EXCLUSIVE INTERVIEW: No Let-up In The Focus On Compliance - BankersAccuity

Tom Burroughes

3 January 2013

Editor’s note: This publication has carried several recent articles about the importance of wealth managers heeding the ever-increasing weight of anti-bribery and anti-money laundering legislation. Asia is a region that, given its varied legal systems and history, needs to be particularly mindful of these issues. (To view the sort of issues that arise, click here.) Here, we speak to Simon Lemos, director, Asia Pacific, and David Pan, product manager, risk compliance group, at BankersAccuity.

Some background: In the autumn of 2011, Reed Elsevier acquired the entire issued share capital of Accuity Holdings from Investcorp, a global investment firm, for £343 million ($559.8 million). In a statement at the time, Accuity was described as a “leading US provider of online subscription-based data solutions for the financial services industry which enable customers to maximize the accuracy of their banking and payment transactions, and to minimize the risk of non-compliance with government regulations in these transactions”. Accuity was seen as being a “highly complementary business” with both Reed Elsevier’s Bankers Almanac and the financial services business of LexisNexis Risk Solutions. So BankersAccuity was born.

How have recent anti-money laundering cases, such as those affecting Hong Kong/London-listed HSBC, put a focus on such issues?

Lemos: “A lot of the cases now being reported on go back a number of years. Compliance is still a relatively new thing for some of these organisations. We are seeing historical breaches where organisations have fallen short. We are committed to ensuring we deliver robust and fully integrated solutions to banks and in a cost-effective way.” One issue for AML compliance is what happens when one has joint ventures, as in China and other countries, he said. “It needs a very clear approach and it needs to come from the very top.”

“Senior management have taken some active decisions to circumvent the system What has now happened is that banks are sitting up and taking notice.”

David Pan: “This is also, in my opinion, a political tool or message from the US to banks that they their sanctions compliance is not just a set of rules but something they take very seriously.”

Asian trends?

Pan: He spoke of increasing pressure exerted by the blacklist of poor AML regimes as ranked by the Financial Action Task Force, a body set up by Group of Seven industrialised powers in 1989.

“It isn’t an enforcement agency but what it can do is make life for certain jurisdictions difficult and challenging to do business in. If you are on the FATF’s high risk list it makes it very difficult to facilitate business there. It is forcing banks in these countries to impose their AML controls and policies so they can get off this list,” Pan said.

“We are seeing more countries starting do something about their AML policies,” he said, giving the example of Thailand where the country’s central bank has moved to improve controls across the board and ensure all of the nation’s banks act together. “We are seeing a similar drive in Vietnam where the central bank is trying to procure data,” Pan said. Hong Kong, meanwhile, enacted new laws relating to AML in April this year, he said.

Lemos: “People looking at the data, analyse `red flags’ and need to make a judgement call,” he said.

“All banks are looking at sophisticated software to have protections for all their systems,” he said. Global challenges and increasing footsteps of clients in emerging markets call for a system that is a standardized means to achieve compliance.

What sort of patterns of demand?

Pan: “It’s no mystery that Asia is a growing economy in the face of slow or stagnate growth in other parts of the world. With this growth of course comes regulations that must be adhered to, from the FATF being ever a more the authoritative force in the fight against Money Laundering and Terror Financing to increasing sanctions enforcements, 2013 is a year that will continue today’s trend of increased regulatory awareness.”

“And we see this trend from countries such as the Phillipines moving to enact newer AML laws to the revised AML policies in Hong Kong to the centralised efforts in Thailand and Vietnam, the region as a whole is progressing towards more stringent standards, which means we have a lot of work to look forward to,” he said.

Lemos: “Banks in Asia are looking to put in screening systems or to improve the efficiency of what they have already.”

How does BankersAccuity work in this sort of space?

The firm has a Professional Services Group and advises and guides banks on their own systems and processes, Lemos said.

“We have enjoyed good growth in Asia and globally. Of course, integrating these two large organisations over recent months has had its challenges but we are now reaping the benefits of being a stronger combined organisation,” he continued. “We are seeing more big cases hitting banks’ revenues and getting onto the front pages,” he said.