There is a strong focus on putting in place anti-money laundering measures in the EU countries and on cross-border information sharing. In May 2018, the EU made changes to Directive 2015/849 on measures to prevent the use of the financial system for money laundering or financing terrorism.
Anti-Money Laundering (AML) work affects all the Scandinavian countries. Sectors including banks, mortgage companies, insurance companies, auditors, accountants, estate agents, law firms must comply with the new regulations. Obliged entities must implement a number of measures to preclude the possibility of being exploited by criminal forces. In Norway, this led to a new Act in 2018 relating to anti-money laundering and terrorist financing. This puts a strong spotlight on those required to report any such attempted violations.
The measures set out in the Act are intended to protect the financial and economic system, as well as society at large, through prevention and detection, to thwart any attempts to involve obliged entities in money laundering.
How to succeed with AML
TietoEVRY has worked closely with customers in the Norwegian market to create efficient AML solutions. Our data analysis expert Kim Remvik-Larsen and sales manager for the banking/finance and insurance industry Ole Jonassen share their experiences from Norway. These experiences can be applied in other Scandinavian countries.
What is the biggest challenge facing the industry?
“The requirements surrounding AML mainly require good access to reliable data about your customers. The Act requires you to investigate many different elements of information before you can say that you have done due diligence to determine whether or not your customer is violating the provisions. All obliged entities must start this work as soon as they need to onboard a new customer. Who actually owns the company and who has control over the shares? Who has powers to bind the company and sign on its behalf? Who are on the board? Are there any politically exposed people there? These are examples of questions that companies need to ask before they can risk-assess their customers and take appropriate action,” Kim points out.
“I find many companies still carry a lot of legacy issues when it comes to system architecture. These are ill-suited to building new solutions, and efficient handling of AML requirements demands good system solutions. To prevent sales and customer service agents from becoming bogged down in manual tasks related to AML, all data must be integrated into the workflow. AML expertise and data quality must go hand in hand to achieve efficient processes, both when onboarding new customers and when risk-assessing existing customers over time. We also see that some companies have varying data quality in their systems, for example when it comes to the insured object as well as the policyholder, and then it can be very difficult to fully comply with the Act and the regulations,” Ole Jonassen explains
What does it take to build a successful AML system?
“Based on the experience of data-driven cases we work with at TietoEVRY, we can say with certainty that taking some fairly simple steps will streamline customer management and also reduce overall costs.
"It all starts with a digital onboarding process for new customers. We’re happy to contribute to the process of designing flowcharts for the kind of digital onboarding processes that take into account both data quality and AML-related information elements. Using our integration interfaces, the system runs queries against relevant information registers that will automatically impact the various trails in the process. Here, for example, information from the Population Register, Beneficial Owners, PEP, infotorgForetak (business) and infotorgEiendom (property) sanctions lists are integrated into the technology to safeguard AML provisions. The data sets will, of course, be included to provide the basis for decision-making at a later stage. AML is also closely related to Fraud Prevention, and we see the boundary between these two areas is increasingly being erased,” says Kim.
"Effective risk assessment of end-customers is also required, both during onboarding and for the lifetime of the customer relationship. TietoEVRY develops solutions that update the necessary underlying data so that risk-assessment changes are identified as quickly as possible, so the necessary steps can be taken in relation to customers. With us as a partner, we provide access to up-to-date datasets from more than 30 sources, expertise in data analysis, and knowledge of how to harness the great potential of good datasets in customer interface work. Take advantage of this so you can focus on further developing your AML processes. We can help you make real progress here,” Ole concludes.
“In addition, it is becoming more and more important to have continuous monitoring of customer relationships and for banks to be able to keep track of the customer’s activities over time. This can be achieved with good data monitoring but also by observing the actual activities of a customer in relation to these risk assessment categories. The ability to automate an ODD process in a way that is not detrimental to operational work will become all the more important. Here we see what a key role transaction data, as it relates to FOT data, will play in the future of FSS Financial Crime Prevention. Our data-driven decision-making processes make it easier for the bank to continuously monitor customer development and to tweak solutions without creating laborious work,” says Jonas Anton Kullgren, Head of Business & Product Development at TietoEVRY.
We help your company to succeed with AML
In Norway, many of our deliverables are for the banking/finance and insurance industries. We help our customers comply with regulatory requirements and also establish better and more complete data sets for today’s use of data. We assist customers with AML in other countries. Please get in touch with us for more information.