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Managing shifting AML trends in the CaribbeanJanuary 6th, 2023
January 6th, 2023
As of January 2022, Credit Unions in Jamaica are required to screen transactions and customers against the United Nations (UN) and OFAC sanctions list. Despite the evolving threat and regulatory landscape, criminals remain one step ahead of Financial Institutions (FIs) and law enforcement. FIs must therefore have a comprehensive sanctions screening procedure to investigate and remediate any potential suspicious relationships, automatically report on suspicious activities and conduct due diligence on each customer.
First, let's look at some statistics. According to the Kyckr AML Fines 2021 report, anti-money laundering (AML) fines totaled US$3,224,875,355 globally, with 24 regulated institutions paying an average of US$134,369,806 in 2020. While the aggregate amount decreased to US$2,732,099,008 in 2021, 80 institutions were issued fines, each of which paid an average of US$34,151,237.
The considerable increase in the number of institutions fined reflects an increase in regulatory oversight and what is monitored across the financial sector, from a cost base it is important to be compliant. Applying these estimates to the Caribbean region, many of our smaller financial institutions would be unable to absorb or recover from a US$34,151,237 fine if found non-compliant.
Credit Unions are considered smaller players in the financial services industry. While they are required, at minimum, to monitor their members using the UN and OFAC sanctions lists, complying with these regulations is not convenient as there is no single, cost effective, sanction list you can check. Although both lists are available online and in various formats, they are difficult to manipulate and monitoring the available formats and updates can become incredibly challenging and costly.
Our UN/OFAC sanctions list screening solution was designed to meet credit unions and other small financial institutions where they are while solving AML compliance issues such as:
Manual AML compliance process, making a clear connection between a client and high-risk entities and individuals
Systems not capturing data in the way it must be reported,
Testing, validating and documenting risk models, pivoting risk models to allow for current developments
Establishing counterparty relations with international elements.
The reality is that credit unions currently lack the cost appetite for the solutions utilized by larger financial institutions (such as commercial banks), and maintaining compliance is nearly impossible without a proven, automated means of screening against UN/OFAC sanctions.
Symptai Watchlist is an affordable automated UN/OFAC sanctions screening solution using the Alessa Solution. It complies with the Bank of Jamaica Act for credit unions and other FIs while offering a more cost-effective alternative to other international solutions. To learn more about our sanction list screening service or to request a demo, please contact us.
