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Keeping up with compliance: The responsibility of onboarding and how RegTech can help

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For any financial services operation, securing a new client is always a fantastic win. But the next step of actually onboarding that client can often feel the opposite.

It is a time heavy process which you absolutely have to get right. Compliance to regulations is, of course, vital, but it is not always the easiest to achieve with teams and compliance managers often snowed under – resulting in a slower task then anybody wants.

One instance of this, which may seem small but has big consequences for the onboarding process, are the recent changes to the JFSC AML/CFT Handbook, implemented on 31 May 2021, where a list of countries that were deemed to have equivalent regulatory regimes was withdrawn. The changes came as a direct result of aligning the JFSC regulatory regime with the Financial Action Task Force (FATF) 2012 Recommendations and industry feedback on further JFSC Consultation Paper.

These changes significantly affect the onboarding process and, while this can give more flexibility when it comes to a wide variety of jurisdictions and how they should be approached, it also means the onus of responsibility may fall even more heavily on the shoulders of financial services organisations when completing the onboarding process.

A successful RegTech solution, such as Vaiie Onboard, works to help financial services teams through these procedures, giving them both reassurance and the ability to work more efficiently.

For example, following the JFSC Handbook amendment requiring the inclusion of information on a limited partnership, company and partnership, the right technology will help find out the identity of persons who have and exercise strategic decisions - taking powers or have and exercise executive control easily via sophisticated client questionnaires and secure request functionality.

The removal of Appendix B of the JFSC AML/CFT Handbook significantly affects the need for the assessment of a country or territory’s risk and RegTech products have the sophistication to help with what could be a complex task. For example, Vaiie Onboard uses near real-time information from over 20 of the world’s most respected sources, with full reporting, a summary dashboard and sophisticated risk scoring to navigate and help complete this onboarding process.

Organisations will also need to verify identity and platforms like Vaiie Onboard can do just that, without delay, with irrefutable change and time tracking. By using regulated technology to assist with the onboarding process, financial services teams also have the ability to reduce their levels of risk.

Vaiie Onboard is designed to align with FATF recommendations, plus enforce local regulations and guidance for any and every jurisdiction required, such as those provided by the JFSC in Jersey. This enables organisations to instantly adhere to the JFSC AML/CFT Handbook amendments. The ability to quickly adapt to regulation changes and meet any new requirements quickly and efficiently means organisations can rely on their onboarding procedures and reduce levels of risk when changes or amendments occur.

Vaiie Onboard is a clear example of how new technology can help to navigate the burden of compliance whilst helping in the day to day onboarding of new clients. Nobody can dispute the absolute necessity for a strict onboarding process with required deep dives into any new client; it is vital for ensuring we operate within a jurisdiction that is respected and trusted all over the world. But now RegTech is stepping up to the plate to help make it less arduous and even more trustworthy.

As regulation develops and compliance continues to be one of the most important responsibilities of financial services teams, especially in relation to onboarding, RegTech is responding in time to help. The boom in technological advancement, means that financial services organisations have an opportunity to keep pace with regulators whilst helping their teams work in a fully compliant and efficient manner. Plus, as regulations change and are amended regularly, so does the continuous development cycle of RegTech, meaning when changes are coming, you know you have the very best tools at your disposal to be ready for them.

Essentially, RegTech is all about empowering financial services teams to work swiftly, compliantly and effectively manage risk, whilst going through an engaging online experience. Harnessing the very latest developments in the tech world, along with expert knowledge of the finance industry to make tasks that were traditionally resource heavy much faster, more efficient and more reliable – making for happy teams and happy clients.

Article first appeared in Connect Magazine Issue 104 on page 78.

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