“Anti-money laundering is a big thing for any institution. We (at Ascentric) have payments in and out, we have tens of thousands of clients and money going both ways all the time”
Sean Hawkins, Strategic Partnerships Manager at Ascentric, noted the above and the overall importance of anti-money laundering (AML) requirements at our recent Open Banking roundtable.
All participants agreed that the AML rules are a vital component in fighting global financial crime. Platforms in particular have a duty to comply with the rules, not only because they are a legal requirement but because they have a duty of care to ensure that the DIY investors who may use their services are fully protected.
One of the challenges raised by platforms in doing this, was the manual effort that comes when you’re required to confirm with certainty the identity and source of who is using the service, as well as the destination of any money coming in or out. This is not only time consuming but can also add greater cost to the business.
Hawkins, confirmed these grapples by adding “If there is any amount that we can’t attribute, that kick-starts a manual process which is just added time and money”.
The topic of discussion at our roundtable, was how Open Banking may allow platforms to follow AML rules in a more cost-efficient manner by having greater oversight of cashflow at all times through the workflow process, and avoiding unnecessary manual interventions.
Effectively Open Banking, if enough data is provided, could present itself as an easier, more efficient and accurate form of filtering information that could assist platforms in their obligation to their stakeholders. By ensuring that AML rules are properly met, without the addition of human error, this will benefit consumers and the industry in the long run. Taking away the manual processes that ensue when there is any question about the source or the destination of the funds allows the manual resource the opportunity to focus on other aspects of their job, whether that be running the platform or giving the best advice.
In an industry where there is an inherent lack of trust it can be hard to push consumers to provide any more information than they already do. In order for the industry to take advantage of the obvious benefits of Open Banking, consumers need to allow their data to be shared widely. This will come by platforms building an open and understand dialogue with consumers about how their data will be used and, in the case of AML, how it will contribute to the safety of their money.