The EU has issued a number of directives in recent years as it looks to tackle money laundering and terrorism financing. Some of these regulations have been quite challenging for some players in the financial services sector to comply yet even so, it’s not something negotiable. Compliance is seen as a big step in anti money laundering and the development of advanced transaction monitoring systems and data analytics tools is helping financial companies leverage on technology to meet regulatory obligation. But what are these rules anyway? After all, you can comply with what you don’t know. Here is a breakdown of money laundering regulations for 2017:
Risk Assessment and Review
Each PSP or financial service provider must have a risk assessment strategy. The policy must be written in paper and delivered with relevant authorities. Changes in such policies must also be reported. This rule is designed to help banks and financial institutions to take charge of their compliance. It is aimed at creating customized anti money laundering solutions that are adaptive to the unique threats each player in the financial sector plays.
Politically Exposed Persons
Players in the financial industry must also keep a list of politically exposed persons and monitor their transactions as effectively as possible. The definition of PEPs has clearly been given by the EU. However, individual countries may have their own definitions plus additional conditions that must be considered in categorizing customers as potential PEPs. All these regulations must be followed. There has to be a verifiable KYC screening system that ensures no one is missed.
Transaction Compliance Monitoring
Financial service providers must have effective trade monitoring systems that monitor transactions on a real time basis. These systems are designed to detect and flag any potential malpractice in the transfer of funds within these institutions. There are two options when it comes to transaction monitoring. Financial service providers can either leverage on internal systems or they can purchase third party transaction monitoring solutions from third party companies. The latter is often seen as the best solution. This is because there are notable transactions monitoring companies that have created advanced and high quality transaction monitoring systems that have the ability to detect and flag any transaction that is in violation of EU rules. This is quite important because it ensures the risk factors are significantly reduced.
Why Aml Solutions
Regulations like this by the EU are aimed at helping firms keep up with the changing threats in financial crime and fraud. Having an effective aml solution is important in avoiding devastating cases of reputation damage especially among financial services firms. Its also an important strategy that can help increase customer confidence and reduce loses that may arise from fraud.
The EU rules on anti money laundering will be here for a long time. It is the job of players in the financial industry to comply and with Trapets compliance monitoring and surveillance systems, you can get the edge today. Visit the company today for more details.