Thomson Reuters

2018 Thomson Reuters Anti-Money Laundering Insights Report

Executive Summary In May 2018, the Financial Crimes Enforcement Network’s Customer Due Diligence Requirements for Financial Institutions became effective. Three months later, Thomson Reuters partnered with ACAMS to conduct a survey of 253 anti-money laundering compliance leaders related to processes and activities used in response to “know your customer” requirements. The responses showed the impact the CDD Rule has had – and will continue to have – on the operations and practices of financial institutions. The survey shows organizations spent resources and time to address the new requirements, added staff and enhanced technological capabilities. Organizations also fine-tuned their typologies for alerts around CDD issues and sought to improve their response time to red flags with an eye to...

Business Reputational Risk in the KYC Age

Can you imagine your life without online shopping? It’s hard to deny the convenience. And, more importantly, the opportunity to research and read reviews. Reading peer reviews and a company’s reputation helps the decision-making process in making a purchase. And with the proliferation of online reviews and social media, reputation – even on an anecdotal level – is becoming more valuable for organizations. As Gloria Origgi, an Italian philosopher and tenured senior researcher at the French National Center for Scientific Research, stated in her latest book, Reputation: What It Is and Why It Matters (2017), “[f]rom the ‘information age’, we are moving towards the ‘reputation age’, in which information will have value only if it is already filtered, evaluated and commented upon by others.” In ...

Private Equity Firm Acting Like A Private Equity Firm

Here’s how private equity works: A firm buys a company with a lot of borrowed money. The now-p.e.-owned company borrows even more money to repay the p.e. owners. The p.e. firm resells the now-heavily indebted company on to the next sucker. Repeat. In layman’s terms, this is called levering to the hilt. It’s how private equity firms make money: Using leverage to extract as much as they can for themselves and their investors. But it is not the only kind of leverage available to p.e. firms. No! They can lever their leverage, especially when interest rates are laughably low. Leverage, after all, is just debt, and debt is just a contract for money, and contracts have to be negotiated, and the negotiator with more of the other kind of leverage is able to impose more of the terms of the contract ...

Five Ways to Help Combat Money Laundering

James Cummans at TCF National Bank in Minneapolis has fresh challenges each day—keeping up with latest developments in money laundering and other fraudulent actions. It’s an ever-vigilant process. “Fraudsters target weakness in banks,” says Cummans, TCF’s vice president of BSA operations. All it takes is for one bank to falter and fraudsters gain a new portal to launder money. That one bank’s weakness could affect the whole industry, bringing greater regulatory scrutiny down upon all financial institutions. As Cummans notes, “all major regulatory change has come as a result of catastrophe.” It takes a number of actions to fight against money laundering. We’ve compiled five tips from TCF Bank to take back to your own institution. Improve Searches with Technology It’s increasingly difficult ...

How Should Financial Institutions Assess the Accuracy of Third-Party AML Data?

As technology becomes more integral to financial industry regulation, data accuracy has become a leading concern for many institutions. In fact, a 2017 Thomson Reuters Legal survey of anti-money laundering (AML) professionals found that only 23 percent of participants express extreme confidence in their AML and customer due diligence (CDD) data vendors[1]. On a descending scale from seven to one, survey participants listed the following factors as their leading causes for doubt: coverage gaps in certain regions (6); timeliness (6); data structure, or the organization of records (5); and lack of data coverage definition (5). These four blind spots pose a serious problem for financial institutions (FIs) because the costs of bad data are steep. From the budget strain of reconciling false-posi...