Governance, Risk & Compliance

Challenged with “Know Your Customer” regulations?

The heightened focus of regulators on KYC policies has added significantly to the administrative burden faced by financial institutions and their clients, resulting in increased workloads, sky-rocked costs and longer delays for organizations attempting to access funds. Our recent thought leadership article discusses this topic further including the evolving KYC landscape and managing customer due diligence.

To help customers comply and avoid the challenges they currently face, we have developed an innovative industry wide solution: Accelus Org ID. This is a managed service offering which provides financial institutions and end clients with a global, independent and trusted solution.  Find out more about Accelus Org ID.

Know Your Customer

Compliance: Now it’s getting personal


We may be on the brink of a new era in compliance – or at least in enforcement. This week the Bank of England Governor Mark Carney earned headlines around the world when he suggested that individuals’ base pay as well as their bonuses could be at risk if they failed to act properly. And he was not alone as other regulators and policymakers publicly voiced whether the current regulatory curbs were actually succeeding in improving behaviors in financial services.

We know that financial fines are getting bigger. In 2013, the UK regulator issued fines some 18 times greater than its predecessor had in 2008 – but that is by no means the whole story. Our survey on the rising costs of non-compliance – published this week – highlights the increased focus among regulators on greater accountability and personal liability for the individuals involved in compliance breaches. Enforcement cases now routinely see the departure of senior executives and the clawing back of any recent bonuses. In market abuse cases individuals rightly face prison sentences.

The pressure is on compliance departments, therefore, to keep their businesses – and their bosses – on the right side of their regulators, certainly, and where possible to future-proof their business activities by monitoring and anticipating the latest thinking among the world’s regulators. (more…)

American Express recruits college students to bolster anti-money laundering ranks

With qualified anti-money laundering professionals in short supply and reciprocal poaching of talent the norm at U.S. financial services firms, American Express Co has begun recruiting university students to fill its junior ranks straight out of college, a senior compliance executive with the company said last week at a compliance conference in Washington.

American Express has developed a successful program that involves hiring graduates as entry-level analysts to do account-monitoring work and training and developing them to do more in an effort to ”manage the expertise drain,” said Rick Small, a senior vice president who heads enterprise anti-money laundering, anti-corruption and international regulatory compliance. (more…)

Need for focused and consistent enforcement drove IRS decision to stop seizing ‘structured’ deposits, official says

The Internal Revenue Service’s recent decision to stop using civil enforcement powers to seize legitimate money deposited into bank accounts in a clandestine manner stemmed from a review process that revealed a need to make better use of agents’ time, the law enforcement official who enacted the new policy said Sunday at a money laundering conference in Washington.

Richard Weber, chief of the Internal Revenue Service – Criminal Investigation (IRS-CI) said that “many, many months ago” he launched a review of agents who pour through so-called Suspicious Activity Reports (SARs) filed by banks to see if the agents were spending their time wisely. He disputed speculation that the policy change came in response to a New York Times report on the agency’s seizure practices.  (more…)

New IRS enforcement policy ignites debate on value of bank ‘structuring’ reports

REUTERS/Larry Downing

An announcement by the Internal Revenue Service last week that it will no longer try to seize and forfeit money from those who merely evade government-mandated paperwork when making large cash deposits has ignited a debate about the value of bank efforts to document such acts.

Some bankers believe it would be wise to spend less time completing reports on established customers who deal in cash – and those who side-step such paperwork – and instead focus on rooting-out more nefarious criminals, said Rob Rowe, a lawyer with the American Bankers Association (ABA), a trade group.  (more…)

Whistleblowing protection for compliance officers still unsettled, experts say

”If liberty means anything at all, it means the right to tell people what they do not want to hear,” George Orwell told readers in Animal Farm, his parable of totalitarianism and centralized control.

This level of liberty is just as important in the monitoring of business as government, and it may be just as unwanted as in Orwell’s novel of a brave soul fighting overwhelming control, Jennifer Pacella, a law professor at Baruch College in New York City, said Tuesday. (more…)

U.S. leads the pack in monitoring shadow bank sector; IMF report shows how

REUTERS/Toru Hanai

The United States effort to begin reining in the risks from shadow banking was recognized by the International Monetary Fund in a recent report as being ahead of the curve, and parts of it could serve as a model for other countries.

U.S. regulators have, compared to their peers, taken preventative measures because of ”the measurable contribution of shadow banking to systemic risk in the financial system in the United States,” the report said.  (more…)

U.S. agents scramble to grasp how Mexican cartels launder money via L.A. fashion district

Federal agents hope documents and electronic data seized during raids on the Los Angeles fashion district last month and cash-transaction reports that businesses in the zone are now required to file will help clarify how Mexico’s drug cartels are using international trade to launder money, law enforcement sources say.

The ability to generate new intelligence from documents and human sources may well dictate – at least in the short term – the degree to which U.S. authorities can effectively combat Mexican cartels by hitting them in their pocketbooks.  (more…)

Global board communications in 2014

This past August, Thomson Reuters Accelus invited corporate secretaries to participate in a global survey on some of the key challenges faced by the board today. Download this report and infographic for a current view of the boards’ information workflow, communications and operations.

The Evolving Role of the Global Board

Federal Insurance Office: 7 years later U.S. insurance industry is resilient, but concerns remain


The Federal Insurance Office (FIO), tasked in 2010 by Congress under the Dodd-Frank Wall Street Reform and Consumer Protection Act to monitor all aspects of the insurance sector, released its second annual report on the state of the industry. The verdict: U.S. insurers have shown financial “resilience,” especially when compared to the economic crisis in 2007 which nearly took down insurance giant AIG.

The numbers reinforce the FIO’s analysis. Net premiums in 2013 for property and casualty (P/C) insurers were at a healthy $481 billion, compared to $583 billion for life and health (L/H) insurers. Performances from separate accounts, lower catastrophe losses, market value increases (insurance stocks have outperformed the S&P 500 in recent years), and book value increases (both P/C and L/H insurers are now valued at a premium to their actual asset values) have all contributed to the industry recovery.