Before getting to the nitty gritty, here’s an overview of what we’ve worked on over the past year:
FINTRAIL has also made some exciting changes to our business model, allowing us to better execute our vision. Here’s the new structure:
Consult which delivers our global consultancy and advisory work
Insights which produces detailed research, analysis and content creation
Pioneer which provides consultancy support to early stage startups and non-profit organisations
Ventures which invests in new anti-financial crime technology and building internal tooling
To support these exciting developments, we’ve been busy building a strong team at FINTRAIL. In the last 12 months we’ve hired Ruth, Tom and Andy and they’ve already made a huge impact!
Now, the details…
Just as FINTRAIL evolves so do our clients and financial crime regulation. The team have put together some of their perspectives and reflections from the year gone by...
James
Regulatory highlight:
In October FATF produced its High-Level Synopsis of the Stocktake of the Unintended Consequences of the FATF Standards. Acknowledging the negative consequences of anti-financial crime controls, such as de-risking or financial exclusion, can create a vital feedback loop for effectiveness and ensuring the financial system is open to those who need it the most.
Best project:
Being involved in the TechNation Financial Inclusion month was a reminder of the difference we can make and the influence we have as anti-financial crime professionals. It was great to produce the FinCrime Principles of Inclusion and I am looking forward to progressing these further in 2022.
Maya
Regulatory highlight:
There was a flurry of new regulations across the Middle East region last year, but I’d have to single out the UAE for making significant changes with a particular focus on financial innovation. This is reflected for instance in a new regulatory framework for virtual assets, and the issuing of Guidelines for Financial Institutions Adopting Enabling Technologies which set out principles and best practices for using technologies such as APIs, big data analytics and AI, biometrics, cloud computing, and distributed ledger technology.
Best project:
I really enjoyed working with an international bank designing a digital banking product targeting internationally mobile customers from high-risk jurisdictions. Expanding on work done in 2020, we continued to build out a system of controls that were tailored for the specific client base, and easy to implement and run across a small team. This was the perfect example of how two projects are never the same, and how generic AFC controls and procedures are often unsuitable for many firms and service offerings.
Mikey
Art market participants are required to be fully compliant with new UK money laundering regulations as of June 2021. This means having anti-financial crime policies and controls in place including customer due diligence, source of wealth and funds checks, and suspicious activity reporting.
Introduction of the biggest AML reform in the US since the Patriot Act — the National Defence Authorization Act (NDAA). The NDAA increases Bank Secrecy Act (BSA) related penalties, requires disclosure of UBO information as part of the Corporate Transparency Act 2020, brings virtual assets and antiquity dealers into the scope of BSA requirements, and has started to create a pilot program for sharing SARs with foreign branches / affiliates of financial institutions.
Best project:
Partnering with the Plaid FinRise incubator programme to provide training to founders from underrepresented and minority backgrounds on their financial crime obligations and requirements as new fintechs. This was a great opportunity for FINTRAIL to support a community that may not have equal access to compliance education and services, to help foster and further inclusion within the financial service ecosystem.
Greg
Regulatory highlights:
In the crypto world, this must be FATF’s updated Guidance on Virtual Assets and Virtual Assets Providers and its impact on the regulatory landscape worldwide.
On a European level, I would single out the European Commission’s package of legislative proposals to strengthen the EU’s AML/CFT rules presented in July, including the proposal to create a new EU authority to fight money laundering.
Best project:
Working as an interim resource across the 1st and 2nd lines of defence at a clearing bank. It is not very often you get an opportunity to build a bank from scratch. And the team is fantastic!
Jess
Regulatory highlight:
Whilst not quite a big regulatory change, I really liked the Wolfsberg Group's Demonstrating Effectiveness paper this year. It was a brief, to-the-point paper reminding us what the priorities are when building and measuring the effectiveness of anti-financial crime frameworks. Effectiveness is ultimately built on compliance with regulations, providing useful intelligence to law enforcement and having reasonable, risk-based controls against financial crime.
Best project:
Providing a range of support services to agents as they go through the onboarding process with their Payments as a Service Provider. We got to work with a range of products and maturity levels — helping agents build their framework from scratch, whilst also helping others refine their framework and close any gaps to meet their partner's requirements.
Sara
Regulatory highlight:
What has been interesting is observing how businesses in Singapore have been implementing the Payment Services Act (PSA) which came into force in January 2020, and how this is an evolving piece of legislation, particularly in terms of interpretation and understanding.
Best project:
Conducting an AML health check of an alternative banking product. It was interesting to work with a product that offers alternative banking solutions for customers that do not fit the profile of a "typical high street bank customer". They offer financial services for those who are financially excluded from the mainstream by poor credit or those coming to work in the UK temporarily. This also aligns with FINTRAIL's ongoing financial inclusion work.
Go on then. We’ll give you a sneak peak into 2022…
Entering into the new year, we’re excited to get our new business lines Insights, Pioneers, and Ventures fully up and running. We’re continuing to grow the team, with six new team members already, and hopefully more to come. We also look forward to supporting, serving, and working with our clients — new and old!
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