By Dan Byrne for AMLi
COLLABORATION IS THE ONLY answer for many fintech companies trying to comply with AML regulations, according to an industry expert.
John Cusack, Chair of the Global Coalition to Fight Financial Crime, has stressed that achieving a meaningful fight against dirty money requires fintech companies to work alongside competitors and public sector organisations – enabling vital information to be shared where needed.
“And if there is no model of collaboration which suits your business,” he added. “Come up with your own.”
Cusack delivered his remarks at the opening of the virtual, week-long FFECON – organised by the FinTech FinCrime Exchange. He spoke alongside other top experts in the field of AML worldwide.
“The companies that don’t want to collaborate fall into two categories,” he said. “The first is companies that have nothing to share – which means they are ‘working in the shadows’ and need to get wise quick.”
“The second are those that think they know everything already,” he said, adding that this is never truly the case that it was vital for information to be shared no matter the circumstances.
Cusack cautioned fintech companies – especially those that are new – against falling into the trap of assuming collaboration doesn’t apply to them. He said this was a common train of thought to adopt; companied would dismiss compliance because, as a startup, they just aren’t ready for it.
“Ask yourself, how confident are you that you have identified a truly high-risk customer, especially amongst those disguising themselves as non-high risk,” he told the conference. “And don’t be afraid to innovate.”
The collaborative effort – and the principle of sharing information between different bodies – has become a key topic in the global debate of how to accurately refine AML frameworks.
There has been a huge uptake on sharing information from private entities to public bodies – frequently in the form of suspicious activity reports (SARs) – but Cusack was quick to note flaws with these documents.
“We have been successful if you measure the number of SARs that are filed across the world, but some of this information is not very good,” he explained.
He called for a bigger focus on sharing through a private-to-private information channel, alongside a private-to-public one.
“We would like to see more of this,” Cusack said. “But we must not get ahead of ourselves or be overly ambitious.”
“We shouldn’t get ourselves into the mess that we have with SARs, where we have information we don’t want, can’t use, with only 10% being worthy. Let’s not get into that in the private sector.”
Although the calls for more collaboration are strong, so too have the calls for privacy to be protected in line with tight GDPR regulations.
Jonathan Draper, head of product development at Comply Advantage has said that finding the balance between these two principles is a task which stands out.
“There are plenty of ways of dealing with other issues, but this is most challenging,” he told the conference, but stressed that his line of work has already seen practices begin to tackle it.
“There are processes which are up and running, organisations are sharing information,” he said. “But we are making sure to minimise the information share to comply with GDPR. Overall, it makes more sense to share something which indicates the need for further work.”
Share this on:
Follow us on:
We hope you enjoyed reading this article
If you would like unlimited access to AML Intelligence premium articles, newsletter delivered twice a week, access to our Global Bank Fines and Penalties database, free access to Boardroom Series events and much more, select one of our subscription options and become a subscriber!
