In an increasingly interconnected world, the traceability of financial transactions is becoming a crucial element in the fight against money laundering and terrorist financing. But not only for national and international regulatory authorities. Companies must be able to detect and provide a transparent, reliable, verifiable and, above all, explainable trace of any financial flow or transaction, in real time and at any time, in relation to sanctions lists (Assets Freeze, PEP, AME).
Traceability of financial transactions
Definition
La traçabilité des transactions financières c’est toutes les opérations, solutions, méthodes et outils qui permettent de garantir leur conformité. In fine, il s’agit d’être en mesure d’expliquer tous les flux financiers et, le cas échéant, de démontrer qu’ils ont respecté les règlementations de conformité en vigueur, notamment en confrontant ces transactions avec des ‘entités listées’ ou listes de sanctions (GDA, PPE, AME) afin d’en fournir une trace transparente, fiable et explicable.
How do you trace?
Une entreprise doit mettre en œuvre des outils et des solutions disposant de fonctionnalités permettant de valider efficacement l’ensemble du dispositif de conformité AML (Anti Money Laundering) et LCB-FT (Lutte Contre le Blanchiment et le Financement du Terrorisme). Il s’agira en fait de cribler ou filtrer et détecter les contreparties vis-à-vis ‘des entités listées’ ou listes de sanctions :
- Global and regional sanctions
- Asset freezes
- PEP and RCA (Politically Exposed Persons and Relative & Close Associates)
- Unfavorable media
- Beneficial Owners
- Identification of embargoed countries and currencies
- Private lists (Dow Jones, Acuris)
- Open data (INPI, ORIAS, deceased persons, etc.)
This will enable the company to provide compliance departments and regulatory authorities with an audit trail, or even clear and precise proof that it has complied with its obligations to monitor and detect behavior, or even security breaches, imposed by the AML-CFT and KYC (Know Your Customers) compliance rules.
Elements of suspicion on financial transactions:
- Unusual or abnormal frequency or volume of transactions
- Transactions to high-risk, sanctioned or embargoed countries or currencies
- Transactions to PEP, sanctioned or high-risk individuals
- Negative media coverage of customers
Challenges and obligations for companies
The obligations of companies are governed by the following texts:
- The European Payments Directive PSD 2 comes into force on May 15, 2021
- Articles L.514-4-1 to L.514-14-2 of the Monetary and Financial Code
- Law No. 2016-1691 of December 9, 2016, known as Sapin II, on the fight against corruption and the modernization of political life.
- Law No. 2017-399 of March 27, 2017 on the duty of care of parent companies and ordering companies.
- The European Directive on the Duty of Vigilance
The contribution of latest-generation RegTech
Le recours à des solutions RegTech (Regulatory technology) de dernière génération basées sur de l’Intelligence Augmentée – combinant intelligences humaine, collective et artificielle – permettra de répondre aux enjeux de traçabilité, tout en réduisant drastiquement le traitement des suspicions en permettant de disposer en plus d’une veille règlementaire automatisée ! Elles procurent le bénéfice d’outils interconnectés s’intégrant via des API à tous les types de fichiers clients ou tiers existants dans un SI, pour accélérer la détection d’anomalies et identifier en temps réel les transactions potentiellement criminelles. Les solutions RegTech limitent les tâches chronophages et répétitives grâce à une automatisation intelligente avec de puissants moteurs d’analyse et rationalisent ainsi les processus de reporting.
AP Filter instantly filters and detects transactions. The optimized interface of this turnkey Saas and Full API solution, integrated with Core Banking systems, delivers traceable and justifiable responses in real time, and remains effective on large volumes for matching transactions and customer portfolios with 'listed entities'.
- Compatible with various transaction formats: ISO 20022 (SEPA, SCT, MDD, MX), Swift FIN MT...)
- Filtering using over seventy criteria (names, countries, currencies, BIC, IBAN, etc.)
- Easily configurable reduction engine to minimize the number of suspicions and ensure smooth, risk-free transfers.
