role in the context of asia’s aml/cft compliance regime...culture of compliance risk...
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Role in the Context of Asia’s AML/CFT Compliance Regime
Shirish Pathak
Managing Director
Fintelekt Advisory Services
35th ABA General Meeting and Conference
November 15-16, 2018
Kurumba, Maldives
Agenda
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Setting the Context
Global Trends and Regional Risks
Role of Fintelekt in Uniting Stakeholders
Ensuring Better AML/CFT Compliance
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FATF High Risk Jurisdictions
Strategic
Deficiencies:
The Bahamas
Botswana
Ethiopia
Ghana
Pakistan
Serbia
Sri Lanka
Syria
Trinidad & Tobago
Tunisia
Yemen
High Risk:
Iran
North Korea
As on October 19, 2018
Regulatory Focus Increasing in Coverage and Depth
Copyright @2018 Fintelekt Advisory ServicesSources: Fintelekt research based on published news sources
PH
ILIP
PIN
ES •Stricter registration and reporting guidelines to improve quality and usefulness of STRs
NEW
ZEA
LAN
D •Law firms, banks and financial entities to file threshold based reports on cash transactions and international wire transfers
IND
ON
ESIA Corporate transparency
standards require all companies to regularly disclose their true, beneficial owners – not just their legal representatives – to authorities
MA
LAYS
IA Regulatory parameters for the conduct of electronic KYC (e-KYC) processes for remittance transactions SR
I LA
NK
A •CDD rules for finance companies & DNFPBs
NEP
AL Co-operatives sector
brought under the ambit of the AML Act
Personal Liability Compliance Budgets
The Economic Impact of a Weak AML/CFT Regime
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Disruption of the fund flow• Impact on forex reserves
Negative financial system reputation• Loss of CBRs/ de-risking
Worsened income distribution• Setback to financial
inclusion
Promotion of underground economies• Impact on terrorist financing
Perception of Asia on AML Maturity Indicators
Country Basel AML Index Rank
(2018)
Corruption Perception Index
(2017)
Philippines 43 111
Malaysia 57 62
Indonesia 52 96
Vietnam 10 107
India 68 81
Bangladesh 51 143
Pakistan 25 91
Sri Lanka NA 122
Top AML Risks for Banks in Asia
Copyright @2018 Fintelekt Advisory ServicesSource: Country level surveys conducted by Fintelekt in 2017-18
Philippines
• Understanding the sources of customers’ funds
• Trade-based money laundering activities
• Cybercrime
Vietnam
• Monitoring customers that transact across several lines of business
• Understanding the sources of customers’ funds
• Fraud
India
• Trade-based money laundering activities
• Ultimate Beneficial Ownership identification
• Terrorist financing
Sri Lanka
• Understanding beneficial ownership
• Understanding the sources of customers’ funds
• Trade-based money laundering activities
Bangladesh
• Trade-based money laundering activities
• Understanding the sources of customers’ funds
• Monitoring customers that transact across several lines of business
Nepal
• Understanding the sources of customers’ funds
• Understanding beneficial ownership
• Trade-based money laundering activities
Industry Associations
FIU / Regulators / Law Enforcement Agencies
Uniting Stakeholders across the Region
Research and Advisory
Training – Basic & Advanced
Summits, Briefings & Roundtables
AML
CFT
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How Can Banks Ensure Better AML/CFT Compliance?
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Governance
•Tone from the top critical to building a culture of compliance
Risk Identification & Assessment
•Thorough risk assessment and accurate risk quantification
Training
•Continuous training and awareness generation among all employees
Technology
•Sophisticated technology capable of red flagging the latest criminal typologies
Elements of a sustainable AML compliance environment
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Have You Seen This Movie?
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Do We Still Remember?
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“In aviation, every rule that we have, everything we know, every procedure we use, we know because
someone, or often many people, died.
We have learned important safety lessons purchased at great cost, sometimes literally bought
in blood.
We have an obligation not to forget these lessonsand have to re-learn them.”
Aviation and AML … What’s Similar?
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“Are we, as responsible bankers,
addressing AML/CFT in the right spirit,
or as a tick mark item?”
Are We Seeing the Bigger Picture?
THANK YOU
Mobile: +91 90110 11122
Email: [email protected]
35th ABA General Meeting and Conference
November 15-16, 2018
Kurumba, Maldives