A brace of entrepreneurs has developed a solution to assist banks cut back the risks involved inwards remittances. Route Trading Ltd., launched past times Musa Jammeh in addition to Taimoor Iqbal, will introduce Money Router, a software solution, to London, Great Britain banks to forbid illicit money transfers.
Money Router, to live on introduced inwards September, is designed to ameliorate the security of global payments, enabling fiscal institutions to laid parameters inwards accordance with anti-money laundering in addition to anti-terrorism financing regulations.
Developed inwards London past times a squad led past times a compliance officeholder employed at a major Great Britain bank, in addition to a tech entrepreneur with a background inwards money transfer, Money Router is designed for both banks in addition to money service businesses (MSBs).
An Integrated Solution
Speaking to CCN, Musa Jammeh said:
Money Router is an integrated solution for banks in addition to their customers (MSBs). It is an integration of the money transfer organisation used past times MSBs for processing transactions in addition to the MSB’s depository fiscal establishment accounts used to collect the monies beingness transferred.
The banks demand to monitor the money coming into their accounts from the MSBs customers. By integrating the depository fiscal establishment accounts with the money transfer system, banks tin grapple the end-to-end anti-money laundering (AML) compliance of the money transfer transactions inwards 1 place. They tin attain this past times using regularly updated in addition to compressive AML databases in addition to regulatory registers such equally the FCA Payment Services in addition to HMRC Money Services Business registers.
Overseas workers oft transfer component of their profits to families abroad. As migration has increased worldwide, the full value of these “home remittances” to emerging economies has doubled that of directly unusual aid. But since much of the sector is unregulated, it has been linked to money laundering in addition to terrorism.
Banks Are Constrained
Banks, fearful of fines, have got been missing out on pregnant revenues in addition to contributing to fiscal exclusion past times exiting the remittance sector for the next reasons:
1) Inadequate visibility over MSB activities of transferring money on behalf of their customers;
2) Lack of anti-money laundering (AML) monitoring systems to bargain with MSB on-boarding in addition to real-time transaction monitoring;
3) Increased regulatory emphasis on the risk-based approach to AML monitoring;
4) Lack of awareness alongside MSBs nearly money laundering regulations in addition to techniques used past times criminals to wash money inwards the remittance industry;
5) Terrorist attacks past times returning Islamic State fighters.
Existing Software Insufficient
Speaking to CCN, Taimoor Iqbal said:
Existing depository fiscal establishment in addition to MSB software systems are non able to position high endangerment money senders in addition to receivers inwards a timely manner, because the banks’ in addition to MSBs’ systems are non integrated. As a result, the identification of high endangerment money senders in addition to receivers is done on a manual basis, past times banks call for the MSBs for the identity in addition to address documents of MSB customers in addition to manually conducting searches to verify them. Often, past times the fourth dimension this manual procedure is completed, the money transfer transactions have got already been processed past times the MSBs, leaving the banks vulnerable to potential high-risk senders in addition to receivers.
Some banks tin position high-risk customers for their directly customers (mostly through manual searches), Iqbal noted. “In the representative of MSBs, banks are required to monitor the customers of their customers, i.e., the customers of the MSBs, in addition to this is where the challenge is, because banks create non have got information on the MSBs’ customers (i.e., the senders in addition to receivers of the money transfer). The solely agency to larn this information automatically inwards existent fourth dimension is to integrate the money transfer organisation with the MSB’s depository fiscal establishment accounts equally inwards Money Router.”
Money Router communicates with AML endangerment databases that concur the names in addition to addresses of both individuals in addition to companies, equally good equally sanctions, known criminal, terrorist, county courtroom judgments, etc. “These databases are provided past times our partners, are regularly updated in addition to available online almost circular the clock,” Jammeh said.
Jammeh added:
Once information nearly novel MSBs, their owners, senior management, customers or transactions is entered inwards the organisation in addition to saved, our proprietary algorithms are triggered similar a shot to deport searches of these databases in addition to and thus role the results returned to calculate a endangerment grade which in addition to thus classifies the MSB, private or transaction equally either high, medium or depression endangerment based on laid thresholds, which tin live on configured past times the banks.“
Because these processes are run during the processing of the transaction or registration of the MSBs or their customers, nosotros are able to instantly verify their information equally shortly equally it is saved inwards Money Router in addition to position high-risk scenarios.
How Risks Are Identified
Customers are identified equally high, medium or depression endangerment based on a scoring organisation that takes several endangerment criteria into account, in addition to and thus calculates a grade which is compared with thresholds that define high, medium or depression risk.
Iqbal said:
We have got criterion endangerment criteria, such equally whether someone is on a sanctions lists, is a politically exposed person, is sending money to high-risk countries, etc., in addition to banks are able to configure these criterion criteria (which already covers all the cardinal anti-money laundering endangerment indicators) to accommodate their ain requirements.
Although the MSBs role the same system, they are non able to modify these rules, in addition to if their customers or transactions are non compliant with this regulation, Money Router automatically classifies them equally high or medium endangerment equally appropriate in addition to blocks the transaction. This mightiness to position a high-risk MSB client or transaction inwards real-time (although it may live on available to unopen to banks for their directly customers) is non currently available to banks for their MSB customers, in addition to this is where our niche organisation comes inwards handy, he said.
MSBs Under Siege
According to a World Bank written report from 2015, over one-half of money transfer companies have got had at to the lowest degree 1 depository fiscal establishment trouble organisation human relationship closed, in addition to 28% of principals – the people who have money – in addition to 45% of treatment agents – who pay out overseas – have got no depository fiscal establishment account. In the States in addition to the U.K., scores of MSB depository fiscal establishment accounts have got been closed past times major banks inwards the past times few years.
Helping Banks to Expand Overseas
Money Router is designed to supply fiscal institutions the chance to opened upward novel overseas accounts. The tool volition also encourage money transfer companies who oft detect it hard to opened upward a novel facility with high street banks.
Featuring real-time processing, Money Router issues a alarm betoken prior to the authorisation of a transaction, reducing the endangerment for mistake in addition to preventing fraudulent transactions.
The 2nd end-to-end, identity verification organisation checks both the private in addition to society involved inwards a money transfer against the most up-to-date compliance databases, enabling banks to approve solely the transactions that come across the standards they set.
System Has Been Field Tested
Money Router has been champaign tested for almost a twelvemonth with existent money transfer transaction past times MSBs in addition to their integrated depository fiscal establishment accounts (through depository fiscal establishment contention downloading application programming interfaces), Jammeh noted.
It does non require whatever changes to banks existing systems or to MSBs’ depository fiscal establishment accounts, in addition to the configurable compliance rules have got been tested too. All a depository fiscal establishment would demand to create to role it is to configure these rules in addition to larn compliance staff to review the endangerment scoring in addition to flagging results, inside the dashboards in addition to workflows, in addition to thus approve or decline transactions in addition to individuals identified equally high endangerment past times the rules.
Featured ikon from Shutterstock. Story ikon from Route Trading.