Counter measures to combat AML and CTF are now of great importance worldwide, to governments and Central Banks alike. The publication of the FATF 40 recommendations, the Patriot Act (for those residing in and dealing with US banks), the EU Third directive on Money Laundering, the Proceeds of Crime Act in the United Kingdom and in Australia the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 all serve to increase regulation on Financial Institutions.
Most institutions are acutely aware of the potential damage to their reputation that can befall even the most prestigious of organizations should their AML procedures fall short of regulatory expectations. There is also the potential for litigation, regulatory body imposed fines and in the worst case, prison sentences for those involved. As time moves on further phases of the legislation will be introduced and the regulatory burden will increase.
SAFE matches names, and other details against published government sanction lists such as OFAC, UN, EU, HMT and DFAT that are regularly, and automatically updated; using phonetic and other sophisticated matching algorithms for rapid and accurate matching while minimizing false positives.
KYC builds its own Customer Data Repository (CDR) of document images, verification details, PEP indicators, beneficial owners, directors, and other relevant information; with notational fields added at every step of the data capture, risk review, and approval process for strong audit trails.
The Account Monitoring and Transaction Tracking module takes feeds of account movements, with embedded transaction types, from multiple legacy systems and passes them through a single Virtual Tracking Account (VTA) for the customer comparing the actual movements and transactions against a predefined series of rules.
The Message Screening module uses SAFE to screen specified fields (e.g. ordering customer, beneficiary) for all types of SWIFT messages. In less than 1 second, a full audit trail is enabled for individuals and their comments at each step of the authorization or failure process.
The Alert System is the repository where all alerts automatically raised within the interface, or by the bank’s staff, are recorded. Every step and every communication with the customer is logged with optional e-mails, word documents and scanned letters attached.
The cornerstone of the AML/CTF legislation is ‘Know Your Customer’. To be effective this has to be more than just KYC and Customer Due Diligence and managing customer documentation. It needs to be expanded to include the ability to identify unusual account activity that may be indicative of money laundering, understanding the risk profile of each client, identify the source of funds as well as the checking and re-checking of customers against available sanctions and PEP lists.
With our Anti-Money Laundering component, GIFTS can provide the necessary tools to assist in staying on top of these challenging regulatory requirements both now and in the future.
GIFTS is comprised of Core Banking, Retail Internet Banking, Anti-Money Laundering, Payment Processing, Merchant Acquisition, Card Issuing, and Mobile Payments solutions. As such, GIFTS delivers a comprehensive suite of banking applications for financial institutions of all sizes.