What changes can we expect in customer onboarding in the next few years? Hear the optimistic outlook from Tommy Nicholas at Alloy on the future of fraud prevention and onboarding best practices. Eager to see the rest of the highlights? Check out our Video Series: Understanding Customer Onboarding with Tommy Nicholas from Alloy and Natasha Vernier from Cable (see link in comments). #Fintech #Banking #Regulations #fintechinsights #fraudprevention #FutureOfFintech
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The new FinCEN NPRM mentions "effective" 180 times. As the fact sheet explains, "effective AML/CFT programs safeguard national security and generate significant public benefits.” I read this as - EFFECTIVENESS IS HERE TO STAY! The regulators have been telling us this was coming, it’s here and it’s here to stay. The AML Act (2020) comprehensively updated the BSA for the first time in decades. One of the biggest changes was that this act required that FinCEN announce government-wide AML/CFT Priorities and to issue regulations incorporating these priorities. FinCEN announced these priorities in 2021 and now, it’s finally time to incorporate these into the program rules. The key words are: *Effective*, *Risk-Based*, and *Reasonably Designed*. What does an Effective, Risk-Based, and Reasonably Designed program mean? - You’re preventing the flow of illicit funds - You’re assisting law enforcement and national security agencies with the identification and prosecution of persons attempting financial crime - You’re using your risk assessment process to identify where to spend your attention and resources - No short cuts (one size-fits-all approaches) that hurt the underserved - Use innovative technology (no more box checking, use what you need to use to be EFFECTIVE) Sounds great….what’s actually expected here? 1. You need to be able to show how you use your risk assessment. Prove that the results of your Risk Assessment process directly fed into how you developed your policies, procedures and controls. 2. You need to be able to evidence that your board (or equivalent body) has oversight of your AML/CFT program. You’ve given them the right data to demonstrate effectiveness and it’s clear they understand it. How do you evidence effectiveness to your regulators today? Get in touch if you want to talk about how Cable solves these!
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The Wolsberg Group have released a statement on Effective Monitoring for Suspicious Activity. Some of the areas that it highlights are: -Monitoring for suspicious activity (MSA) is wider than transaction monitoring. It needs to encompass ongoing CDD, TM and other monitoring that takes into account a wider set of attributes. -Today’s MSA programs are broken. They apply the same rules across all customers and products and focus on observed risks versus the effectiveness of the rules. -FIs need to leverage their data to assess the effectiveness of their MSA program. -They specifically call out “control oversight mechanisms” as one of the areas that is ripe for innovation. -Traditional customer segmentation is outdated and because it’s based on static customer attributes; it does not consider common transaction activity among segments. Segments should instead consider a mix of known attributes and statistical clustering. Overall I read this as... Effectiveness matters!! Let me know if I have missed any key takeaways in the comments, and would love to hear how people think this will be used in practice. https://lnkd.in/dTMuP9_T
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Well this is timely! Jason Mikula's book on BaaS will surely be a must read given his reporting over the last few years. Looking forward to getting stuck into it when it arrives...
BIG NEWS: I wrote a book (with foreword by none other than Simon Taylor.) Yes, it's on a banking-as-a-service: It doesn't officially publish til later this year, but you can PRE-ORDER NOW, and loyal readers/listeners/followers can get 20% off by buying directly through the publisher, Kogan Page Publishing, and using promo code "BaaSIsland" -- link in the comments below👇 Really excited to finally reveal what I've been working on for the last ~6 months, and many thanks to everyone in my network, especially my podcasting partner-in-crime Alex Johnson (and my family!) who have been so supportive during this time.
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Saying you have BSA/AML controls in place is no longer good enough, as the DoJ once again highlight, in their prosecution of Paxful. *Old World:* saying you have AML policies in place *New World:* being able to evidence you have AML policies in place *Old World:* saying you perform KYC checks *New World:* proving you have effective KYC checks for 100% of customers You now need the knowledge and evidence to walk into an exam and say you don't have a breach or a failure. Just like our customers do! “Cable gives me the confidence to walk into any regulator and say I know I don't have a breach.” (Steven Eisenhauer, Chief Risk & Compliance Officer, Ramp) Thanks Jason C. Honeycutt, Attorney, CAMS, CAMS-Audit for sharing this!
Another AML prosecution by DoJ… Paxful Inc. Co-Founder Pleads Guilty to Conspiracy to Fail to Maintain Effective Anti-Money Laundering Program -Paxful, an online peer-to-peer virtual currency platform and money transmitting business -customers negotiated for and traded virtual currency for a variety of other items, including fiat currency, pre-paid cards, and gift cards -allowed customers to open accounts and trade on Paxful without gathering sufficient know-your-customer (KYC) information -marketed Paxful as a platform that did not require KYC -presented fake AML policies to third parties that he knew were not, in fact, implemented or enforced at Paxful -failed to file a single suspicious activity report, despite knowing that Paxful users were perpetrating suspicious and criminal activity. https://lnkd.in/gtGqKfAB.
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What role do scams and social media play in the increasing complexity of fraud? Explore the murky world of fraud with Tommy Nicholas at Alloy in our latest video. Eager to see the rest of the highlights? Check out our Video Series: Understanding Customer Onboarding with Tommy Nicholas from Alloy and Natasha Vernier from Cable (link in comments). #Fintech #Banking #Regulations #fintechinsights #fraudprevention #FutureOfFintech
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What are the three essential steps a risk and compliance team must know to successfully onboard a customer? Discover the insights shared by Tommy Nicholas of Alloy on navigating these crucial aspects. Eager to see the rest of the highlights? Check out our Video Series: Understanding Customer Onboarding with Tommy Nicholas from Alloy and Natasha Vernier from Cable (link in comments). #Fintech #Banking #Regulations #fintechinsights #fraudprevention #FutureOfFintech
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How does the regulatory environment in the US differ from Europe when it comes to customer onboarding? Discover the nuances with insights from Tommy Nicholas from Alloy. Eager to see the rest of the highlights? Check out our Video Series: Understanding Customer Onboarding with Tommy Nicholas from Alloy and Natasha Vernier from Cable (link in comments) #Fintech #Banking #Regulations #fintechinsights #fraudprevention #FutureOfFintech
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What are the key differences between fraud prevention and regulatory compliance during customer onboarding? Join me each day next week as I share highlights from my conversation with Tommy Nicholas, CEO of Alloy, exploring compliance, fraud prevention, and risk appetite. Eager to see the rest of the highlights? Check out our Video Series: Understanding Customer Onboarding with Tommy Nicholas from Alloy and Natasha Vernier from Cable (link in comments). #Fintech #Banking #Regulations #fintechinsights #fraudprevention #FutureOfFintech
Co-founder and CEO of Cable | On a mission to reduce financial crime in the world
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