Digital due diligence. It’s a mouthful to say out loud, but financial services companies should be talking about it.
The role of the MLRO (Money Laundering Reporting Officer), as required by the Financial Conduct Authority (FCA) and the individual appointed to be approved by the Financial Services Authority (FSA), faces a tough challenge in any organisation, but perhaps none more so than a financial services organisation that is seeking to increase its digital offer.
The best practice processes designed to help organisations identify, assess and monitor money-laundering risk are often built around traditional “brick” institutions, where the financial services firm comes face to face with its customers.
However, completing due diligence checks for all new customers can actually be more efficient and straightforward when implemented digitally.
So what benefits can you expect when taking your due diligence digital?
- Demonstrate compliance. Digital customer onboarding creates a full history of effective identification process and documentation, retained for future audit purposes. The systems provide systematic proof that adequate safeguards are in place. A team member forgetting to attach a scanned copy of an identification document or store away the correct form, cannot thwart the Anti-money laundering (AML)/Combating the Financing of Terrorism (CFT) procedures.
- Analytics. The data required for Suspicious Activity Reports (SARs) is centrally held, along with a full audit trail. Analytics can also be generated from the systems, enabling easy access to information for the MLRO Annual Report and providing the basis for continuous improvement recommendations.
- Customisation. A digital process can be automatically tailored to provide higher levels of due diligence and checks on high-risk customers, ensuring that your policies and procedures are upheld to the very highest standards.
- Robustness. A digital process is much more difficult to manipulate. You aren’t reliant on branch staff carrying out detailed processes and procedures. Our recent survey of over 500 UK organisations showed that fraud rates significantly peaked in the busiest trading hours, as front line teams cut corners, under pressure to reduce queues and improve customer waiting times.
GBG IDscan can help, delivering a compliant digital process which enables you to capture and classify a customer’s identification document, validate check sum algorithms on the document and extract the data – potentially to forward for 2+2 checks, as well as use in the rest of the customer onboarding journey.
The digital journey can provide selfie and liveness options to ensure the person on the presented identification matches the person digitally opening the account.
The flexibility of GBG IDscan enables financial services organisations to choose what level of checks they do at what part in the process, and tailor how they cater for high risk individuals. For example, certain transaction thresholds could trigger further checks, in order to provide the right balance between a fast customer experience and an adequate level of due diligence.
To find out more about how GBG IDscan can help your financial services organisation deliver compliant results, click here.