As banks expand services into the emerging markets of Asia, Africa, the Middle East and Eastern Europe, the level of complexity in dealing with multiple counterparties and their associated risks becomes a factor in assessing money laundering risks. Typically these emerging markets translate to a scarcity of reliable and accessible information that makes it increasingly difficult to spot potential risk in financial transactions.
As a leading AML solution provider, Accuity advises banks looking at these emerging markets to watch for AML challenges in the following areas:
Fundamental choices need to be made to ensure adherence to regulatory frameworks without requiring costly manual processes. Ultimately, the attraction of the business opportunities in emerging markets must outweigh the costs of performing these business activities.
To find AML screening success, organisations must gain the right information at the right time, and ensure it is prepared for doing business in emerging markets. Accuity identifies the following best practices for balancing the need to meet regulatory compliance:
1. Use globally recognised watch lists, procedures, and policies even if the execution of the screening requires locally operated instances of the programmes.
2. Ensure systems can effectively screen non-Latin characters that would appear in customer account databases or within domestic payment messages against Latin-based watch lists and in-country non-Latin watch lists.
3. Empower “good files”. As customer records are dispositioned and false positives are reviewed, robust systems should have an ability to store these records marked ‘good’ to avoid future review work in subsequent screenings.
4. Consider the matching methodologies. Understand how the screening engines interact with data entered by users from transactions or account databases to find matches against caution lists.
Hugh Jones, Chief Executive Officer, Accuity says: “Doing business in an individual country or across an emerging region can mean facing a host of unique challenges that can undermine AML screening programmes. Accuity has a wealth of experience in meeting the requirements of banks and offering screening solutions to accommodate non-Latin watch lists to our clients in emerging markets to ensure effective results.”
“For regulated institutions, developing an effective screening and compliance programme means gaining a thorough understanding of the risks emerging markets present, along with understanding the entire compliance landscape and applying that understanding to the AML data and technology systems they deploy.”
For more information and best practices for balancing the need to meet regulatory compliance, visit Accuity at Sibos stand #F88 or visit the Accuity website.
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