RegTech IntelligenceThe global money laundering and terrorist financing watchdog Financial Action Task Force (FATF) has published the targeted update on implementation of its Recommendation 15 (R.15) across 98 surveyed jurisdictions and the results are not pretty. With more inbound rules on our VASP RegRadars, we summarise the implications of these latest findings and what to look
The Financial Conduct Authority (FCA) opened “around 600” supervisory cases looking at financial crime between April 2022 and March 2023. That represents a threefold increase in its overall proactive work from the previous year and covers roughly 1% of the authorised population (21,500) subject to Money Laundering Regulations (MLR 2017), a FCA spokesperson said. “It
On June 20, 2023, PJ Di Giammarino, CEO and founder of JWG and Matt Caine, Director of EMEA Financial Markets Communication Compliance at NICE held a discussion on ‘Navigating the Winding Regulatory Road of Communication Compliance’ with a group of Financial Services Compliance and IT experts at the NICE Interactions 2023 conference in London. During
Firms should re-engineer their anti-money laundering (AML) systems and controls to refocus on know-your-customer (KYC) processes to prevent the inevitable pile-up of transaction monitoring alerts. Firms’ pivot to digital onboarding has prioritised speed over collecting enough information to determine whether transactions are suspicious. It has created an inefficient, expensive process where AML analysts are sifting
Trading desks face unprecedented levels of regulatory change from the mechanics of the markets and how they monitor them, to how they interact with customers, the way they de-risk their technology suppliers and provide information to regulators. This article summarises the critical changes and lays out the context for our 22 March virtual trading seminar.
The regulatory spotlight on stablecoins has intensified this month with the Financial Stability Board (FSB) Crypto-asset paper noting[1] that many existing stablecoins still would not meet their recommendations. International risk management principles will be welcomed, but 2023 will be the year that the industry needs to define a better approach to managing compliance in a
The political process by which sanctions are agreed is difficult but the process for implementing them is worse. As a result, sanctions are not nearly as effective a weapon as we would like to think they could be. Ten RegTech building blocks are on the table for discussion – how do we configure a case
The UK Treasury has moved to close a loophole in the Money Laundering Regulations (MLR 2017) that potentially allowed crypto asset firms to bypass the UK’s registration gateway, according to a government document published on June 15. Previously firms could notify the Financial Conduct Authority (FCA) after a change of ownership occurred. Now crypto asset
Criminal networks have eluded Anti Money Laundering and Terrorist Financing (AML/TF) nets for decades. Digital assets have forced policy makers and RegTech providers to rethink the challenge and chart a course towards digitally-native compliance. If the sector engages now, it can reap enormous benefits for digital asset and TradFi compliance. Like a dog that has
The way we look at economic crime risks and controls is changing. Sanctions and other drivers have forced institutions to take a more holistic view of risk disciplines and integrate process that on-board clients, screen their transactions and monitor the marketplace. This policy space is ideally suited for an idea contributed by a late RegTech
As sanctions barriers rise and market access is cut off for a digitized market, AML/TF and Surveillance capabilities need to respond quickly with safe and appropriate RegTech. Join us on 23rd June as 16 market SMEs discuss what this means and what comes next. Register Here In this seminar, leading AML, KYC, Terrorist Financing, Sanctions
Compliance teams can no longer assume that policies which mandate all communication channels are monitored safely behind the firm’s firewall are fit for purpose. Management teams must balance a three legged stool of surveillance policy: generation of alpha in the market, controlling conduct risk, and providing for employees’ wellbeing. In advance of JWG’s 23 June
With sanctions freezing assets and restricting trade, digital compliance strategies are being reworked this year. In this article we explore the impact of putting digital trade barriers in place, which will also be discussed at our 23 June virtual seminar. Register Here 2022 sanctions policy Financial services have seen a significant increase in the number
New European Union rules governing artificial intelligence (AI) will put compliance obligations on automated facial recognition (AFR) used in some regtech applications, particularly client risk screening. UK data privacy and biometrics regulators are also seeking to improve employee monitoring and surveillance camera operation guidance to clarify compliance obligations under local data privacy laws. These efforts,
Can suptech take DeFi to the next level? As technology-driven decentralised finance (or DeFi) grows in popularity and market value, it appears that a battle is brewing between DeFi protocols and regulators. But can technological tools in the hands of regulators head this off at the pass? A reasoned, transitional approach to compliance, along with
By Corrina Stokes RegBeacon illuminates the path for JWG’s third decade It is with pride that we publish the first update from our third decade of working collaboratively to enable better, faster, cheaper and safer regulatory change within Financial Services. It is staggering to step back and look at the breadth of our research agenda. Last year we dove into AML,
By PJ Di Giammarino, CEO JWG Key points: In 2019 JWG tracked 204,469 pages with 60 million words on FS regulatory reform 8 RegTech discussions require senior management attention now and will be debated under Chatham house rule with audience Q&A 6+ regulators, 12+ firms and 8 tech SMEs will debate winning strategies and
By PJ Di Giammarino, CEO JWG and Chair RegTech Council Key points 10 January marked the first day of 5MLD in the EU with new UK procedures announced JWG has been out in front of tough new UBO data quality requirements RegTech offers exciting opportunities to reduce operational pain and increase safety The RegTech Council
As the European Union starts to roll out its Fifth Amendment of the Anti-Money Laundering Directive (AMLD V), financial criminals continue to become more sophisticated and less detectable. With an 18-month transposition period, it is critical for firms to implement the new, more prescriptive rules efficiently and effectively. Join us and 20-plus firms at the
On 19th April 2018, the European Commission, the European Parliament and the Council of the European Union agreed adopted, in plenary, the amendment of the Fourth EU Anti Money Laundering Directive (Fifth EU Anti Money Laundering Directive (AMLD V)). The revised directive concludes two years of negotiations between several stakeholders; and looks to strengthen the
At JWG we are pleased to announce our involvement with the FCA this month at their AML & Financial Crime International TechSprint. This TechSprint will attempt to increase understanding of how to increase the hit rate of detection of $1.6 trillion of illicit proceeds up from 1%. Clearly, there are real benefits to be had!
2018 has started at quite a pace, with running our biggest conference yet, pressing forward with our SIGs and RegTech Council collaboration as well as onboarding new RegDelta clients. Our Q1 message to the industry is that the RegTech agenda is starting to make real progress, however the ‘end’ is still far from sight. In
When 350 senior individuals from more than 65 financial institutions, as well as the vendor and regulatory community, met at this year’s JWG RegTech Capital Market Conference ‘innovation’ was at the top of everyone’s agenda. Perhaps this is not surprising – given the new disruptive technologies being controlled in a fast-changing, and fiercely competitive market.
One of the hot topics at our Capital Markets Conference this year was how RegTech could help institutions with their Know Your Client (KYC) obligations. With an expert panel from a range of backgrounds presenting fascinating perspectives on this current issue, a issues were given fresh attention ranging from artificial intelligence (AI), blockchain, data architecture
Several interconnected global trends have heightened the risk banks face when combating financial crime. First, regulators are continually revising rules as they expand their focus from organised crime to global terrorist networks, many of which have grown more sophisticated in recent years. Second, integrated networks and an increase in cross-border transactions have left gaps in
The past year has been illuminating for the RegTech market, the past twelve months has seen an increase in discussion on the application of technology to regulatory compliance. We have seen action from the regulators, including the FCA’s recent TechSprint in which we at JWG were involved, and major regulatory initiatives, most notably MiFID II,
In Megan Butler’s speech on creating a more effective approach to combatting financial crime, she posed the question “can technology help make your compliance processes slicker, more efficient and more effective?”. For combatting anti-money laundering and developing an effective KYC framework, the answer is a resounding yes. Firms that operate on a global basis will
IMeta, a leading global provider of client data management software and services, today announced it has selected JWG’s RegDelta platform, the leading regulatory change management platform, to provide a full regulatory rule set for the iMeta Client Lifecycle Management platform. JWG’s RegDelta platform allows thousands of pages of detailed operational obligations to be organised, interpreted
Blockchain is not something new to the financial sector. In fact, it’s been around for years. It will be, however, a slow process to integrate it into systems already in place and, as with any disruptive technology, for regulators to assess and mitigate its risks by regulating appropriately. Although the technology isn’t novel, regulators now
Distributed Ledger Technology (DLT) is currently a hot topic for financial services, and with good reason, as banks are looking for efficient solutions to costly and cumbersome regulatory burdens and this is exactly what DLT promises to deliver. One of the key areas where there is clear application for this is in meeting Know Your
JWG are proud to announce that registrations for our second RegTech Conference on 28 February 2017 have topped 300 from over 50 firms, regulators, standards bodies and leading technology companies. After five years and hundreds of articles from our analysts on www.regtechfs.com and 47 special interest group meetings on regulatory implementation in 2016 alone, we
On 19 January 2017, MEPs rejected the European Commission’s blacklist of countries at risk of money laundering and terrorist financing as being ‘too limited’. The rejection suggests that the list should be broader, by including countries that facilitate tax crime, for example. The list from the Commission contained the names of 11 countries, including Afghanistan,
The European Commission proposed on 21 December 2016 to strengthen Europe’s criminal law framework to combat money laundering by drawing on international standards to establish minimum rules for defining criminal offences, imposing sanctions in relation to money laundering and improving cross-border cooperation between Member States. In the press release, Commissioner Avramopoulos stated that this proposal
In the post-Easter week, regulators were busy shining a spotlight on remuneration practices in the industry. We saw the EBA releasing a report looking at the high earners in EU banks and ESMA focusing on sound remuneration policies under the UCITS Directive and AIFMD. The FSB also met in Tokyo to discuss their priorities for
FinCEN’s proposed rules on beneficial ownership due diligence, the incoming 4th Money Laundering Directive (AMLD IV) and now the UK’s Register of People with Significant Control (PSC) Regulation all push for more transparency in beneficial ownership or significant control of companies. The aim is to reduce acts of money laundering and tax evasion and to
This week, the EU commission published the responses to their call for information on the impact of EU regulation so far. The FCA’s response, also published this week, has been similar to other feedback in citing the constraints on both the banks and the real economy of financing themselves, overly complex reporting obligations and spill-over
Following the announcement of a landmark deal on international cooperation over tax avoidance last week, Tuesday saw the signing of a transatlantic pact on data transfer. Even when the EU are in the process of stocktaking the cumulative effects of regulation so far, there is clearly no break in the ongoing pace of financial markets
After a long week at Davos, there are a number of interesting conclusions from this year’s World Economic Forum. China appears to have come out less of a worry than it was when it went in, with the IMF’s Christine Lagarde stating that the country is going through a transitional stage towards sustainable growth, and
FATF updates – renewing effort to tackle terrorism A special three-session meeting to discuss tackling terrorist financing was organised by the Financial Action Task Force in reaction to the atrocities that have taken place in the last few months. Whilst the agenda focused on broader ways to tackle terrorist financing, the Islamic State of Iraq
Over the last week, regulators have been signalling that they will not be tolerating risky or illegal finance in 2016 any more than in the previous year. Margin requirements are back on the table, along with bankers’ remuneration and fines – plenty of fines. Despite this, the inquiry into the UK FCA’s scrapped banking review
The UK, EU and the Financial Action Task force have promoted banks to adopt and implement a measured approach to de-risking clients that pose money laundering and financial crime risks. The central message has been for financial institutions to manage money laundering risks and to cease relationships with clients as a last resort. But, the
AMLD IV has placed emphasis on a risk-based approach to counter financial crime and terrorist financing. Few would argue against this approach. It is not only logical, but also the most practical way forward. The approach appears to be fairly straightforward, consisting of identification, assessment and management risk. However, recent news, analysis and conversation with
JWG analysis. Over the last 10 months, JWG’s CDMG has covered – in depth – the incoming Anti-Money Laundering Directive IV (AMLD IV). AMLD IV focuses on the risk profiles of clients and monitoring or reporting them accordingly. On 21 October, ESMA published a Joint Consultation Paper on simplified and enhanced due diligence, detailing the
JWG analysis. Last week we wrote about thwarting financial crime through suspicious transaction reports (STRs) in the UK, and the Financial Conduct Authority’s (FCA) concern over the integrity, accuracy and coverage of STRs. On the other side of the Atlantic, FinCEN is proposing to extend their anti-money laundering (AML) regime to investment advisers. Closing
JWG analysis. Since 2008, regulators have been plugging the gaps revealed by the global financial crisis and have just put another brick in the financial services wall – the 4th Money Laundering Directive. Last month, the much anticipated ‘IV’ was published in the official journal and will become the law of the land in 2
JWG analysis. JWG’s recent analysis report, the MiFID II KYC mountain, finds that financial institutions have a 12-item checklist to work through for their MiFID II KYC implementation due to the requirement for firms operating in the EU to acquire, document and agree much more information about their customer’s situation and their transacted business by
JWG analysis. Firms have plenty of planes in the air right now. The regulatory pressure on firms to ‘get KYC right’ in the form of new financial crime regulation, such as FATCA or AMLD IV, and huge fines means they will need to juggle these changes amidst an ongoing regulatory implementation effort. How you need
JWG analysis. Regulations like FATCA, EMIR and Dodd-Frank have asked us to collect more information on our customers than ever before – but now it’s clear that was just the start of the story. New regulation finds regulators even hungrier for information on the firm’s relationship with its customer, together with details of how information
JWG analysis. The idea of KYC compliance has traditionally been associated with AML, PEP checks and international sanctions, however the new wave of regulations that is to begin rolling out in 2015 will place a whole new set of pressures on businesses to ‘know their clients’. Rachel Wolcott, writing for Accelus’ Compliance Complete, has highlighted
JWG analysis. The European Parliament recently published (here) the latest amended text of the proposed 4th Anti-Money Laundering Directive (AMLD IV), which includes measures to help simplify the way firms conduct KYC today, and adds weight to the KYC utility business model by requiring the industry to maintain accurate and timely data on beneficial ownership.
JWG analysis. According to the notice released on Thursday, the FCA has fined Standard Bank £7,640,400 for failings in its AML systems and controls relating to its treatment of corporate customers connected to politically exposed persons (PEPs). This notice is particularly relevant given that the FSA’s thematic reviews in 2010 found that “more than a
JWG analysis. The new political drive towards tax transparency is landing in money laundering legislation, and complicating an already complex landscape. G8 Leaders, as a result of the summit held in June last year, committed to publishing ‘action plans’ setting out the concrete steps they will take to combat tax evasion. It appears that those
This time next year, the market is going to be a very different place. No-one knows the complete, consolidated impact of regulation on the market, and many of the parts are still in motion, but the core structure is starting to take shape. In Europe, our research tells us that most institutions are opening 2014
2012 could well go down as a turning point for the industry. Billions in fines have raised consciousness of the need for better financial crime processes, systems and controls. Regulators have found sanctions breaches, anti-money laundering deficiencies and bribery failures – and will likely to continue to do so as they examine historical compliance. We
When the G20 first revealed its plans in April 2009, the scale and scope of new reforms was all encompassing. Now, we are seeing how serious the regulatory community is about them. The battle to know your customer provides a first glimpse of just how seriously the industry will take the new reforms. At the