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Government watch
Compliance Alliance
understanding will permeate throughout the business,” he says.
Beyond fostering company-wide support for compliance, executive buy-in itself sends a positive message to regulators, notes Andrea Corbine, a consultant
with SightSpan, a compliance support provider that works with many prepaid clients. “Executive support of compliance is not just
a ‘nice-to-have’ anymore; it’s now
a ‘need-to-have,’” Corbine says. “It’s something regulators and auditors are really looking for when examining regulated companies,”
New Markets, New rules
Ensuring AML compliance in the U.S. requires vigilance and ongoing updates, but the picture gets even more complex for prepaid providers that want to expand into new geographic markets—every one of which presents a unique set of regulations and compliance obligations. Helping providers overcome these challenges has be- come a major growth area for compliance support firms.
“Many of our clients are coming to us for advice on entering new jurisdictions,” says Craig James, CEO
of U.K.-based compliance support provider Neopay Ltd. But it’s not just a matter of knowing what laws a country has on the books, he notes. “It’s important to also under- stand the approach of regulators, particularly where it can seem that a firm is bound by conflicting regulations in different jurisdictions.”
Even in the European Union, which does have over- arching directives to help establish consistency across jurisdictions, each country has its own approach to enforcing AML guidelines, James explains. For the steady stream of U.S. prepaid providers seeking to expand into Europe, it’s vital to understand the unique aspects of each market, he adds.
Know Your Customers—
and Your Partners
When it comes to stopping money laundering and other types of fraud, the most important line
of defense often is the first one. Effective know your customer (KYC) procedures are an increasing focus of regulatory scrutiny. But prepaid providers entering new markets face the sometimes-daunting task of ensuring strong KYC procedures without the benefit of customer data sources that exist in more- established markets. “In places like the U.S., we have access to aggre- gated data, which aids in identity
she notes. To that end, SightSpan offers its clients specially designed courses to train executives and board members on compliance issues and expectations.
The emphasis on executive buy-in —and, presumably, the possibility of being held personally liable
for noncompliance—seems to be getting across to corporate leader- ship. Eighty-eight percent of re- spondents in the KPMG survey said their board members take an active interest in AML compliance efforts, compared with 26 percent who said the same in the 2011 survey.
Being able to provide global compliance support takes
a great deal of work on the part of
support firms, notes Andrea Corbine, consultant at global compliance specialist SightSpan Inc. “You have to have team members on the ground to really give you an accurate perspective of the nuances of each country,” notes Corbine. To develop its compliance plat- form, SightSpan worked country-by-
country with regulators, banks and prepaid providers in 56 countries within the Americas, Europe, Southeast Asia and the Middle East. “The majority of companies in payments have a global mindset and have at least explored global expansion, so it’s important for us to be able to support them wherever they want to go,” she says.