Financial institutions and insurance firms across the globe are facing a collective, unprecedented challenge. Constantly-evolving, stringent Anti Money Laundering (AML) regulations and ‘Know Your Customer’ safeguards require these businesses to present a transparent, detailed and precise view of customers. Cutting through the complexity of these regulations and managing data to ensure compliance places a huge burden on these firms, financially, technologically and in terms of appropriate skill sets. It is, however, absolutely critical as the impact of non-compliance is huge.

Whilst an organisation may be compliant in its ‘home’ country, if it operates in other regions it needs to meet those stipulations too, which adds a further layer of complexity. AML enforcers are taking a microscopic look at the abilities of banks and financial institutions to comply with these regulations, and are handing out huge fines for non-compliance. The FCA, in the first half of 2015 alone, levied fines of over £800m or six times fines levied in the same time period in 2014, and more than double the £335m handed out in the whole of 2013.

Banks around the globe have also been impacted, with Deutsche Bank, Commerzbank, BNP Paribas, UBS France, Handelsbanken and Nordea just a selection of European banks hit by huge fines. And it isn’t just financial institutions – global football association FIFA was recently rocked by money laundering allegations which have stunned the world of professional sport. The media spotlight on this and other high-profile cases is adding pressure to regulators to respond and further tighten controls.

Avoidance of these fines lies in the ability to provide accurate and detailed information on customers structured in a consistent, transparent way. Data is prone to error and variation, and when you consider the size of many financial institutions and insurers, the disparate, unrelated systems and platforms holding data for different purposes, the number of different geographic locations, the legacy systems inherited in M&A activity, and the sheer volume of data, the challenge appears insurmountable.

Oct-Dec 2015 Issue

Pitney Bowes