Keith Furst and I discuss how data scientists working on compliance projects can work together better to avoid unintended consequences which prevent compliance from getting the data it needs.
Read More3 things we learned at our Fintech Talks - July Edition Dinner Event→
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Last Thursday we had the privilege of hosting 30 senior banking executives at our quarterly FinTech Talks dinner event. The event theme was Trust, Transaction Monitoring and AML for financial messaging, and Keith Furst, a financial crime expert with experience at leading European and American financial institutions flew in from New York to headline the discussion.
Read MoreWhy Banks Must Evolve their AML Process to Manage Micro-Jurisdictional Risk
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United States sanctions policies have evolved over the years, from country-wide embargos to more nuanced approaches targeting specific entities. According to Jacob J. Lew, Secretary of the Treasury, the sanctions implemented today are more focused on bad actors while trying to limit the negative externalities. Lew described his view on the traditional sanctions model at the Carnegie Endowment for International Peace which is eloquently summarized by this quote:
Read MoreCyber Fraud on the Rise in Southeast Asia
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A series of cyber fraud attacks targeting financial institutions through the SWIFT global messaging system has prompted an industry wide review of IT security measures and has highlighted the rising risk of cyber fraud against financial institutions in Southeast Asia and beyond. SWIFT has responded with a five-part customer security program to reinforce the security of the global banking platform, yet its CEO has warned “there will be more attacks.”
Read MoreTRUST, TRANSACTION MONITORING AND AML FOR SWIFT MESSAGING
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As regulatory and compliance controls become increasingly strict, how confident can you be that you are doing enough to spot and prevent risky SWIFT transactions and money laundering attempts?
Read MoreEXCLUSIVE: Hackers Compromise Global Banking System at Highest Level, Investigator Reveals
/The global banking system has been compromised by cybercriminals who have demonstrated they have high-level access that gives them nearly full control to alter data and steal from banks, according to an expert who has been investigating them on the darknet.
Read MoreFive (5) Crucial Steps Financial Institutions Can Follow to Prepare for a Backlog of Customer Due Diligence Reviews
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It’s a dynamic time in the financial crimes world and this is especially true for Customer Due Diligence (CDD) regulations, as demonstrated by the following recent developments:
- The leak of the Panama Papers highlighted well-known fears in the financial compliance world that the use of shell companies obfuscates the true ownership of the entities.
- Financial Institutions (FI) are working to comply with the new rules on beneficial ownership.
- The Financial Crimes Enforcement Network (FinCEN) released the “Customer Due Diligence Requirements for Financial Institutions; Final Rule” on May 11, 2016.
Recent attacks highlight the rising risk of cyber fraud for SE Asian banks
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A series of cyber fraud attacks targeting financial institutions through the SWIFT global messaging system has prompted an industry-wide review of IT security measures and has highlighted the rising risk of cyber fraud against financial institutions in Southeast Asia and beyond. SWIFT has responded with a five-part Customer Security Programme to reinforce the security of the global banking platform, yet its CEO has warned “there will be more attacks.”
Read MoreMoney Laundering Conference in Canada 2016
/Happy to announce I will be presenting at the 14th installment of Canada’s premier event in the field of money laundering compliance and control. The theme of Money Laundering in Canada 2016 is Financial Crime, Compliance, and Regulation: Keeping Pace with the Times.
Look forward to seeing some of you on October 2 -4, 2016 at the Toronto Marriott Downtown Eaton Centre in Toronto, Ontario, Canada.
How the misuse of SWIFT MT 202 is fuelling financial crime
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The September 11, 2001 terrorist attacks on the United States could be one of the most redefining moments of the 21st century as the chain of events which followed still has a significant impact on our daily lives today. Airplane hijackings are not a new phenomenon as the first one recorded occurred on February 21, 1931 in Arequipa, Peru. Since 1931 there have been dozens of hijackings across the globe, therefore some would argue that there was a tremendous security gap in the airline industry which could have been addressed prior to 9/11. Implementing the type of airport security we have today may have been perceived as cost prohibitive prior to 9/11, yet who would have ever thought that someone would be capable of using a passenger plane as a missile? While crashing planes as a means of destruction is not a new concept, as this was done by the Japanese Kamikaze in World War II, it seems that our moral integrity could not conceive of using a passenger plane with innocent civilians on it to attack another civilian site.
Read MoreThe challenges and benefits of mapping SWIFT messages to your Transaction Monitoring System (TMS)
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The Regulatory landscape and SWIFT messages
Cross-border payments have been a central theme in recent regulatory actions where regulators levied record breaking fines against financial institutions that failed to comply with Bank Secrecy Act / anti-money laundering (BSA / AML) regulations. The Society for Worldwide Interbank Financial Telecommunications (SWIFT) is, in some sense, at the heart of these violations because it is one of the major facilitators of global money transfers which have come under increased scrutiny.
Read MoreTHE STRUGGLE FOR A HOLISTIC VIEW OF THE CUSTOMER AND THE RISK TO COMPLIANCE SYSTEMS
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Most, if not all enterprises, would like to have a holistic view of their customers and this is especially true for Financial Institutions. However, the reality on the ground at some Financial Institutions seems to fall short of this goal for various reasons such as:
Read MoreCorrespondent Banking: Risk rating the respondent bank's customers via watch lists
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Correspondent banking could arguably be one of the most difficult business lines for AML (Anti-Money Laundering) suspicious activity systems to monitor, but are there any opportunities for improvement and increased sophistication? The fundamental conundrum for Compliance departments monitoring correspondent banking payment activity is that they must rely on the respondent bank's AML policies, procedures, controls and technology systems to identify suspicious activity and to take appropriate steps to mitigate the risks which could result in the respondent bank ending relationships with nefarious customers. In order to remain proactive banks providing access to the US financial markets via correspondent banking relationships should consider increasing the sophistication of how they detect suspicious activity based on what information is already contained in the wire payments and existing watch lists.
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