RegTech solutions to National Risk Assessment challenge

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Breaking down how regulatory technologies can help reduce risk, improve efficiency, and provide competitive advantage is what we do best.

As one of the many promising technology firms, focussing specifically on the Regulatory & Compliance Technologies, Vaiie loves nothing more than bringing innovation, industry collaboration, and cutting-edge technology to life.

Can technology really help support regulated businesses reduce the risks commonly associated to Money Laundering and Terrorist Financing?

The answer is most certainly – yes! However the answer does not lie solely on the implementation, delivery and deployment of newer technologies but the way businesses maintain their own internal policies and procedures and continuously evolve, meeting the ever-changing regulatory recommendations demanded by the standard setting bodies.

The NRA found Jersey is more likely to be exposed to the "layering" stage of money laundering – which typologies indicate regularly involve banks, trust & corporate services and or funds - rather than involvement at the "placement" or “integration” stages.

So, what is Layering?

Layering is a sequence of transactions that disguises the source of money and the ultimate beneficial owner. Instruments that offer cross-border transfer, speed, and volume, and lack transparency or regulation, are ideal. The more layers created, the more countries and assets involved, the harder it becomes to follow the money trail. Examples include electronically transferring deposits, buying and selling assets, using shell corporations or offshore banks, and working through intermediaries.

What is the right technology for my business?

Leveraging the right stack of technology within your current business process can reduce manual and often very time consuming tasks, ultimately improving operational efficiency, transparency and reporting. Beware the flipside! Implementing the wrong technology can be costly for your business, spend valuable project management and time resources in the wrong places and ultimately result in further inadequacies or mismatches leading to potential AML/CFT shortfalls.

The main vulnerability currently faced and clearly identified within the recent National Risk Assessment seems to follow a common theme and that revolves around the complexity of client structures and the way opportunists can potentially influence or socially engineer their way into obtaining local and industry leading financial services, commonly from funds, trust, corporate services and investment businesses, along with some banks. In addition Lawyers, Money Service Business and Accountants are also commonly targeted, and rather less would be local service providers such as Real Estate, Lenders, Insurance and Casinos, or not for profit organisations.


When researching the various technology providers within RegTech sector, you will clearly find a few common themes, none of which are particularly ground breaking or exciting in the world of technology but, in the world of financial services, these technology are still very new and are creating a wide swathe of disruption. To date, institutions have been slow on adopting these technologies, generally based on Cyber Security concerns and the threat of further vulnerabilities to the business.

The reality demonstrates that technology, security and private cloud infrastructure can be relied upon, far more so than the days when businesses kept all of their confidential client data on servers in the basement. We all know how messy that can become, and how it can highlight the unsuspecting firm on the global stage.

Rewind to 2013

Just seven years ago when a rather well known Company (MS) launched their suite of cloud services (365), the thought of implementing this change imminently to your business would have been absolutely laughable, the concept of hosting your private and confidential client data at the nearest data centre, which happened to be Ireland or the Netherlands, would have given all IT Directors cold shivers running down their spines.

Forward to 2020

Today, cloud deployment of operating systems and software is generally considered best practice with few firms opting to use their own capital investment infrastructure. Considering the entire IT framework as a provided service is a cost effective and resilient solution with data sovereignty secured by holding the data encryption keys locally, migrating to cloud SaaS model services was only inevitable.

So how can RegTech combat Layering?

The means by which criminals secure layering relies on providing the financial institution with false or misleading information, documents, or explanations, all of which might appear plausible but which, on comprehensive probing reveal the customer’s stated identity, address, source of funds, source of wealth, in fact cannot be verified within the context of the structure or rationale for the business, industry and country risk proposed by that customer.

That probing takes time and is expensive. A careful selection of RegTech tools designed to address these areas of ML/TF vulnerability offers powerful solutions, aiding, customer life cycle management, reducing administration time and speeding customer onboarding and help maintain exceptional levels of ongoing service delivery.

Compliant Onboarding Workflow

Best of breed multi-jurisdictional workflows with pre-determined KYC profiles (Natural Person/Legal Person/Legal Arrangement) written to FATF Recommendations while supporting local, jurisdictional requirements.

Artificial Intelligence Due Diligence

Industry leading enhanced due diligence reporting, driven by cutting edge AI technology, which will data mine both structured and un-structured data, translate foreign language and script, use fuzzy logic, de-duplicate and aggregate - far beyond the incumbent service providers currently and commonly used today for PEPs, Sanctions and Adverse Media screening.

Identification & Verification

A globally recognised and regulatory compliant identification verification tool, taking the customer through an intuitive and AML compliant verification process, with a variety of biometric validation steps.

Address Assurance

Accurate address assurance and validation via, leveraging a stack of authentication technology to establish the residential or registered office address: thus achieving a verification standard far beyond a PDF of a utility bill.


Continuous Client Monitoring ensures your clients are adequately screened and evaluated against ongoing PEPs, Sanctions and Adverse Media screening throughout the customer journey, providing instant notifications should a red flag be presented.

Beneficial Ownership Discovery

UBO Discovery has become a key factor when understanding, verifying and validating the true source of wealth and source of funds, with the latest in Company Registry searching, open source databases, deep web searching and AI technology, identifying ownership has become considerably more transparent, even in offshore jurisdictions many of which have not yet moved to public beneficial ownership registers.

Regulatory Alerts

The continual increase in regulation is becoming overwhelming, and almost unmanageable without intelligent systems, mitigating, reminding, and delivering key updates at the right time. For example, albeit for a mixture of industries, there are over 750 regulators globally issuing on average 201 daily regulatory alerts.

Review & Approval process management

Intelligent review and approval workflow processes ensures your administration team can review uploaded client documentation and approve or reject, along with the ability to add rejection notes.

Dashboard & Risk Indicators

Advanced dashboard and risk indicators are provided, ensuring your client onboarding team has a high-level summary along with the enhanced reporting capabilities.

Digital Signatures

Digital and legally binding client engagement is delivered through an advanced document bundling feature which is support by a qualified e-IDAS digital signature.

Outstanding Actions

Clear and concise outstanding actions logs, which enhanced the user experience and support with the correct data collection and validation requirements.

Client Dossier

Client dossiers are created and stored, ensuring future regulatory audits, and remediation exercises are delivered with speed, accuracy and integrity.

Audit & Reporting

Full audit and reporting and a wealth of management information is commonly delivered, ensuring your compliance department can report periodically on the progress, efficiency and profitability of your client onboarding targets.


Seamless integration to existing and proprietary wealth management and customer relationship management solutions is key when creating the ultimate compliance solution.

Closing statement

Technology, digital transformation and implementation doesn’t have to be disruptive to your business, core values or human capital, in fact, delivered with the correct level of planning, collaboration and efficiency, a Customer Life Cycle Management solution can provide your business with growing revenue, regulatory clarity and most importantly, continue to exceed client expectations with service delivery.

Trending Regulatory Technologies

Advanced data analytics, structured and unstructured data analysis, robotic process automation, cognitive computing, cloud computing, workflow automation, identification verification, address assurance, digital signatures, audit & reporting.

Article first appeared in the IFC Review on 20th January 2021.

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