ensures that your business can prioritise high-risk customers and use resources effectively.

Compliance teams will drive efficiencies with Credas’ ongoing AML and KYC monitoring by accessing all necessary data in a single centralised platform, that dynamically creates a clear audit trail.

Customers can be moved up or down based on your criteria as intelligent process automation identifies issues, giving you the flexibility and the tools to implement your risk-based approach at a detailed level.

Applying enhanced due diligence via Credas can take account of the greater potential for money laundering in higher-risk cases, especially when the customer is not physically present when being identified.

Our resolution centre further provides actionable management of information, records and reporting that are real-time and up to date.


What Checks Are Required?

Businesses need access to multiple datasets as part of their ongoing monitoring process.

Based on your businesses risk frameworks, there may be some sets of data that you will monitor against more frequently than others — for example, Politically Exposed Person (PEP) and Sanctions.

PEP and Sanction lists change regularly, as people and entities are added or removed, so having access to the right data is vital, for maximum efficiency.

Checks are straightforward and fast to process with Credas, as we have access to the most up-to-date worldwide lists, including those from the EU and the US.

Should a PEP be identified, we flag it directly in your portal for your MLRO and risk team to review and take action.

For those who would pose a higher risk to your business, this is a compliance hotspot, and missing changes would open your business to regulatory risk.


Introducing Ongoing Monitoring with Credas

 

Comprehensive monitoring is only possible when you have an accurate picture of your customer. Technology and automation will help you maintain best practice, and reduce regulatory and stakeholder pressure, paramount to doing better business and protecting your reputation.

The regulatory landscape ever-changing, using the right technology can often be the difference between a business staying ahead of the requirements or being left exposed to fines, reputational damage and in some cases, even the closure of the business.

With compliance requirements set to become more stringent in the years ahead, businesses are best placed to ensure they are aligning their business processes with these changes or partnering with a compliance expert who is.

Credas has transformed how businesses manage their AML and KYC obligations, and now with automated ongoing monitoring, we can detect and assess client record changes, and alert your team when there is a change so that focused action and further risk assessment can be taken.

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Relevant Law / Regulation:

Counter-Terrorism Act 2008 Part 3 (4)

Money Laundering Regulations 20(a)

Obligations:

  • Must carry out prescribed customer due-diligence measures for all customers not covered by exemptions
  • Must have systems to deal with identification issues concerning those who cannot produce the standard evidence
  • Must apply enhanced due-diligence to take account of the greater potential for money laundering in higher-risk cases, especially when the customer is not physically present when being identified, and in respect of Politically Exposed Persons
  • Some persons/entities must not be dealt with
  • If satisfactory evidence of identity is not obtained, the business relationship must not proceed further
  • Must have a relevant system for keeping customer information up to date
  • Must conduct ongoing sanction screening
  • Ongoing identification and updating of systems and controls

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