The Impact of Money Laundering on Customer Due Diligence
The Panama Papers scandal of 2016 led to the leaked individuals' names and associations being scrutinized by governments in the UK, Germany, France, Italy, Spain and Australia among others, which is unsurprising given that the financial services industry is in the midst of preparing for new stricter regulation to commence.
The Common Reporting Standards regulation, The Fourth Money Laundering Directive, the Foreign Account Tax Compliance Act and Financial Action Task Force recommendations on money laundering that have been proposed and enacted in Europe and the US are intended to strengthen the anti-money laundering (AML) regulatory environment and increase pressure on institutions to comply.
Financial institutions need to do more to be compliant with their customer due diligence (CDD) and know your customer processes (KYC). They need to check how secure their clients' data is internally. The same resonates with the provision of retail and not-for-profit services and the need to minimize a business' exposure to risk as a result of failure to comply with AML regulations.
The report is divided into three chapters, which cover the following areas:
- Overview of Risk Management
- Key Operational and Technological Trends and Spend
- Opportunities in Client Onboarding and Best Practice
The report focuses on recent developments as a result of AML regulation, and its effect on global regulation.
It provides an overview of key drivers and vendors operating in financial risk management.
It provides detailed analysis of the key operational and technological trends and challenges that institutions face due to the rapid rise in money laundering activity and frequent regulatory upgrades.
It provides insight into the impact of money laundering on businesses, and the CDD and KYC initiatives that services providers are taking to deal with risk and compliance.
- Understand key factors that drive governments and regulatory bodies to formulate and implement AML regulations.
- Be informed of the key operational and technological trends and challenges that institutions face due to the rapid rise in money laundering activity and frequent regulatory upgrades.
- Gain insight into key vendors operating in financial risk management and analyze best practices adapted by financial and non-financial companies to combat money laundering activity.
- Be informed about challenges and opportunities in client onboarding available to providers.
- Emerging economies are upgrading their compliance procedures to bring them in line with international standards.
- Institutions have been taking new measures such as establishing committees to focus on financial crime to ensure everyone in the organization is accountable for AML compliance.
- Firms are investing in technology solutions, integrated platforms, cloud technology and data analytics to meet compliance obligations and increase efficiency in operations.
- The emergence of new methods of financial crime has created a challenge for regulators, technology firms and institutions, requiring significant improvements in overall IT systems.
1 EXECUTIVE SUMMARY
2 DEFINITIONS AND METHODOLOGY
2.1 What is this report about?
2.3 About GlobalData
3.1 Overview of AML Risk Management
3.2 Key Drivers
3.3 AML End Participants
4 KEY OPERATIONAL AND TECHNOLOGICAL TRENDS AND CHALLENGES
4.1 Operational and Technological Challenges Summary
4.2 Technology Spending Trends
4.2.1 Overview of AML solution providers
4.2.2 Advanced AML solutions
4.3 Operational Trends
5 OPPORTUNITIES IN CLIENT ONBOARDING AND BEST PRACTICES
5.1 Risk Management Program Upgrades
5.2 Client Onboarding Challenges and Opportunities
Secondary Research Information is collected from a number of publicly available as well as paid databases. Public sources involve publications by different associations and governments, annual reports and statements of companies, white papers and research publications by recognized industry experts and renowned academia etc. Paid data sources include third party authentic industry databases.
Once data collection is done through secondary research, primary interviews are conducted with different stakeholders across the value chain like manufacturers, distributors, ingredient/input suppliers, end customers and other key opinion leaders of the industry. Primary research is used both to validate the data points obtained from secondary research and to fill in the data gaps after secondary research.
The market engineering phase involves analyzing the data collected, market breakdown and forecasting. Macroeconomic indicators and bottom-up and top-down approaches are used to arrive at a complete set of data points that give way to valuable qualitative and quantitative insights. Each data point is verified by the process of data triangulation to validate the numbers and arrive at close estimates.
The market engineered data is verified and validated by a number of experts, both in-house and external.
REPORT WRITING/ PRESENTATION
After the data is curated by the mentioned highly sophisticated process, the analysts begin to write the report. Garnering insights from data and forecasts, insights are drawn to visualize the entire ecosystem in a single report.