Autorenname: fiserconsulting

On July 5th 2016, the European Commission published a proposal to amend the Fourth Anti-Money Laundering Directive (AMLD4). Slightly more than one year later, the regulation marks its implementation date. As of June 26th 2017, all obliged entities will have to comply with the new framework. AMLD4 aims to mitigate the heightened risk of money laundering and terrorism financing activities. The Directive received a substantial amount of support for implementation after multiple financial institutions showed system malfunctions and ineffective crime security controls. The directive’s considerations vary from its predecessor in terms of scope expansion and traceability. The proposed adjustments relate to enhanced Customer Due Diligence (CDD), Beneficial Ownership and public disclosure.   Customer Due Diligence   Customer Due Diligence (CDD) is a critical element for effectively managing risks and protecting systems against potential financial crimes and nefarious activities. Financial institutions and organisations will be required to become more data driven and create risk-based internal models. They will be required to improve the current risk assessment tools for assessing and monitoring economic activities of its local customers and global branches. Beneficial Ownership One of the biggest improvements in AMLD4 is the approach to the Ultimate Beneficial Ownership (UBO). The objective is to require financial corporations and legal entities to accurately gather and maintain beneficial ownership data, while also sharing this data with appropriate government agencies. Public disclosure of information Lastly, the Directive requires national authorities and financial firms to allow public access to beneficial ownership information. This information should be coordinated and aligned and it should comply with the stated requirements of the framework. For example: information about tax criminals that are also UBOs should be disclosed to relevant authorities and third parties in order to prevent abuses in offshore banking. In conclusion, AMLD4 aims to strengthen security, openness and risk assessment between financial institutions and entities. The regulatory framework is expected to consolidate the AMLCTF internal units and to improve the scope of the current Customer Due Diligence and transaction monitoring analysis.

An article has been featured on one of the top leading consultancy websites where our Senior Consultant, Paul Nielsen, reflects on the growing trend towards RPA adoption across the globe, and provides an overview of the trade offs involved. The article can be found here.

On February 23rd 2017, the European Banking Authority (EBA) announced the final Regulatory Technical Standards (RTS) on secure customer verification and communication. The European Central Bank (ECB) and EBA have been working closely together in order to finalise the RTS under the PSD2 regulation. The final RTS offers a strong foundation for an open and secure market in retail payments in the European Union zone. The completion of these standards took an intensive 18 months of policy development, collaboration between stakeholders and integration of their differing views. Drafting the PSD2 Regulatory Technical Standards was not all plain sailing. It has resulted from different trade-offs between various and, at times competing, PSD2 objectives, i.e. facilitating customer convenience, enhancing security, protecting security, as well as contributing to the integration of the European payments market. The EBA received over 200 reverts on its published Consultation Paper, in which concerns were raised in regards to certain RTS items. The EBA addresses these concerns in a table which supports the RTS, including issues such as the exemptions from the application of strong customer authentication on the basis of risk level, and the amount and recurrence of transactions, as well as the payment channel used for the execution of the transaction. In line with these concerns, the EBA has also introduced an exemption on transaction risk analyses based on defined fraud levels and on payments at so called ‘unattended terminals’ for transport or parking fares. Moreover, the EBA has also removed previous ISO 27001 references and other specific characteristics on strong customer authentication. The final RTS draft also addresses the communication channels between different payment service providers. This decision is connected to a part of PSD2 that does not allow the current practice of third party access without identification. The PSD2 regulation is set to be applied 18 months after adoption of the RTS by the EU Commission. The original article can be found here.

EU and U.S. regulators have ultimately defined the final follow-up steps regarding the Solvency II negotiations. The agreement relates to ensuring consumer protection and to contributing to a heightened regulatory certainty for insurers and reinsurers active in the EU and U.S. zone. The Solvency II reconciliation paper comprises of three areas which are significant to supervisors. The paper includes agreements relating to reinsurance, group supervision and the exchange of insurance information. The last paragraph of the agreement was added by the U.S. Congress on January 13th 2017. Essential actions for completion are to be taken by the European Council and Parliament. The idea of middle ground on Solvency II was envisioned to take place late 2016 when in November a joint public statement was released, stating that EU and U.S. representatives are making progress in ‘identifying negotiation points of convergence and areas requiring further work’. Following November, the December statement specified that the regulators made ‘significant progress’ towards establishing a final agreement. The original article can be found here.

Santander leaving the R3 Blockchain technology consortium is another sign that Blockchain is approaching the ‘Peak of inflated expectations’. Every financial institution has initiatives or Blockchain proof of concepts in progress but industry wide adoption will only be established when the ‘Through of Disillusionment’ phase in the Hype Cycle is passed. Gartner Inc’s ‘Hype Cycle for Emerging Technologies’ is a framework for many strategists, planners and global market developers to follow technology trends. The Hype Cycle provides a wide cross-industry perspective collected from more than 2,000 technologies. Taken together, the perspectives shape a to-the-point list of trends and technologies that should be considered in developing emerging technology portfolios. The 2016 Hype Cycle for Emerging Technologies distinguishes three trends that will play an important role in changing the innovation of digital business. The Hype Cycle assists businesses in how they can accurately respond to the rapid technological changes. The key technology trends are: Transparently immersive experiences: the accelerating pace of technology innovation will give rise to a transparent connection between people, businesses and things. The perceptual smart machine age: the occurrence of so-called ‘perceptual smart machines’ will enable businesses to store a great amount of data to accustom to contingent situations or to solve sudden problems. The platform revolution: new platforms continue to arise from emerging technologies. The co-dependent integration of these eco-system platforms support the development of new business models which minimise the gap between humans and technology. The components of the Hype Cycle are believed to have a great impact on the strategic planning of organisations, enabling an active business culture of competitive advantage. The original article can be found here.