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AML/CFT: Shift towards a risk-based approach to regulatory compliance

AML/CFT: Shift towards a risk-based approach to regulatory compliance

BY FATIME TRAORÉ, SALES DIRECTOR, CORLYTICS

REGTECHAFRICA MAGAZINE / / AUTUMN EDITION (Page 33-34)

In terms of regulatory affairs and regulatory change management in financial institutions, the stakes are high with regulators proactively investigating potential breaches of regulation around anti-money laundering (AML) and Counter financing of Terrorism (CFT) and then pursuing enforcement action. The imposition of sanctions or, in many cases, substantial fines can cause substantial reputational damage especially with the new accountability regimes making not just firms, but individuals accountable.

Up to relatively recently, the solution to the problem of managing regulatory affairs, change and compliance was to increase the number of people working in the regulatory affairs or compliance department and to support them with manual tracking tools and technologies including spreadsheets, intranets and email. However, this type of process, with significant manual data entry into non compliance-specific solutions and no automation, carries its own risk of human error and technology glitches such as corrupted spreadsheets and inappropriately routed emails. It lacks any clear audit trail for use either in-house or as proof to the regulators of correct and actionable oversight of regulatory compliance and support of operational resilience.”

Corlytics has always looked at regulation as a new class of risk and that to manage this risk there must be clarity, and that this clarity comes from collating global regulatory intelligence, categorizing it in a structured taxonomy and then carrying out a risk assessment. It is this strategy, to risk rate regulation, that is a key difference between Corlytics and others offering regulatory data.

“The explosion in regulations and regulatory initiatives from sources across the globe necessitates a change in how firms manage their regulatory compliance obligations if they have any hope of keeping compliance costs under control – Corlytics can help with this huge task,” says Fatime Traore, Sales Director, Corlytics.

Corlytics provides solutions to both regulators and global financial services firms across all regulatory classes.

It tracks and manages all types of regulations including those that are future-based, and regulations updates and changes with workflow auto-routing providing automation and end user visibility through a range of dashboards, heatmaps with drill-down granularity into each regulatory notification.

Recent demand for digitally available regulations that are categorized and risk ranked has exploded due to the pandemic. For instance, in 2020, over 50% of financial regulations were amended significantly due to the pandemic.

Corlytics risk rates the regulatory landscape using proprietary regulatory risk models. By risk rating regulations, jurisdictions, regulatory topics, business lines, products, and controls, Corlytics puts those managing AML/CFT and other areas of regulatory compliance back in control of how best to plan and invest their resource allocations. Data-driven decisions lead to better regulatory outcomes for regulatory firms, regulators, and ultimately the consumers.

Recent demand for digitally available regulations that are categorized and risk ranked has exploded due to the pandemic.

For instance, in 2020, over 50% of financial regulations were amended significantly due to the pandemic.

Dublin based Corlytics Ltd., the leading global regtech provider with a range of solutions and trackers including payments, crypto and ESG, recognises the importance of being focused on successful adoption.

The company, which works with banks and regulators across the globe to examine regulation as a risk, believes this is when customers will be able to experience the full power of advanced new technologies.

elaine.mullan@corlytics.com

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