Compliance and AML professionals face a difficult task. Not only must they source accurate data from an often confusing partner landscape, but they must also use that data in a way that helps their businesses stay compliant, avoid risk and deter would-be criminals.
For people with so much on their minds, it makes sense that a few details regarding global registry data often slip through the cracks. Common mistakes lead to common misconceptions, which hurt even educated customers who do not see the need to question best practices or information they have known for years.
Complacency can be dangerous, though, especially when it comes to compliance. Let us take a look at a few common misconceptions held within the industry.
What Compliance Professionals Need to Know about Corporate Registries
As with all things data, corporate registries can be tricky, even for people who have been working with them for a long time. Compliance professionals may not always appreciate the scope and complexity of what goes on behind the scenes, even if the final deliverables meet their needs.
Although corporate registries are simply sources of information at their core, these data wells are far from easy to access, use and navigate. While the data that each corporate registry offers are legally reliable, the complexity of accessing that data increases dramatically every time data is required from a new country. This is one of the primary reasons so much time is spent on public data collection, which research shows consume 40-50% of a compliance professional’s time.
In addition to the time wasted on manual data collection, not all corporate registries house the same information. Compliance professionals may be surprised, but not all data is the same, even when it appears to come from
the same source or covers the same subject matter. All corporate registries have distinctly different data and formatting. Without proper care and experience, it is easy to mistake one format for another and end up with inaccurate information.
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That is why we are here: to make the difficult problem simple. Compliance covers a wide range of disciplines, and data rarely reveals its secrets without a bit of help. Kyckr has worked for years to become the best provider of structured data services, and today we have relationships with over 180 corporate registries from across the world.
What MLROs and CIOs Should Know about Global Registries
Leaders and c-suite members who deal with compliance understand that compliance is much more than a checkbox exercise. True compliance guards against the negative social impact that crime causes to society as a whole and it protects organizations from catastrophic breaches, hefty fines from regulators, and bad public press while providing actionable insights for revenue generation. That said, MLROs and CIOs should still consider how the pace of a quickly changing compliance environment can lead to knowledge gaps.
Here are a few key tips on global registries for executives with compliance oversight responsibilities:
- Be conscious of upcoming KYC regulation changes. Rules change quickly, and the lengths of time between changes are getting shorter. Regulators are catching on to inefficiencies in KYC and AML compliance, and soon, supranational organizations may begin to impose or call for stricter standards. Governments may take some time to catch up, but organizations should not depend on that buffer for leeway.
- Review AML/CTF and other application value chains. Companies cannot protect weak spots they do not realize exist. Review value chains to identify potential opportunities for synergy. Given the recent multiplication of both data sources and regulatory needs, including recurrent electronic reporting, and on-going monitoring, vigilance on this point will only become more critical as time passes.
- Assess the cost benefits of automating manual processes. Manual AML and KYC processes can lead to weak points and prevent companies from achieving their compliance goals. Assess the cost benefits of replacing these manual processes in favor of new technologies that enable automation to streamline compliance processes and reduce regulatory risks. The upfront costs may be higher, but the savings and protections are more than worth the investment.
KYC and AML professionals have to be savvy to be effective in their roles. As the regulatory landscape shifts to match pace with larger changes in finance and beyond, leaders and compliance officers must be ready to meet new challenges with complete, accurate and updated information and strategies.
Ian Henderson is CEO of Kyckr