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In this issue of RSM Voice of Strategy & Sustainability, we're exploring how ESG intersects with two key topics for businesses: Together with Nicky Goes, our article highlights the increasing need for companies to integrate ESG criteria into their Customer Due Diligence for AML/CFT. This is becoming more important due to changing regulations and an increase in money laundering activities stemming from crimes harmful to the environment and society. https://lnkd.in/eSSHBavN In another piece, co-authored with Cem Adiyaman, we pinpoint the risks AI poses to ESG standards. We discuss how businesses using any form of AI can report these risks under the Corporate Sustainability Reporting Directive (CSRD). https://lnkd.in/eTJA5zJm

🚨AML and Compliance 🚨 As the regulatory landscape continues to evolve, here are some key trends in Anti-Money Laundering (AML) and Compliance that professionals should be aware of: Increased Regulatory Scrutiny: Governments worldwide are tightening regulations around AML compliance, resulting in heightened scrutiny of financial institutions. Organizations must ensure robust compliance programs to mitigate risks. Adoption of Advanced Technology: The integration of AI and machine learning in AML systems is on the rise. These technologies enhance transaction monitoring and improve the identification of suspicious activities, allowing for more efficient compliance processes. Focus on Beneficial Ownership Transparency: There is a growing emphasis on understanding and verifying beneficial ownership to prevent illicit financial flows. Companies are being urged to maintain accurate records and disclosures. Enhanced Collaboration Between Institutions: Financial institutions are increasingly collaborating to share intelligence on suspicious activities. This collective approach helps in identifying trends and combatting financial crime more effectively. ESG Considerations: Environmental, social, and governance (ESG) factors are becoming integrated into compliance frameworks. Organizations are expected to assess how their activities impact the broader societal context, including AML efforts. Staying updated on these trends is crucial for compliance professionals as we navigate the complexities of the financial crime landscape. Let’s continue to share knowledge and best practices! #AML #Compliance #FinancialCrime #Regulations #RiskManagement

📑 The importance of digital transformation in the AML sector by valid8Me ➡️ Part 3 - Supporting sustainable finance and environmental goals 🌱 💡 I recently had the luck to discover the great white paper written by Michelle McGuire on the importance of digital transformation for the AML industry! You'll find below my take on its third section. 🌳 Switching to a digital onboarding is not just about going paperless. It's a fundamental shift towards efficiency. From my experience, firms do not only save costs but also boost client trust. ☁️ I've noticed first hand the revolution of cloud-first technology. In my eyes, it turns a cost center into a strategic asset. This evolution is essential for staying competitive in today's market. 🌿 For example, it greatly facilitates carbon footprint analysis and sustainability reporting. It allows for smarter, data-driven decisions that align with global climate goals, making it much easier for companies to meet their ESG targets. It's a significant step towards ethical finance, which is appreciated by more and more investment funds! 🤿 Dive into valid8Me's study if you want to get more valuable insights on the following topics: 📌 Enhancing efficiency, transparency and competitiveness 📌 Enabling innovation and new product development 📌 Improving client experience and access to financial services 🔗 To check the white paper: https://lnkd.in/e3Z-Wn8g Are you passionate about an AML related topic? 🤔 Would you like to write about it and reach over 20k compliance professionals? 🔥 If so, you can check out my newsletter ⬇️ and send me a message to work out the details! 🙂 🗞️ Newsletter: https://lnkd.in/eAsvqEeK #compliance #financialcrime #moneylaundering #aml #partnership Paul

Exploring the Nuances of Compliance and Anti Money Laundering: Insights from the Genesis of My Research Journey As I embark on the exciting journey of unraveling the intricacies of compliance and Anti Money Laundering (AML), I’m eager to share the initial revelations that have sparked my curiosity and fueled my pursuit of knowledge in this domain. At the outset of my research, I’ve been captivated by the multifaceted nature of compliance and AML, recognizing them not merely as regulatory imperatives, but as fundamental safeguards of financial integrity and trust within the global financial ecosystem. Here are some key insights that have emerged in the early stages of my exploration: 1️⃣ The Intersection of Regulation and Practice: Delving into the labyrinth of regulatory frameworks and industry practices has revealed the dynamic interplay between compliance mandates and operational realities. Understanding this intersection is essential for developing effective compliance strategies that align with organizational goals and values. 2️⃣ Ethics as the Cornerstone of Compliance: Ethics lies at the core of compliance, serving as the bedrock upon which regulatory adherence and organizational integrity are built. Exploring the ethical dimensions of compliance has illuminated the importance of ethical leadership, transparent communication, and a commitment to principled decision-making. 3️⃣ Technology’s Transformative Role: The advent of technology has revolutionized the compliance landscape, offering innovative solutions for risk assessment, transaction monitoring, and regulatory reporting. Exploring the transformative potential of technologies such as artificial intelligence, blockchain, and data analytics has opened new avenues for enhancing compliance effectiveness and efficiency. 4️⃣ The Global Dimension of Financial Crime: Financial crimes know no boundaries, transcending geographical borders and regulatory jurisdictions. Understanding the global dimension of money laundering, terrorist financing, and other illicit activities underscores the importance of international collaboration, information sharing, and harmonization of regulatory standards. As I traverse this fascinating terrain of research and discovery, I’m energized by the opportunity to contribute to the collective body of knowledge in the field of compliance and AML. While my journey is still in its nascent stages, I’m committed to diving deeper into these topics, exploring emerging trends, and engaging in meaningful discourse with fellow industry professionals. Join me on this journey of exploration and enlightenment as we navigate the complexities of compliance and AML together. Together, let’s strive to build a future where financial integrity, transparency, and trust are the cornerstones of our global financial ecosystem. 💼🔍 #Compliance #AML #ResearchJourney #EthicalLeadership #TechnologicalInnovation

Traditional compliance models are being outpaced by frequent regulatory changes, stemming from ongoing geo-political events and increased complexity from financial crime syndicates involving digital payments and AI. This is resulting in: - Increased alerts and workloads for compliance teams - Automation and outsourcing of some due diligence activities - A desire for robust compliance systems with CX at the forefront How are your current systems keeping up with these AML changes?

Compliance costs of #financialcrime are impacting mid-tier financial services firms in the UK more significantly than larger organizations. Smaller firms lack economies of scale, making compliance costs proportionally higher relative to their revenues. For these firms, financial crime compliance costs can be as high as 2% of total revenue, while for larger firms, it's less than 0.5%. Regulatory requirements are also tougher to meet for smaller firms due to their size and resources, affecting their profit margins more than larger firms. Coforge provides specialized expertise to make financial crime and compliance processes more efficient and effective. - By automating Customer Due Diligence (#CDD) processes, we help firms further increase efficiency and reduce manual effort. - Our #Quasar GenAI platform leveraging Artificial Intelligence (AI) and machine learning helps handle larger volumes and improve financial crime detection and prevention. - #Orchestrationplatforms to integrate fraud and AML functions, providing for end-to-end solutions, streamline operations and improve risk management. - Strategically sourcing #FCC processes to locations with the optimal balance of cost, quality, and regulatory compliance can reduce compliance costs while providing specialized compliance expertise and flexibility to scale compliance operations up or down as needed. #Coforge #AML #KYC #IDV #FCC #compliancecosts #financialservices #generativeai

Anti-Money laundering in wealth management: key questions answered Financial regulators around the world are tightening the grip on wealth and asset management (WAM) firms. This crackdown on money laundering (AML) is due to the complex financial products and emphasis on privacy that can make the WAM sector susceptible to criminal activity. Here's a breakdown of key questions WAM firms need to consider: • The UK's FCA is pushing for data-driven AML measures to identify and prevent financial crime. In the US, FinCEN is proposing stricter AML rules for investment advisors, including mandatory programs, reporting suspicious activity, and sharing information. Australia's AUSTRAC is focusing on transparency in identifying the source of funds through Enhanced Due Diligence (EDD). • Slow onboarding processes, delayed verification, and clunky systems indicate outdated technology. Analysts overloaded with manual reviews and false positives suggest inefficiencies. Fines or penalties for non-compliance are a red flag. Expensive upgrades and integration issues signal a need for modernization. • Artificial intelligence (AI) can analyze vast amounts of data to detect suspicious activity that might be missed by traditional methods. AI can also automate tasks, freeing up analysts to focus on higher-risk cases. Additionally, AI can streamline compliance processes, saving time and resources. • Be transparent with clients about KYC (Know Your Customer) procedures and explain how they benefit everyone. Utilize tools like sanctions lists, PEP databases, and adverse media checks to enrich client profiles. Leverage third-party data verification to minimize unnecessary paperwork. Effective AML compliance is no longer just a regulatory hurdle, it's a strategic opportunity. By adopting new technologies and embracing regulations, WAM firms can contribute to a safer financial system and gain a competitive edge. International Fintech Business (IFB), can help you enter the fintech industry. We will help you register a company with a financial license in any jurisdiction or buy an already-made company. Our experts can help with any questions you may have. Contact us today! For details: office@ifbusiness.uk More info: ifbusiness.uk #IFB #Fintech #WealthManagement

🌐 Basel IV has a great impact on EU financial institutions. Discover how technology can be a key ally in transforming compliance and reporting in our latest article. Learn more: https://lnkd.in/giGVRR7W #ProfileSoftware #RiskAvert #BaselIV #TechRevolution #riskandcompliance

To my Frankfurt 🔨 based network https://lnkd.in/eeDCZbtE This workshop with Moody’s experts and your peers concerned with anti-financial crime programs is a unique opportunity to learn and share best practices for risk and compliance processes. The session will begin with a short presentation delivered by Moody’s industry practice leads on: Expected impact of the new BBF and EU AML regulations on KYC/CDD processes Managing emerging risks in data architectures & governance Deployment of a perpetual KYC target operating model (major challenges & best practices) Enhancing intelligent screening using AI and Shell Company Indicator

🌟 Exciting Announcement! 🌟 We are thrilled to announce the launch of Reform, a company dedicated to enhance AML Compliance operational resilience and effectiveness. The technological advancements in Artificial Intelligence are captivating, promising a future where co-pilots and digital assistants are integral to many industries, including ours. However, the widespread implementation of these innovations is still on the horizon. Currently, we face significant challenges in meeting regulatory demands with limited human resources. Compliance budgets are stretched, knowledge is fragmented, and AML operations are under constant pressure. Instead of waiting for future technologies, we need to address the pressing issue of how to productize knowledge deployment and spread the expertise of the first generation of industry specialists. Financial institutions often develop unique financial crime risk management programs, making it difficult to reuse experience from elsewhere. Temporary projects rarely focus on knowledge transfer, compounding the problem. At Reform, our solution as a service approach is built on deep expertise. With over 20 years of industry experience, our extensive network of specialists allows us to lead and assemble unparalleled teams. We distill the learnings from hundreds of projects into proven methodologies and practical tools, replacing manual execution with quantitative heavy lifting. Our subject matter experts add qualitative assessments, ensuring end-to-end requirements are met. We deliver efficiency through technology and effectiveness by productizing best practices. We transfer knowledge in a solution-based approach to empower local teams. By capturing and spreading AML DNA across the industry, Reform is securing the future of Compliance for our clients and partners. Join us on this journey to reform the future of AML compliance! #Reform #AMLCompliance #Innovation #Technology #Compliance #FinancialCrime #NewBeginnings Louis Wittock, Filip Verbeke, Max Doemer, Brian Bolger, Geoffroy de Failly, Michael Caulfield, Vlasta Wolinska, Gérald Wittock, Sarah Lena Martinez, Daniel Torres Vera, Jacob De Bie, Gael Gaussens, Bram Vermeulen, Mao-Jie Jimmy Chen, Hendrik van Hamersveld, Raphaël Rysselaere, Hong Anh Luong, Matias D.