The BBA is now integrated into UK Finance. Please go to www.ukfinance.org.uk for new content and updates from UK Finance.
Material published by BBA prior to 1st July 2017 is still available on this website.
From 1 July 2017, the finance and banking industry operating in the UK will be represented by a new trade association, UK Finance. It will represent around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation will take on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association.x
Written by Jane Jee, CEO, Kompli-Global
It’s clear that that 4MLD will create complex and time-consuming challenges. For example, in addition to establishing and verifying identity on a significantly increased range of customers, firms now need to check for potential adverse issues and this raises the important question of how to conduct thorough and consistent searches.
Manual searches of open source data are inefficient and likely to be inadequate. In many cases insufficient public information is available on the indexed web and relevant data may be suppressed. The ability to search in foreign jurisdictions in local languages is crucial to avoid compliance gaps.
Undertaking regular monitoring also poses a considerable challenge. Above all, members will have to document an audit trail to prove that a proportionate and appropriate approach has been taken.
Consider an application to open a new corporate account is received. The sole director of the corporate applicant is a director of multiple companies – one of these companies has two UK PEPs on their board and another has two UK PEPs who are shareholders.
While 98% of respondents surveyed during a Kompli –Global/BBA webinar said this customer should not be able to open this account within hours without a risk assessment being made, 46% said their systems and access to data wouldn’t have identified this structure and potential risk – a clear problem.
Additionally, around a third of respondents said they did not believe their current systems and processes would provide sufficient due diligence information to make a compliant risk decision in this case.
Many companies have their 4MLD plans in place, but there are still important questions to consider before the deadline:
The bottom line is that affected firms have had two years to prepare for 4MLD and, although a few details of the UK Regulations remain to be determined, everyone needs to be ready to comply with the new laws by 26th June.
For more detail on how to address these challenges, contact Kompli-Global.