Role in the Context of Asia s AML/CFT Compliance Regime

Transcription

1 Role in the Context of Asia s AML/CFT Compliance Regime Shirish Pathak Managing Director Fintelekt Advisory Services 35 th ABA General Meeting and Conference November 15-16, 2018 Kurumba, Maldives

2 Agenda Setting the Context Global Trends and Regional Risks Role of Fintelekt in Uniting Stakeholders Ensuring Better AML/CFT Compliance

3 FATF High Risk Jurisdictions High Risk: Iran North Korea Strategic Deficiencies: The Bahamas Botswana Ethiopia Ghana Pakistan Serbia Sri Lanka Syria Trinidad & Tobago Tunisia Yemen As on October 19, 2018

4 MALAYSIA SRI LANKA NEPAL PHILIPPINES NEW ZEALAND INDONESIA Regulatory Focus Increasing in Coverage and Depth Stricter registration and reporting guidelines to improve quality and usefulness of STRs Law firms, banks and financial entities to file threshold based reports on cash transactions and international wire transfers Corporate transparency standards require all companies to regularly disclose their true, beneficial owners not just their legal representatives to authorities Regulatory parameters for the conduct of electronic KYC (e-kyc) processes for remittance transactions CDD rules for finance companies & DNFPBs Co-operatives sector brought under the ambit of the AML Act Personal Liability Compliance Budgets Sources: Fintelekt research based on published news sources

5 The Economic Impact of a Weak AML/CFT Regime Disruption of the fund flow Impact on forex reserves Worsened income distribution Setback to financial inclusion Negative financial system reputation Loss of CBRs/ de-risking 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 Malaysia Indonesia Vietnam India Bangladesh Pakistan Sri Lanka NA 122

6 Top AML Risks for Banks in Asia Philippines Vietnam India Sri Lanka Bangladesh Nepal the sources of customers funds Trade-based money laundering activities Cybercrime Monitoring customers that transact across several lines of business the sources of customers funds Fraud Trade-based money laundering activities Ultimate Beneficial Ownership identification Terrorist financing beneficial ownership the sources of customers funds Trade-based money laundering activities Trade-based money laundering activities the sources of customers funds Monitoring customers that transact across several lines of business the sources of customers funds beneficial ownership Trade-based money laundering activities Source: Country level surveys conducted by Fintelekt in

7 Uniting Stakeholders across the Region Industry Associations Research and Advisory AML CFT Training Basic & Advanced FIU / Regulators / Law Enforcement Agencies Summits, Briefings & Roundtables

8 How Can Banks Ensure Better AML/CFT Compliance? Governance Tone from the top critical to building a culture of compliance Risk Identification & Assessment Thorough risk assessment and accurate risk quantification Elements of a sustainable AML compliance environment Training Continuous training and awareness generation among all employees Technology Sophisticated technology capable of red flagging the latest criminal typologies

9 Have You Seen This Movie?

10 Do We Still Remember?

11 Aviation and AML What s Similar? 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 lessons and have to re-learn them.

12 Are We Seeing the Bigger Picture? Are we, as responsible bankers, addressing AML/CFT in the right spirit, or as a tick mark item?

13 THANK YOU Mobile: th ABA General Meeting and Conference November 15-16, 2018 Kurumba, Maldives