- Increased scandals warrant an increased “know your customer’s customer” approach by banks to ensure they are proactively aware of any potential fraudulent behavior occurring among clients
- The obligation of protecting the financial system from criminals and terrorists lies not just with the financial services industry, but also the regulators and law enforcement
FIBA welcomed more than 1,300 people to its 16th Annual Anti Money Laundering (AML) Compliance Conference held March 7th to 9th in Miami. Regulators, policy makers and financial leaders from 42 countries representing 330 financial institutions and corporations shared expertise on the evolving trends in the AML landscape with the intention of enhancing overall transparency across banking and non-banking institutions.
Among the highlights from this year’s program the recent corruption scandals involving FIFA, IAAF and ITF that have not only made news headlines, but have also called into question the level of risk assessment partnering financial institutions should be applying to sports or entertainment federations. These cases have highlighted the obvious intersection between sports and finance because without proper financing, sport federations would cease to exist, placing both parties at risk and in need of a practical solution. Increased scandals warrant an increased “know your customer’s customer” approach by banks to ensure they are proactively aware of any potential fraudulent behavior occurring among clients.
In a different session, an in depth conversation with FinCEN Director, Jennifer Shasky Calvery, shed light on how the organization works and what their goals include. Ultimately, they’re not looking to “jail anyone,” least of all compliance officers, but rather find mechanisms to collect information. The obligation of protecting the financial system from criminals and terrorists lies not just with the financial services industry, but also the regulators and law enforcement. “We all are in this together,” was the message.
Finally, a subject directly related to Miami was the theme of one of the key sessions of this edition of the conference. On March 1, 2016, FinCEN’s third and most recent GTO on Miami took effect. Issued by FinCEN, the GTO is not meant to be a regulatory solution for issues, but rather a tool to understand the source of fraud, which is particularly high in this region. Currently, 22% of US real estate purchases are via all-cash transactions. The GTO requires that title insurance companies identify the true owners of shell companies, in an effort to prevent the laundering of illicit proceeds.
“The opportunity to facilitate an open dialogue between regulators and banks in one room is incredibly fulfilling and truly moves the needle on our industry,” said FIBA CEO, David Schwartz. “Compliance responsibilities and regulations may differ from region-to-region in terms of what’s expected by regulators and what’s realistic for banks, however, the common goal is to find practical solutions that protect customers, institutions and the overall system. This was our most successful event yet, and we thank our sponsors, partners and speakers who helped make it possible.”