Ask Me Anything: what has Napier learned during June 2020?
Since the beginning of April, co-incidentally as the world locked down, every Thursday morning the Napier team has gathered via a Teams meeting for an ‘Ask Me Anything’ session.
Each week we have been honoured to host a different guest and hear different stories.
But there is one thing they all have in common: our guests are heavyweights in the world of AML, compliance, and enforcement.
Pulled together to put the front line of compliance before the front line of Napier, so as to speak, the aim of the AMA is to dig around the challenges, and expose the opportunities in the world of compliance.
Also, we’ve been privy to some extraordinary first-hand accounts of encountering financial crime, but needless to say, we can’t publish those.
Since these sessions are such an amazing learning opportunity for us, we’ve decided to pass on some of the highlights.
Over the last few weeks we’ve been privileged to speak to:
- Oonagh van den Berg, AML and Compliance Professional
- Nathan Lynch, Asia-Pacific Manager, Regulatory Intelligence, Thomson Reuters
- Karyn Kenny ,U.S. DOJ Resident Legal Advisor, US Embassy
- Frans Wiwanto, Chief Compliance Officer at Flywire
- Ridzuan Aziz, President of the Fintech Association Malaysia
- Thomas Dougherty, DOJ Southeast Asia Resident Legal Advisor for Cybercrime
- Nizam Ismail, CEO and Founder of Ethikom
- Chu Mansfield, Senior Compliance Officer, Global Markets APAC at BNP Paribas
So much has been discussed over the weeks, from trends in financial crime, to new kinds of technology; the challenges in transaction monitoring, ways to market RegTech and much more.
However, from all of these conversations, these themes emerged:
Covid-19 is catapulting change and creating challenges
We’ve seen changes in how we shop, pay, work, run our businesses and just about everything in between. The new norm for the economy will be less touch and more tech, and this will push demand for the likes of e-wallet providers, digital onboarding and many more innovative services.
Change clearly brings challenges and opportunities.
“The significantly different post-Covid financial crime landscape is seeing criminals and money launderers working hard to seize the many new opportunities to wash ill-gotten gains.”
Changes to regulation
Covid-19 has seen transactions rapidly increase at digital wallets and remittance services as lockdown has forced consumers to move from offline to online money transfers.
Simultaneously, regulators in the UK, and worldwide, have amended approaches to due diligence to take into account remote working. This has brought into question the capabilities of companies to perform acceptable levels of required due diligence, especially those less accustomed to larger volumes of transactions.
The result of this relaxation could see money laundering and financial crime on a scale that will shock us all.
Fraud
Another issue lurking beneath the waters relates to the urgently needed Government-funded economic relief packages. While these loans and grants are pushing vast sums of money into the economy, they may actually present potential fraud risks and consequently, money laundering.
We’re going through one of the biggest technological revolutions in history and Covid-19 will serve to catapult regulatory changes and advances in technology even further.
Regulators and the private sector need to work together: collaboration is key
A recurring theme is the general need for regulators and the private sector to work together to tackle money laundering more effectively.
“We need to get to a place where all regulators feel comfortable to reach out to the private sector. The most forward thinking regulators around the world are already doing so.”
Regulators need to invest in knowledge and the private sector should be seen as an immense source of knowledge for regulators. For example, the private sector is the driver of pioneering technological innovations in monitoring and screening technologies. The private sector’s frontline position also means it has invaluable knowledge and experiences of criminal activity.
Despite these advantages, it’s still common to see regulators playing a big brother role, telling industry enforcing very prescriptive regulations such as the EU’s 5MLD.
The best financial crime teams will have a super constructive relationship with the regulators. A relationship where regulators are seen not as a threat, but as a partner in the fight to protect the business and its customers against money laundering.
