On February 1, in Argentina, UIF Resolution No. 14/2023 (the “Resolution 14”) was published in the Official Gazette, which modifies the regime of “Prevention of Money Laundering and Financing of Terrorism” (PLA/FT) applicable to the listed financial and exchange entities (the “Obliged Subjects”). The rule will enter into force on April 1, 2023, the date on which UIF Resolution No. 30-E/2017 will be repealed.
The “Obliged Subjects” they must take into account new parameters and assumptions when analyzing their clients as well as when launching businesses; In turn, they must adapt various mechanisms for the qualification and segmentation of their clients..
Thus, financial institutions must analyze the risks of ML/FT derived from its types of customers, products and services offered, distribution channels, and geographic location prior to the launch of products, practices, or technologies. Also the modification stipulates warning signs that the “Reported Subjects” must take into account when analyzing transactions, among other changes.
In this context, the banks are on the front lines of the costly battle against money laundering. In 2020, financial institutions spent 213 billion pesos in compliance with financial crimes worldwide, 18% more than in 2019. Meanwhile, recent estimates set the impact of money laundering at between 2 and 5% of GDP. worldwide, that is, around 800 billion pesos. This means that $2 trillion flows into the hands of terrorists and traffickers each year (United Nations on: Money Laundering).
Today, the exponential growth of fraudulent transactions and new ways of carrying out operations “cross border” led to financial institutions, in addition, being exposed to fines. This can generate significant damage to its reputation, which negatively affects the confidence and valuation of the company before potential investors and shareholders.
Agustina Atlante, Head of Compliance at Celeri, stated: “For many years, organizations have managed in a good way with their legacy PLAyFT (Prevention of Asset Laundering and Financing of Terrorism) or AML (“Anti Money Laundering” processes) environments, without seeing the need imposed by the market to innovate. . We now see that the equation has shifted: forward-thinking financial services organizations are embracing modernization across the compliance and money laundering prevention lifecycle”.
In this direction, Atlante points out that: “Some key points where organizations are innovating are the due diligence of know your client (acronym in English: KYC, ‘Know Your Costumer’), the monitoring of transactions, the alerts for analysts to focus their investigation under the parameters established risk assessments, case management and reporting”.
Take the initiative of digitization and innovation from the banking sector
To help organizations make the products they offer more efficient and protect users, today there are SaaS (software as a service) tools that combine compliance with money laundering prevention and make it possible to eliminate the difficulties caused by these processes.
Celeri experts point out that The incorporation of this type of solution in the financial industry offers the following benefitsamong others:
- Manage emerging risk and anomaly detection using risk matrices based on transaction log and chart analysis.
- Assist in targeted monitoring of high-risk customer segments.
- Optimize case management automation.
- Offer robust model administration, documentation, and governance capabilities.
- Optimize risk scoring using algorithmic techniques to identify patterns based on the use of historical transaction tracking data.
Risk reduction, time saving and profit optimization
Cloud technology has forever transformed businesses and the systems landscape. The convergence of compliance and money laundering prevention technology, in conjunction with the cloud, offers a single, integrated software-as-a-service (SaaS) solution that addresses the entire customer value chain in their financial experience, including the KYC, transaction monitoring and regulatory reporting. These solutions increase and simplify compliance programs while reducing the cost of errors and inefficiencies found in most standard money laundering prevention programs.
The Celeri expert concluded: “On our side, we seek to achieve the right balance between precision and speed, being allies of all the agents of the financial institutions: providing the tool to the systems sector in its favor, supporting the compliance area so that it can focus its time in the monitoring of transactions, in its planning strategy for the application of regulations and not in the manual loading of information, in addition to generating a CRM and an agile and centralized customer database”.
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