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Stepping Up Your AML Practices in 2023

Stepping Up Your AML Practices in 2023

by | Dec 30, 2022 | Blog, KYC - Know Your Customer

Stepping Up Your AML Practices in 2023

As we ease into 2023 and reflect on the ever-evolving world of digital security, there’s no denying that fraudsters have become incredibly advanced in their approach—an estimated 90% of money laundering crimes still go undetected—making AML protocols more important than ever.

Anti-Money Laundering (AML) protocols and software have become essential in order for organizations to stay compliant with complex legislation, protect sensitive data (for both businesses and stakeholders), and streamline operations. Partnering with a robust AML software provider like iComplyKYC is one of the best ways to protect your organization and avoid costly fines from regulators while also ensuring you have the resources needed to quickly access vital information that you can trust.

Below, we’ll take a closer look at the core components that inform a strong AML process, as well as the benefit of partnering with a vetted software provider like iComplyKYC. Read on to learn more!

What Do AML Protocols Do?

The core mission statement of anti-money laundering programs and protocols lies in their name: to stop fraudulent practices and criminals from infiltrating our business practices and reduce the global harm caused by such activities in the process. Money laundering may seem like a “victimless” crime, but the reality is it has ties to much darker practices like human trafficking, terrorist funding, the drug trade, and more.

With the right protocols and practices in place, your organization can significantly lower the risk of unintentionally partnering with fraudsters, as well as be able to (re)evaluate your business relationships to build adequate risk profiles for all clients. Standard AML components include:

KYC Protocols

Know Your Customer (KYC) protocols are a must for modern businesses, from both a compliance and an operational standpoint. Having integrated tools and programs that make it easy to identify, verify, and screen prospective employees, clients (existing and new), and other individuals your company interacts with helps remove any unnecessary and often unpleasant mysteries—allowing you to securely maintain your day-to-day operations.

Customer Due Diligence (CDD)/Enhanced Due Diligence (EDD)

Similar to KYC, both CDD and EDD are dedicated to digging a little deeper and getting to know the specifics about who you’re interacting with. From previous risk factors like known associates and ties to illegal operations to current beneficial points of partnership, being able to go below the surface of your customers’ data with ease is essential to building trust with your client base while also protecting your organization from unwanted risks and penalties.

Name Screening

How do you know that the “John Smith” you’re evaluating is the same “John Smith” you need to verify? Integrated name and identity screening is a core component of AML protocols, allowing you to mitigate the challenges of false positives and accurately assign details to new individuals and entities as needed.

Transaction Monitoring

Catch potential risks before they can evolve into active problems by monitoring key transactions and having dedicated living documentation that is consistently updated. Routinely monitoring and vetting transactions is not only required by AML standards but also enables the ability to quickly spot potential identity theft or fraudulent transactions as soon as possible. Transaction monitoring is crucial for protection and efficiency and is a vital part of any AML process.

Suspicious Activity Monitoring

Finally, AML regulation requires the reporting of any activities deemed illicit or suspicious. While manual review and implementation can make it difficult to maintain updated records of client information, having a dedicated program like iComplyKYC in place can make it simple to uphold your end of the law, all while staying on top of crucial data updates necessary for the integrity and success of your business.

Though many of these general AML practices continue to be human led and initiated across the workforce, many leaders in the financial, technology, and securities sectors have come to realize that having automated and trusted software is a far more reliable (not to mention convenient) form of protection.

End-to-End AML Solutions With iComplyKYC

At iComply, we know the value of proven AML protocols and processes. Our award-winning, truly end-to-end KYC + KYB platform makes sure your business has all jurisdictional requirements covered—with the help of our modular suite of KYC products, streamlining your identification and security processes is simple. As one of the most versatile, efficient, and dependable solutions on the market, iComplyKYC is your leading choice for AML software, as well as all your KYC needs.

Book a demo with our team today to learn more about iComply’s AML solutions and discover how our platform can support the needs of your business or organization.

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Is your AML compliance too expensive, time-consuming, or ineffective?

iComply enables financial services providers to reduce costs, risk, and complexity and improve staff capacity, effectiveness, and customer experience.

Request a demo today.

Q3 2022 Regulatory Updates

Q3 2022 Regulatory Updates

by | Oct 12, 2022 | Compliance Updates, iComply Insights

Q3 2022 Regulatory Updates

Regulatory Actions and Updates from Around the Globe


Enforcement Highlights – Q3 2022

 

United States: 

  • The Securities and Exchange Commission (SEC) announced fraud charges against Equitable Financial Life Insurance Company for providing account statements to approximately 1.4 million variable annuity investors that included materially misleading statements and omissions concerning investor fees. Their penalty is $50 million.
  • The SEC announced charges against Health Insurance Innovations (HII) and its former CEO Gavin Southwell for concealing extensive consumer complaints about short-term and limited health insurance products HII offered.
  • The SEC announced insider trading charges against Ishan Wahi, a former Coinbase product manager, his brother, and his friend for perpetrating a scheme to trade ahead of multiple announcements regarding certain crypto assets that would be made available for trading on the Coinbase platform
  • The SEC filed insider trading charges against Stephen Buyer, a former U.S. Representative for Indiana’s 4th Congressional District. According to the SEC’s complaint, Stephen Buyer formed a consulting firm, Stephen Buyer Group, which provided services to T-Mobile and other clients. In March 2018, Buyer attended a golf outing with a T-Mobile executive, from whom he learned about the company’s then nonpublic plan to acquire Sprint. Buyer began purchasing Sprint securities the next day, and, ahead of the merger announcement, he acquired a total of $568,000 of Sprint common stock in his own personal accounts, a joint account with his cousin, and an acquaintance’s account.
  • The SEC separately charged J.P. Morgan Securities LLC, UBS Financial Services Inc., and TradeStation Securities, Inc. for deficiencies in their respective programs to prevent customer identity theft, in violation of the SEC’s Identity Theft Red Flags Rule (Regulation S-ID).
  • The SEC charged 11 individuals for their roles in creating and promoting Forsage, a fraudulent crypto pyramid and ponzi scheme that raised more than USD $300 Million from millions of retail investors worldwide, including in the United States. Those charged include the four founders of Forsage, who were last known to be living in Russia, the Republic of Georgia, and Indonesia, as well as three U.S.-based promoters engaged by the founders to endorse Forsage on its website and social media platforms, and several members of the so-called Crypto Crusaders—the largest promotional group for the scheme that operated in the United States from at least five different states.
  • The SEC charged Global Business Development and Consulting Corp. (Global) and its owner, Anthony J. Mastroianni, Jr., in connection with a $1.2 million fraudulent promissory note scheme targeting older Americans.
  • The SEC charged Granite Construction, Incorporated and its former Senior Vice President, Dale Swanberg, with fraud for inflating the financial performance of the major subdivision Swanberg managed. In 2021, Granite restated its financial statements from 2017 through 2019 to correct revenue and profit margin errors allegedly caused by Swanberg’s misconduct.
  • The SEC announced settled charges requiring Oracle Corporation to pay more than $23 million to resolve charges that it violated provisions of the Foreign Corrupt Practices Act (FCPA) when subsidiaries in Turkey, the United Arab Emirates (UAE), and India created and used slush funds to bribe foreign officials in return for business between 2016 and 2019.

Canada:

  • The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) announced that it has fined Cheetah Consulting Ltd. This money services business in Richmond, British Columbia, was imposed an administrative monetary penalty of CAD $33,000 on July 20, 2022, for non-compliance with Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its associated Regulations.
  • FINTRAC announced that it has fined Nu Stream Realty Inc. The real estate broker in Burnaby, B.C., received an administrative monetary penalty of CAD $230,423 for non-compliance with Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its associated Regulations.

United Kingdom:

  • The Financial Conduct Authority (FCA) announced fines of £12.6M against Citigroup’s international broker-dealer for failing to properly implement the Market Abuse Regulation (MAR) trade surveillance requirements relating to the detection of market abuse.
  • The FCA has fined The TJM Partnership Limited (in liquidation) £2,038,700 for failing to ensure it had effective systems and controls in place to identify and reduce the risk of financial crime and money laundering in its business operations.

Germany:

  • The Federal Financial Supervisory Authority BaFin announced that it imposed a securities violation fine of €200,000 on MFS Meridian Funds for failing to submit voting rights notifications within the prescribed period.

Singapore:

  • The Monetary Authority of Singapore (MAS) has imposed fines of $375,000 on UOB Kay Hian Private Limited for business conduct and AML/CFT failures.

Hong Kong:

  • The Securities and Futures Commission (SFC) has reprimanded and fined TC Capital International Limited for HK$3 Million and suspended its responsible officer for failing to discharge its duties as the sponsor in the listing application of China Candy Holdings Limited (China Candy). The disciplinary action followed the SFC’s investigation which found that TC Capital failed to:
    • 1) conduct reasonable due diligence on the third party payments made on behalf of two top customers of China Candy; and
    • 2) maintain proper records of the due diligence work allegedly done in relation to the listing application.
  • The SFC reprimanded KTF Capital Management Limited (KTFCM)—formerly known as Forchn International Asset Management Co. Limited and Rega Technologies Limited—and handed out a HK$400,000 fine for breaching Financial Resources rules. The SFC found that KTFCM failed to maintain its required liquid capital of approximately HK$2.8 million between 13 and 18 December 2018 and failed to notify the SFC when it became aware of its inability to comply with the financial resources requirements. It transpired that the almost HK$20 million deficit in KTFCM’s liquid capital was the result of an oversight in that it failed to anticipate its proprietary trading in shares would trigger adverse implications to its liquid capital calculation.
  • The SFC has reprimanded Rifa Futures Limited (Rifa) HK$9 Million for failure to comply with Know-Your-Client, Anti-Money Laundering / Counter-Terrorist Financing (AML/CFT), and other regulatory requirements between May 2016 and Oct 2018.
  • The SFC has reprimanded RBC Investment Services (Asia) Limited (RBC) and fined it HK$7.7 Million for regulatory breaches relating to mishandling of client assets.

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Is your AML compliance too expensive, time-consuming, or ineffective?

iComply enables financial services providers to reduce costs, risk, and complexity and improve staff capacity, effectiveness, and customer experience.

Request a demo today.

Protecting Digital Assets with KYC

Protecting Digital Assets with KYC

by | Oct 6, 2022 | Blog, KYC - Know Your Customer

Protecting Digital Assets with KYC

Are your KYC protocols set up to protect your customers and your digital assets? With the digital world constantly evolving and new assets entering the market, ensuring that your due diligence and identity verification platforms are up to current regulations is essential for compliance, as well as optimal performance.

At iComply, we understand the integral role Know Your Customer (KYC) and Customer Due Diligence (CDD) protocols play in preventing fraud, money laundering, and the accidental funding of terrorists or other illicit activities. Our modular suite of digital KYC compliance tools is customizable for your specific needs and makes it easy to stay on top of changing legislation and ensure your clients have the best protection available.

Below, we’ll cover the 3 core principles behind digital asset protection, as well as the benefits of partnering with a vetted provider like iComply for your financial crime compliance needs.

Why Digital Asset Protection Matters

As more and more assets are translated into digital form, having the right protocols in place to manage who has access to what is essential. With the financial market seeing a shift towards decentralization as blockchain-based currencies like Bitcoin and Ethereum grow in popularity, many other assets have begun to shift to digital safekeeping. Common examples of digital assets that need due diligence protocols in place for adequate security include:

  • Financial assets (investments, stocks, bonds, cryptocurrency)
  • Sensitive documentation
  • Any additional asset that can be stored digitally and identified/exchanged for real-world value offline

The advent of digital acquisition and trade has led to the increasing development of regulations in major locations like Europe, with Germany introducing multiple laws and the EU as a whole looking to implement MiCA (Markets in Crypto-Assets) regulations as well. As online investors continue to look for the latest, most innovative ways to grow and protect their assets, KYC and CDD platforms must be prepared to deal with the unique demands of a decentralized customer base, as well as the ever-growing threat posed by criminals that seek to use such methods/assets for their own illicit purposes.

Core Principles of Digital Asset Protection

When it comes to protecting digital assets, there are three fundamental objectives that must be in place for companies to safeguard their clients’ interests. These principles include:

Safekeeping

Digital assets must be protected against unlawful access points and parties. Whether dealing with standard investments or emerging crypto-technology, institutions that seek to house and distribute such assets should have digital protection top of mind at all times. In this regard, regulation compliance should be seen as an entry point to protection, not just a box that needs to be checked. Protection must evolve in tandem with legislation, trends, and emerging needs of your customers for optimal long-term results.

Accessibility

In addition to safeguarding assets, a viable platform must also make them accessible as needed to their clientele. Full-scale KYC programs play a key role in ensuring that organizations are able to safely and efficiently verify the identity of those wishing to interact with their platform and engage in the exchange of goods and services in a legal manner.

Compliance

Finally, digital asset managers must ensure that every level of their institution and practice is fully compliant with any and all jurisdictional standards, from identity verification to record-keeping and everything in between. Such measures are put in place to significantly reduce the chance of fraud, money laundering, and other criminal behaviour — failure to comply can lead to hefty fines, reputational damage, and significant repercussions for your customers.

Ensure Digital Asset Compliance with iComplyKYC

At iComply, we understand the importance of ensuring digital asset platforms have the appropriate protections in place. Our modular suite of KYC products makes it easy to tailor your workflows to your requirements, including standard CDD, EDD, continuous risk monitoring, and more. With fast and efficient results you can trust, iComplyKYC allows you to focus on the ins and outs of running your business while reducing the cost of running ID verification and KYC protocols by up to 80%. When it comes to digital asset protection, iComply is your trusted source and leading choice for KYC software and electronic identity verification in the US, Canada, and the UK.

Book a demo with our team today to learn more about iComplyKYC’s range of solutions, and how our platform can be customized to fit your organization.

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Is your AML compliance too expensive, time-consuming, or ineffective?

iComply enables financial services providers to reduce costs, risk, and complexity and improve staff capacity, effectiveness, and customer experience.

Request a demo today.

Common Challenges Facing KYC Protocols

Common Challenges Facing KYC Protocols

by | Sep 27, 2022 | Blog, KYC - Know Your Customer

Common Challenges Facing KYC Protocols

Do you have the right processes and protocols in place to protect against fraud, money laundering, and the many other risks that come with operating in today’s market? Know Your Customer and Customer Due Diligence, otherwise known as KYC and CDD, play a major role in protecting businesses and institutions—as well as their customers—from fraud, money laundering, and other criminal activities, as well as ensuring compliance with the many existing global regulations.

Identity verification and risk assessment are some of the best safeguards we have when it comes to stopping criminals from exploiting or misappropriating vulnerable networks, and with the help of a vetted software platform like iComplyKYC, you can move forward with confidence when establishing client relationships and protecting your assets.

Below, we’ll explore some of the common challenges facing modern KYC software, as well as the benefits of partnering with iComply.

False Positives

One of the most difficult parts of identity verification is perfecting the process and avoiding the hassle associated with false positives. While no program or protocol operates with 100% accuracy (as of yet), there’s no denying that false positives are incredibly inconvenient and costly to deal with for regulated firms. When an unsuspecting, genuine customer is falsely flagged as a risk—triggering EDD protocols due to an errant association with someone of the same name—it can cost significant time and money to properly investigate in order to stay compliant with jurisdictional mandates. Depending on your client base and what areas you serve, your organization could face the potential of numerous false positives routinely, each of which demands its own due diligence to resolve accordingly.

How do you circumvent such hassles? At present, there is no one method or program that offers a flawless performance, but implementing automated processes and partnering with a trusted KYC provider like iComply makes it easier to integrate routines that drastically reduce the time spent in review and save revenue in the process.

Find the Right Data

As any security analyst or risk assessor will tell you, not all data is created equal. In order to fully comply with global KYC and CDD regulations, your identity verification protocols need to pull the right kind of data from vetted sources. Whether you’re looking to run a basic background check on a customer applying to open a new banking account with your institution or needing to assess the risk of partnering with a Politically Exposed Person (PEP), you need to be sure the information you’ve gathered is as accurate and dependable as possible. Failure to do so can result in costly fines and drastically hinder your operations.

Did you know? iComplyKYC pulls from proven data sources and operates using edge computing to protect user privacy by conducting analyses right from the source device.

Missing Alerts

Incomplete data and/or poor processes can lead to missed alerts that leave your company and your clients open to unnecessary risks. When KYC is rushed or left to manual review, fact fatigue and minimal resources often lead to costly oversights that can have dangerous results for all parties involved. Your KYC and CDD protocols need to be able to keep up with demand without ever compromising the value and integrity of the data you gather.

Lackluster Reporting/Record Keeping

The ethos behind identity verification asserts that knowledge is power and retaining what we learn is essential for continued risk assessment and mitigation. Many KYC platforms and programs fall short where reporting is concerned, some in part due to poor practices and others to missing resources. iComplyKYC makes it easy to archive and access vital information when it matters most, with minimal delays or headaches in the process.

Rough Integration, No Future Development

KYC and digital security are constantly evolving realms, and in order to stay as safe and compliant as possible, your practices should be able to evolve fluidly with changing legislation. In addition, if businesses find themselves using multiple platforms and different software applications to try and achieve verification protocols, the results are typically just as disjointed as the KYC program is. Choosing a platform like iComplyKYC designed to seamlessly integrate with existing protocols helps to reduce errors and keep operations flowing smoothly while also ensuring you’re always on the right side of the latest standards.

We’ve Got Your KYC Bases Covered

Designed with the highest data quality and security levels in mind, iComplyKYC is proud to offer a world-leading solution when it comes to navigating KYC and CDD compliance. As one of the first providers on the market to offer a truly immersive, end-to-end experience for financial crime compliance, our robust suite of modular tools can be set up in minutes and configured to match workflows with the unique regulations of your jurisdiction, meaning that downtime is minimal and integration is as seamless as possible.

Learn how we do it by talking to our team today and booking a demo.

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Is your AML compliance too expensive, time-consuming, or ineffective?

iComply enables financial services providers to reduce costs, risk, and complexity and improve staff capacity, effectiveness, and customer experience.

Request a demo today.

How KYC Protocols Build Customer Trust

How KYC Protocols Build Customer Trust

by | Sep 27, 2022 | Blog, KYC - Know Your Customer

How KYC Protocols Build Customer Trust

If you’ve followed along on any of our previous KYC blogs or are a subscriber of our Regwatch newsletter, you know just how important it is to stay on top of evolving KYC, AML, CFT, and CDD legislation. With criminal activity and fraud becoming increasingly complex, it is undeniably important for businesses and institutions to take every necessary precaution. Compliance not only helps prevent costly fines (in 2021, financial institutions accrued over USD $1.9B in AML fines globally) but also helps to build trust among your customer base.

At iComply, we know the value streamlined KYC and CDD processes can deliver for organizations around the globe, and we are proud to partner with clients spanning multiple industries, including banking, insurance, legal, back-office services providers, and more.

Our innovative, modular suite of KYC products makes it easier than ever to get the results you need and establishes trust with your customers. Below, we’ll discuss just a few of the ways KYC builds confidence with your client base while also making sure you stay on the right side of global regulations.

Find the Right Identity and Risk Data

One of the most important components of the KYC and CDD process is ensuring your software gathers accurate data from trustworthy sources. While many platforms make a show of how much data they have available, the truth of the matter is data only matters if what you find is timely, relevant, and reliable. iComplyKYC balances the ethics of respecting external user privacy and security while also making sure internal users get the information they need to paint a clear, valid picture of who they’re interacting with.

Financial Crime Stops Here

It’s no secret that criminals are getting more creative when it comes to circumventing anti-fraud measures and thwarting financial crime compliance efforts. Having well-vetted, dynamic KYC workflows drastically reduces your chances of being the victim of fraudulent users/activities, helps to prevent your company from accidentally funding illicit acts, and ultimately gives your customers peace of mind when they choose to partner with you. By making sure you know who you’re partnering with, you also give your clients the benefit of knowing they are investing in a trustworthy company that puts security first.

User Privacy Matters Most

Balancing the need for identity verification with user privacy protection is a hot topic of debate within the world of financial crime compliance. While there’s no denying the importance of transparency during onboarding, privacy-savvy individuals have their own concerns when it comes to giving out too much information and ensuring that data is ethically sourced. At iComply, we help address these concerns by making sure all information is pulled from valid sources and by using edge computing to help verify users from the safety (and privacy) of their own native device—instead of relying on unencrypted email transfers of their most sensitive personal or corporate information.

Efficient Delivery

Manual KYC processes are difficult to implement, costly to maintain, and can result in significant delays for companies and customers alike as they get stuck in a “waiting loop” for compliance workflows to finish. Partnering with a streamlined platform like iComplyKYC removes confusion and expedites results, all without compromising the quality or validity of the data gathered.

Your Partners in Compliance: Meet iComplyKYC

As a world leader in KYC and financial crime compliance, iComply knows that staying on top of ever-evolving protocols is about more than just dodging fines. iComplyKYC was created to ensure transparency and accuracy that you (and your customers) can depend on. We’re proud to offer a truly end-to-end KYC solution for businesses and institutions across North America and Europe. With a lightning-fast setup and plenty of opportunities to customize to your exact needs, iComply is your go-to provider for KYC and CDD solutions.

Learn how we do it by talking to our team today and booking a demo.

learn more

Is your AML compliance too expensive, time-consuming, or ineffective?

iComply enables financial services providers to reduce costs, risk, and complexity and improve staff capacity, effectiveness, and customer experience.

Request a demo today.

Vaidyanathan Chandrashekhar

Vaidyanathan Chandrashekhar

Advisors

“Chandy,” is a technology and risk expert with executive experience at Boston Consulting Group, Citi, and PwC. With over two decades in financial services, digital transformation, and enterprise risk, he advises iComply on scalable compliance infrastructure for global markets.
Thomas Linder

Thomas Linder

Advisors

Thomas is a global tax and compliance expert with deep specialization in digital assets, blockchain, and tokenization. As a partner at MME Legal | Tax | Compliance, he advises iComply on regulatory strategy, cross-border compliance, and digital finance innovation.
Thomas Hardjono

Thomas Hardjono

Advisors

Thomas is a renowned identity and cybersecurity expert, serving as CTO of Connection Science at MIT. With deep expertise in decentralized identity, zero trust, and secure data exchange, he advises iComply on cutting-edge technology and privacy-first compliance architecture.
Rodney Dobson

Rodney Dobson

Advisors

Rodney is the former President of ADP Canada and international executive with over two decades of leadership in global HR and enterprise technology. He advises iComply with deep expertise in international service delivery, M&A, and scaling high-growth operations across regulated markets.
Praveen Mandal

Praveen Mandal

Advisors

Praveen is a serial entrepreneur and technology innovator, known for leadership roles at Lucent Bell Labs, ChargePoint, and the Stanford Linear Accelerator. He advises iComply on advanced computing, scalable infrastructure, and the intersection of AI, energy, and compliance tech.
Paul Childerhose

Paul Childerhose

Advisors

Paul is a Canadian RegTech leader and founder of Maple Peak Group, with extensive experience in financial services compliance, AML, and digital transformation. He advises iComply on regulatory alignment, operational strategy, and scaling compliance programs in complex markets.
John Engle

John Engle

Advisors

John is a seasoned business executive with senior leadership experience at CIBC, UBS, and Accenture. With deep expertise in investment banking, private equity, and digital transformation, he advises iComply on strategic growth, partnerships, and global market expansion.
Jeff Bandman

Jeff Bandman

Advisors

Jeff is a former CFTC official and globally recognized expert in financial regulation, fintech, and digital assets. As founder of Bandman Advisors, he brings deep insight into regulatory policy, market infrastructure, and innovation to guide iComply’s global compliance strategy.
Greg Pearlman

Greg Pearlman

Advisors

Greg is a seasoned investment banker with over 35 years of experience, including leadership roles at BMO Capital Markets, Morgan Stanley, and Citigroup. Greg brings deep expertise in financial strategy and growth to support iComply's expansion in the RegTech sector.
Deven Sharma

Deven Sharma

Advisors

Deven is the former President of S&P and a globally respected authority in risk, data, and capital markets. With decades of leadership across financial services and tech, he advises iComply on strategic growth, governance, and the future of trusted data in AML compliance.