Moving on from the blame culture

Prevention is much better than proving it wasn’t your fault

It’s sad that compliance has become more about freedom from blame than about fighting financial crime. SARs are lodged after the fact, when they can do little but to demonstrate that reasonable measures were taken to prevent malfeasance.

While this may avoid non-compliance penalties, the cost of bad transactions – in wasted time, quite apart from financial loss shouldn’t be ignored.

The biz.Clarency compliance model is based around detecting suspicious activity before payments are executed.

Living diligence

The most important element of biz.Clarency’s due diligence engine is that it doesn’t stop at onboarding. Every transaction triggers an automatic re-examination of all counterparties, identities, export licences and more. This all happens in parallel with the payment instruction, so in most cases causes no detectable delay.

Transactional intelligence

When biz.Clarency scrutinises a transaction, it rechecks all of the information held on your customer. Any expired licences or identity documents are detected, and updates requested from the relevant parties. It collects data from invoices and shipping documents to identify individual vessels and routing – often direct from its interface with your customer’s accounting or ERP system. It analyses market values and container volumes to check they’re logical. The goods are compared with the associated companies’ trading histories, and anything that doesn’t add up generates an alert. If you wish, the transaction can be automatically paused until a decision has been made.

Transparent identity

When biz.Clarency identifies an individual, it does so by multiple factors, including analysing government ID documents for counterfeiting, tampering, or such means of faking identity. Smurfing is identified by powerful facial recognition that spots multiple identities. The result of this is that an individual who, quite innocently and legally, appears in different roles, companies or associations is positively identified. Even if the identity is held by non-associated banks, biz.Clarency recognises a single identity.

This vastly improves detection of potential fraud. For example, a bank can be automatically alerted if one of its customers is involved in suspicious activity on an account held in an unrelated organisation. This is done without impacting individuals’ rights to privacy, and gives criminals few places to hide.

Information deep dive

As you’d expect, biz.Clarency’s KYC digs deep into background information on companies and their associated officers. It hunts down adverse media, prohibited companies, PEPs, sanctions, prohibited goods… in fact all of the vital information that’s the essential driver of good diligence. We wouldn’t suggest that this is particularly ground-breaking; there are plenty of excellent KYC systems around – in fact, if you have a favourite, we’re more than happy to link it in as a biz.Clarency micro-service. Suffice it to say that our diligence engine is as good as any and better than most.

But that’s not what’s important.

When your risk officers examine KYC information, how many logins do they need to step through? How many different report formats do they have to work with and collate? Wouldn’t it be better if they could access one application and see an aggregated report, already scored according to your risk appetite?

One-click SARs

Preparing a Suspicious Activity Report can be a time-consuming exercise. That’s why banks widely struggle to meet the timely reporting criteria required by regulators. And the story’s no more encouraging for the regulators themselves. They struggle under a backlog of lengthy, complex documents that never reduces.

And who’s to say the report is completely accurate?

Sitting behind biz,Clarency is a next-generation blockchain technology that stores information in a manner quite unlike the usual distributed ledger approach used by traditional blockchains. You can read more about it here.

The interlocked nature of this storage system provides a level of immutability beyond the already high standards of blockchain. Not only that, but the information is stored chronologically. It includes every transaction, every supporting document, and every decision made throughout the account’s history. This vast information resource is already assembled logically, allowing incredibly rapid output of fully detailed reports. And that logical format makes them easier for regulators to follow.

At last, it’s possible to get on with business with improved security and fewer distractions. Instead of a barrier to trade, compliance becomes a key to opportunity.