PRACTICAL SOLUTIONS
Furthermore, relationships that are identified as high risk in one compliance system might not receive the same scrutiny in a separate business function within the company if data sharing across systems is difficult or absent.
Uniting into a single platform without starting from scratch
An organization seeking to develop a centralized system must first answer a series of difficult questions: Does it currently manage its onboarding process, know your customer / risk profiling, transaction screening, watchlist updates and other compliance functions in a way that allows for easy aggregation and report generation? Does it rectify and navigate the competing interests among executive, legal, sales and compliance departments? Finally and most importantly, do all of those functions interact with one another?
Once these questions have been answered, the development of a centralized platform begins. Creating a completely new platform from the ground up is difficult, considering most companies have existing processes and platforms they do not wish to abandon. Few organizations have the time, money or programming resources to develop a centralized compliance system from scratch that can seamlessly bridge all the various compliance functions and datasets without affecting the end-user experience.
Therefore, the logical solution is to integrate a platform within the company’ s existing systems that merges all those disparate systems and processes.
The many benefits of a centralized compliance system
From an audit and regulatory perspective, a centralized system not only allows a comprehensive means to aggregate data on the results of sanctions activity, but also provides a view on both specific and overall compliance efforts, including policies, procedures and controls. In other words, a company should always be prepared to show auditors what they are doing in terms of due diligence, as well as demonstrate the rationale underpinning how they are doing it. A centralized platform is invaluable if a company is asked by regulators to provide documentation showing that it is following appropriate sanctions protocols to prevent risk and meet legal expectations.
There are also financial benefits to implementing a centralized compliance system. A Dow Jones and ACAMS study found that 40 percent of companies surveyed exited a full business line or segment of business in the prior 12 months because of the perceived regulatory risk or their inability to manage that risk. 3 With a centralized sanctions system in place, these regulatory risks become far more manageable, allowing companies to pursue and retain lines of business that would have otherwise been considered out of reach.
Pulling together the various components of an effective sanctions screening program can seem unwieldy. Building a platform from the ground up might be improbable for most companies, given the scope of such a project and the operational implications. So, identifying a third-party platform that can serve as an interlocking system for internal departments, systems and data feeds can be a more realistic option. In leveraging such a solution, organizations can create a holistic compliance screening platform that centralizes all compliance functions into a single view.
Michael Brown, CAMS, vice president of product strategy, CSI Regulatory Compliance, Charlotte, NC, USA, michael. brown @ csiweb. com
3
“ ACAMS and Dow Jones Anti-Money Laundering Insights Survey,” 2016, http:// www. acams. org / download-your-aml-resources /
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