Uplifting sanctions/export controls and breaking anonymity
A Canadian national and a New York resident pleaded guilty this week to conspiracy to commit export control violations for their roles in a global procurement scheme on behalf of sanctioned Russian companies. Some of the electronic components shipped by the defendants were later found in seized Russian weapons platforms and signals intelligence equipment in Ukraine. According to the court documents, the defendants allegedly conspired to ship more than $7 million in dual-use US electronics to sanctioned Russian companies, shipping the components through front companies in several countries, including Turkey, India, China, and the United Arab Emirate, from where they were subsequently rerouted to Russia. As this and other similar cases highlight, sanctioned parties and organized criminal networks are growing more sophisticated and aligned in their techniques every day. 🔦 Breaking anonymity and overcoming obfuscation remains critical The illicit usage of Shell/Front Companies, transactions and shipments to non-sanctioned countries and entities, the presence of underlying collusion etc. have all made risk management in this space increasingly difficult. This has put an unnecessary burden on frequently separate investigation and analyst teams within financial institutions to gather data and make the connections. However, by bringing together internal and external KYC, AML and Sanctions data, intelligence and processes, Quantexa enables the comprehensive contextual monitoring of customers and counterparties throughout their entire lifecycle. This allows institutions to better identify and manage holisticrisk, inclusive of sanctions and the presence of evasion techniques, including the illicit usage of shell companies, professional enablers and gatekeepers. To see how technology, combined with better data sources and focused typologies have changed the way institutions can break through the anonymity so essential for sanctions risk management, please reach out or take a look at the below. ➡Breaking Anonymity Through AI: Sanctions, Shell Companies and Scandals (webinar on-demand) ➡Navigating Secondary Sanctions Risk: The Heightened Need to Mitigate Indirect Exposure (blog) ➡New FinCEN Advisory: Counter the Financing of Iran-Backed Terrorist Organizations (blog) ➡Navigating Global Sanctions: Technology Solutions for Asia-Pacific Compliance Challenges (blog)
Entity Resolution as the Secret Ingredient to transforming risk and compliance with Perpetual KYC
Join us for a short Fireside Chat session addressing some fundamental questions about the importance of ER as part of a pKYC transformation: Overarching topic: How to cut through the noise of event detection and maximizing pKYC?Leveraging Entity Resolution to drive efficiencies and effectiveness in KYC operations Step 1: Narrow down to what is relevant: resolve different data sets with the customer base Step 2: Detect what is meaningful and cut out the noise Step 3: Enrich an event by connecting the change to multiple data sets Step 4: Apply materiality - automate bank procedure policy Step 5: Identify risk and contextualize risk scoring You can also read our Blog!Transforming Risk and Compliance with Perpetual KYC: Entity Resolution as the Secret Ingredient
In recent years, how to transform Know Your Customer (KYC) processes has been a hot topic of discussion. There is a growing interest in finding ways to reduce costs whilst maintaining a strong awareness of customer risk and a stellar customer experience. Advanced solutions have emerged in in the form of perpetual or event-based KYC (pKYC), which involve continuously monitoring key KYC information to maintain an up-to-date customer profile between periodic reviews. Perpetual KYC can provide a more accurate view of customer risk as it evolves and reduce the workload of periodic refreshes. Many financial institutions are currently in the midst of transforming or considering ways to change to a more manageable and reliable KYC process. However, the transition is not so straightforward. There are many ways to approach the problem and institutions often still ponder whether perpetual KYC can be achieved and whether it really makes KYC and due diligence more effective. So, how can institutions ensure they are building the most advanced technical foundations critical for detecting and managing change events and maximizing their transformation to pKYC? Cutting through the noise When considering a change to an event-driven KYC model, first-line operational teams must feel comfortable with managing the imminent backlog of data-driven triggers, bearing in mind that they will lead to substantial efficiency gains versus existing periodic processes. Inasmuch as many financial institutions leverage multiple data sources within their KYC processes, it can feel overwhelming to consider the continuous or accelerated monitoring of such sources for KYC. This is why the right technology is critical for understanding the data changes that are relevant to the customer base and the changes that are really meaningful. Some institutions can detect around one million changes per day just in external data. However, effectively cutting through the noise begins with the ability to resolve different data sources together with the customer records to ensure that only changes relevant to the customer base advance. Additionally, properly understanding the data and automatically determining meaningful data changes contributes greatly to reducing the noise in the pKYC process. For example, without proper entity resolution capabilities, a format change for an address could be considered a trigger event to be processed, but in reality, it is the same address that can be suppressed or pushed for a straight-through update. Prioritizing effectively After targeting relevant and meaningful changes, the next step, when possible, is to automatically assign the appropriate treatment for consequential events. To define the materiality, bank logic driven from policies and procedures is applied to inspect the change and determine if it is a material change that requires analyst actions or can be processed straight-through into the customer record. Using entity resolution creates a holistic view around the customer and facilitates a clearer understanding of whether multiple material or non-material changes are happening. It also helps to create a holistic view of a specific trigger by resolving against other data points and exposing additional information and connections which can help with risk identification and treatment efficiency. For example, the previously detected new address can be defined as a non-material change based on the low-risk nature of the country it is registered to; though when linked to other data points, it reveals connections with riskier indicators such as businesses flagged for tax evasion. Risk scoring can then be applied to the event and the customer network to optimize the treatment routing and operational action required. Making the leap to pKYC By taking a systematic approach - applying entity resolution, network analysis, materiality and risk scoring -organizations can confidently detect relevant events and more effectively coordinate the most appropriate treatment. This reduces the amount of work for analysts by focusing their time on material and risky changes that require a judgment decision whilst leveraging a much more up-to-date view of the client and the risk they pose. In conclusion, moving to a perpetual or event-based KYC process is more than just building technology to continuously look for a new piece of information from corporate registry data providers. It requires employing the most advanced technologies at the foundation of the process. When done well, it is helping financial institutions drive a sustainable transformation of their KYC operations. By leveraging entity resolution, organizations will bolster the groundwork of the process and maximize the longstanding benefits of perpetual KYC. Don't miss our short Fireside Chat session addressing some fundamental questions about the importance of ER as part of a pKYC transformation. What do you believe are other core ingredients for a successful pKYC transformation?
NextWave and Quantexa - Discuss KYC and why it's so important!
Please take the time to listen to this valuable Partner interview by Outlook Series, Michael Lippis, Tony Clark, NextWave and Alexon Bell, Quantexa on Decision Intelligence and Supply Chain Transformation. Knowing your customer (KYC) has never been more important. To gain an edge, you need improved operational efficiency, agility and speed, better threat protection, and enhanced customer experiences. However, processes are often periodic and do not provide a near real time, complete and dynamic view. Evolving regulations, tight budgets, and changing client behaviors have prompted the need for advanced technologies to improve current methods and provide detailed insight into both high and low risk customers. Unfortunately, current KYC approaches still largely rely on manual data captured from multiple systems. These inefficiencies and increasing regulatory requirements are directly affecting the need for a more advanced and technologically led approach. Consequently, leading firms are leveraging financial industry expertise combined with Decision Intelligence Technology to bring context to billions of records, faster. Bridging the data decision gap enables your understanding of customers, ecosystems and supply chains.Listen to ABN AMRO, BNY and HSBC talk all things KYC and transformation
As the pKYC transformation topic is still top of mind for most FIs, we have asked three banks to talk to us about their journey and how they are approaching the future of due diligence. Listen to the webinar here: [Webinar] KYC _ Transforming approaches with new technologies - with ABN AMRO, BNY Mellon & HSBC.mp4 [Webinar] KYC _ Transforming approaches with new technologies - with ABN AMRO, BNY Mellon & HSBC.mp4 How are you approaching the transformation? Do you agree with our panellists?Upcoming Webinar on Unlocking the Power of pKYC: Dec 5th & 7th (EMEA & APAC)
Join Quantexa’s Delphine Masquelier, Thomas McNally and Carl Ottman for two webinars that demystify the pKYC transformation journey. We'll share insights gained from real-world pKYC deployments, representing some of the earliest implementations. Register here: https://community.quantexa.com/events/115-unlocking-the-power-of-pkyc-smarter-kyc-processes-emea https://community.quantexa.com/events/114-unlocking-the-power-of-pkyc-smarter-kyc-processes-apacWork your way through an Enhanced Due Diligence use case in Quantexa's AML Investigator course
Just like AML investigators, analysts specialised in Enhanced Due Diligence (EDD) cases are required to master the art of detecting the risk within a customer's profile or activity. This program teaches individuals how to combine many of the key components of the Quantexa platform that they have learnt about in the Quantexa Foundations program in such a way as to facilitate their ability to conduct an EDD themed Investigation. (Duration: 4 days) Having completed the program, learners will understand the relevant core concepts and how to use the key UI components of the Quantexa platform based on a Know Your Customer (KYC) use case. Modules include: Quantexa User Foundations Program - Introduces the core concepts of our platform, including Networks, Documents, Entities, and Entity Resolution. This Program also introduces Search, Investigation and Task components of the Quantexa platform’s UI. Quantexa Investigations Series: AML Investigator - Teaches how to combine many of the key components of the Quantexa platform that you have learnt about in the Quantexa Foundations program in such a way as to facilitate your ability to conduct an AML or EDD themed Investigation. Outcome: On successful completion of the program and its associated Knowledge Check, learners will be awarded the Quantexa Investigations Series: AML Investigator completion badge. Read more about the courses we offer and how to sign up in our Introduction to Quantexa Education Services and the Quantexa Academy For more Financial Crime updates, discussions, and events why not join our Financial Crime User Group?
Join the Conversation: Highlights from Solution & Industry User Groups 💬
Did you miss out on the latest discussions in our Financial Crime, Insurance, KYC and Data Management Specialist User Groups? Here's what you might have missed: Join a group to stay up to date: 💵 Financial Crime 🛡️ Insurance 🙋♀️ KYC - Know Your Customer 💻 Data ManagementNew blog on various journeys to KYC transformation - tell us how you are approaching it!
While there is no "one-size-fits-all" journey to pKYC, the same foundations are critical to success for banks. Discover our latest blog on 'Pathways to pKYC: Different Journeys, Same Foundations' and let us know how you are intending to take on this transformation. https://www.quantexa.com/blog/pathways-to-pkyc/Perspective: Addressing SEC-Identified AML Program Deficiencies at Broker-Dealers
In this article, analyses and highlights key themes in AML compliance shortcomings identified in a July 2023 Risk Alert published by the U.S. Securities and Exchange Commission (SEC) Division of Examinations. The article goes on to explore the meaning of a 360° Client View and how you can use Quantexa's KYC offering to create and maintain a 360° view of clients using internal and external data, support robust due diligence and provide accurate and timely information to maintain up-to-date profiles and an informed view of client risk. Read the article in our Community Library: Perspective: Addressing SEC-Identified AML Program Deficiencies at Broker-Dealers Don't forget to leave questions or comments for Andrea below!
