Balancing Customer Experience with Compliance: Is this possible? | Outcomes of the FATF Plenary | EU agrees new sanctions on Russia and more
Anna Stylianou
Anti-Financial Crime & AML Advisor, Leader and Trainer | Empowering and Supporting BoDs | Building Compliance-by-design programs | Educating and Inspiring Compliance Teams | Founder of AML Cube | 40k+ followers
Welcome to our AML News and Updates Newsletter July 2024 edition. ??
Stay up to date with main AML news and updates in less than 10 minutes per month!
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Let's see an outline of the topics to be covered in this edition:
? Outcomes of the FATF Plenary in June 2024
? FATF Mutual Evaluations and Follow Up Reports June 2024
? Singapore Published its Updated Money Laundering National Risk Assessment
? The European Union adopts a position on the EU law to combat corruption
? EU agrees new sanctions on Russia
? The Wolfsberg Group issued a Statement on Effective Monitoring for Suspicious Activity
3. Other News:
? Swiss-Asia Financial Services fined S$2.5 million
? FINMA proceedings: HSBC Private Bank (Suisse) SA violated money laundering regulations
? Human Trafficking Network Dismantled
? US – The Department of Justice Repatriates $1.4B Misappropriated 1MDB Funds to Malaysia
Let's start...
Balancing Customer Experience with Compliance: Is this possible?
The onboarding process is so important! Why? Because it’s the first impression customers get for a financial institution.
A smooth and easy new onboarding process makes a great first impression to the client. A slow and confusing one can drive customers away and hurt the company's image.
Smooth customer experience extends beyond initial customer acquisition. Any inefficient process filled with unnecessary steps can frustrate new clients and damage their perception of your brand.
The Challenges
AML/CFT regulations require entities to obtain as much information as necessary to be able to understand their customer and their potential transations. Customer experience focuses on making things easy and convenient for customers. Customers want to open an account quickly without a bunch of hassle.
Striking the right balance between gathering necessary information and delivering a user-friendly experience is key to client satisfaction and loyalty.
Balancing Compliance and Customer’s Experience
Achieving a balance between customer experience and compliance requires a comprehensive approach. Companies need to develop and implement policies that not only meet regulatory requirements but also prioritize the needs and expectations of their customers.
Here are some actionable tips to achieve that perfect balance between keeping your customers happy and meeting compliance needs:
Consider Compliance-by-Design
Compliance by design refers to the practice of considering and implementing regulatory requirements and compliance measures into the initial stages of product and service, ideally during development. By incorporating compliance considerations from the beginning, companies can ensure that their offerings meet regulatory standards from the outset. This approach is not only more efficient but also more cost-effective, as it reduces the need for costly adjustments and modifications later on.
Embrace Automation
Streamline compliance processes like customer and company verification with the use of automated solutions. This enhances efficiency and accuracy while maintaining a smooth experience for the customer.
More and more regulators require entities to employ automated solutions as part of their Anti-Money Laundering (AML) program, recognising their benefits for both, the entities and their customers.
Implement Robust Internal Security Controls
Develop and enforce internal security protocols.?This ensures proper handling of customer data and adherence to security standards like PCI DSS and ISO 27001.
Which customer doesn’t want his personal data to be secured?
Adopt Secure Digital Payment Solutions
Utilise secure, omnichannel digital payment solutions that function seamlessly across various channels (website,?mobile app,?etc.).?This caters to customer preferences for convenient payment options while maintaining high data security standards.?New payment technologies can fulfil customer expectations for a frictionless experience without compromising compliance.
Minimise Onboarding Friction
Optimise the identity verification process to reduce hurdles and improve the customer journey. Consider leveraging advanced technologies like biometrics and machine learning to verify customer identities quickly and accurately, enhancing customer experience while at the same time enables you to stay compliant.
Leverage Real-Time Verification
Use real-time verification with trusted data sources to onboard customers quickly and eliminate manual review delays. This balances the need for robust identity checks with a seamless customer experience.
Clearly communicate expectations
Outline the onboarding process upfront, including the steps involved and estimated timelines. Knowing the number of steps involved beforehand allows customers to manage their expectations and schedule their account opening accordingly. It reduces frustration by eliminating the feeling of being stuck in an unending process.
Furthermore, clear communication about the steps involved fosters trust by demonstrating the company's respect for the customer's time and effort.
Offer personalised experiences
Avoid using a one-for all onboarding process for all clients. Instead, leverage the information obtained to create a personalised experience. Tailor onboarding steps based on customer needs and risk profiles.?
For example, low-risk customers, who may be signing up for a basic service level, can likely complete a faster verification process with fewer documentation. In contrast, high-risk profiles, such as those dealing with large financial transactions, might require additional verification steps to ensure compliance and security. This personalised approach fosters a sense of understanding, increasing customer satisfaction from the very beginning.
Gather feedback from customers and improve
Continuously gather customer feedback on the onboarding experience. Use surveys, in-app prompts or even direct communication channels.?Use this information to identify areas for improvement and refine your process for future users.
When Customer Experience Meets Compliance
Customer experience and compliance may seem to conflict with each other. Customers seek speed and convenience, whereas compliance demands comprehensive information gathering. No matter what, the two can be aligned.
Even customers now understand the benefits of compliance, recognising that thorough checks and questions are in place to protect their interests as well as those of the company. Therefore, it's not about asking many questions, but about asking the right questions.
By adopting these specific measures, businesses can create a harmonious balance between compliance and customer experience. This ensures they not only meet regulatory standards but also exceed customer expectations, building a resilient, trustworthy brand that thrives in a competitive marketplace.
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Outcomes of the FATF Plenary in June 2024
The sixth and final Plenary of the FATF under Singapore's Presidency has concluded on 28th June 2024.
One of the highlights of the decisions were the removal of Turkey and Jamaica from the “jurisdictions under increased monitoring list” also known as “grey list”.
You can get an overview of the FATF Plenary decisions here.
FATF Mutual Evaluations and Follow Up Reports June 2024
The FATF, during the month of June 2024 has published the following Mutual Evaluations and Follow-Up Reports on its website:
Mutual Evaluations:
Follow-Up Reports:
Singapore Published its Updated Money Laundering National Risk Assessment
The country is strengthening its efforts to maintain the effectiveness of its anti-money laundering regime in its evolving risk landscape.
The National Risk Assessment was conducted with the contribution of the Singapore supervisory and law enforcement agencies, Singapore’s Financial Intelligence Unit and the feedback from private sector entities and counterparts foreign authorities.
Read more here.
The European Union adopts a position on the EU law to combat corruption
This is a significant step in strengthening anti-corruption measures across the European Union. The new law aims to establish minimum standards for defining and sanctioning corruption offences, as well as implementing preventive measures and rules for more effective investigation and prosecution.
Read the official announcement here.
EU agrees new sanctions on Russia
The new sanctions target for the first time supplies of liquefied natural gas (LNG), which several member states continue to buy.
Read the official announcement here.
The Wolfsberg Group issued a Statement on Effective Monitoring for Suspicious Activity
The Statement aims to enable financial institutions create more effective monitoring systems that provide higher quality, actionable intelligence to combat financial crime, rather than simply increasing the quantity of reports filed.
Swiss-Asia Financial Services fined S$2.5 million
Singapore's Monetary Authority (MAS) fined Swiss-Asia Financial Services S$2.5 million for failing to properly prevent money laundering and terrorism financing. The reasons were some specific areas in its AML culture and program.
Read here how ineffective compliance culture can cause problems to an entity and what you can do when compliance seems hard.
FINMA proceedings: HSBC Private Bank (Suisse) SA violated money laundering regulations
FINMA, the Swiss regulator announced that HSBC Private Bank (Suisse) SA seriously violated financial market law. The regulator has imposed specific measures to ensure compliance. Until these measures are fully implemented, the bank may not enter into any new business relationship with Politically Exposed Persons (PEPs).
Read the official announcement here.
Human Trafficking Network Dismantled
Operation Global Chain, a large-scale joint effort against human trafficking, led to 219 arrests and identified 1,374 potential victims, including 153 children, across 39 countries. The operation was coordinated by Austria, Romania, Europol, Frontex, and INTERPOL. It targeted sexual exploitation, forced criminality, and forced begging. Authorities launched 276 new investigations, identified 362 additional suspects, and seized 2,074 criminal assets. The operation dismantled forced labor in Hungary, Vietnam, and Ukraine.
Read INTERPOL’s announcement here.
US – The Department of Justice Repatriates $1.4B Misappropriated 1MDB Funds to Malaysia
The U.S. Department of Justice repatriated an additional $156 million to Malaysia, bringing the total recovered funds from the 1MDB corruption scandal to $1.4 billion. Court documents allege over $4.5 billion was misappropriated through an international money laundering scheme.
Read more here.
There were many more interesting news recently, however, these are the ones that drew my attention, and wanted to share them with you!
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Stay tuned for more AML News and Updates! ??
Best
Anna
Founder
AML Cube Consulting and Education
Anti-Financial Crime & AML Advisor, Leader and Trainer | Empowering and Supporting BoDs | Building Compliance-by-design programs | Educating and Inspiring Compliance Teams | Founder of AML Cube | 40k+ followers
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