Financial crime has been on the rise across the world from individual phishing scams to organisations being held at ransom by hackers.
According to the United Nations Office on Drug and Crime, around US$800 billion to US$2 trillion – or an estimated two to five percent of global GDP – is laundered globally in a year.
Anti-money laundering (AML) and financial crime compliance are under increasingly stricter regulatory requirements in the insurance sector in order to safeguard customer interests even while enhancing the customer experience.
Financial Crime Compliance
Bharath Vellore, Managing Director of Asia Pacific of Accuity, a company that works in the areas of financial crime prevention, payments and counter-party Know Your Customer (KYC) solutions, in conversation with Connected to India, shared about financial crime, compliance and more.
“Financial and trade flows continue to be essential for regional economies and I believe we can all do more to prevent illicit actors from being a part of our system, even as we pursue growth on a macroeconomic level,” believes Bharath.
Bharath has built his career helping organisations across the region navigate increasingly complex regulatory requirements while preventing terrorist financing and money laundering, through the adoption of advanced and innovative Regtech solutions.
Regtech is the management of regulatory processes within the financial industry through technology. Financial institutions and regulators both use Regtech to deal with complicated compliance processes.
Bharath leads the company in the region which spans six offices with more than 80 employees, and serves enterprise customers in the BFSI (banking, financial services and insurance), freight and cargo, Designated Non-Financial Business and Professionals (DNFBP’s) sectors etc., spread across 32 markets in APAC.
Journey so far: Mumbai to Singapore
His career at Accuity – as well as the start of his life in Singapore – began nine years ago, when “I moved to our burgeoning Singapore office from India to take up the role of Key Account Manager. I am extremely privileged to work in APAC and to represent such a diverse and vibrant region”, says Bharath.
Before settling in Singapore, he worked in India for seven years in the financial services industry. Mumbai is where he first started his career after graduating from university.
Bharath’s current role at Accuity regularly takes him around the region to meet clients, speak at conferences, and expand the company’s presence in different countries and vertical markets.
“One of the main differences I have observed that makes Singapore unique from the other countries I have been to, is the meticulous urban planning that ensures the highest level of efficiency for the economy and its citizenry”, says Bharath.
This is why as a professional, the choice to relocate to Singapore for work was an easy one for him to make and “it has been such a seamless experience”, he adds.
On a personal level, “I am happily married to my Singaporean wife and that has ensured that I have not fallen into the trap of an expat cocoon”, says Bharath.
He feels that Singapore is a melting pot of cultures. “I am proud to say that I am fully integrated into the Singaporean way of life. I have learned to appreciate how diverse cultures from across the world have amalgamated into a multicultural, pluralistic Singaporean identity”, he says.
Financial Crime: Avoiding the Trap
Financial crime is a serious threat to the security and integrity of the global financial systems.
Although there are advanced frameworks, solutions and technologies that are constantly being improved and widely used by organisations, the most important thing organisations can and should do is to be educated and well-informed about financial crime, while embracing an internal culture of compliance.
“These help set the foundation within organisations and go a long way in eliminating financial crime”, says Bharath.
Web Series like Dirty Money: Glamourising financial crime
Crimes of all kinds have been portrayed in films for many decades and in the broadest sense, crime in itself is also a specific film genre.
However there is no evidence to substantiate that the portrayal of crimes in films has led to any increase or decrease in crime rates, said Bharath. “That said, unpacking a complicated theme like financial crime through film may help raise awareness amongst audiences”, he adds.
In fact capturing the important nuances of financial crime through visual-intensive mediums like films and documentaries may better engage and educate general audiences, increasing their understanding of the severity of various types of financial crimes.
“Since we are talking about Netflix content, I have found an original documentary series like ‘Dirty Money’, which dives into real instances of corporate corruption, securities fraud and creative accounting, to be both educational and compelling”, notes Bharath.
“The directors do a great job of interviewing anyone they can find who was close to the incident portrayed in each episode, and then inter-splice court or news footage in an eye-catching way. These make the series stand out from many other documentaries that simply focus on getting information out, rather than telling a story for the viewer”, he adds.
Most importantly, media content illuminates financial malpractices like money laundering and drug trafficking on various levels, and these are the exact real issues that Accuity’s technology is helping organisations fight against every single day.
Compliance 101: For the layman
Compliance is not just about making sure the processes and systems used within organisations follow the requirements that the regulators have mandated.
“It is about harnessing a culture of compliance within organisations to align its purpose with that of the regulations, in addition to addressing the need to be compliant”, says Bharath.
Financial penalties, together with the reputational damages caused by adverse media coverage, are the undesirable outcomes of non-compliance.
ICICI Prudential Life and Accuity
“ICICI Prudential Life Insurance (ICICI Prudential Life) is one of our key clients in the region and in India”, says Bharath speaking about Accuity’s major project with ICICI Prudential Life.
With a rapidly growing customer base of more than four million, anti-money laundering (AML) and financial crime compliance represents a considerable overhead for ICICI Prudential Life.
Compliance is also extremely important for leading players in the insurance sector, such as ICICI Prudential Life in order to uphold their reputation and integrity.
In 2005, the Insurance Regulatory and Development Authority of India (IRDAI) issued guidelines for the insurance sector to combat fraud and other financial crimes.
“As a result, all insurance companies were required to have AML and Countering the Financing of Terrorism (CFT) procedures to check and maintain sanctions lists, and flag risks during customer onboarding and throughout the duration of insurance policies”, says Bharath.
Accuity integrated its financial crime screening solutions with ICICI Prudential Life’s robust infrastructure by using built-in Application Programming Interfaces (APIs) and developed a solution that provided the highest standard of background checking, done in real-time and without incurring any negative impact to customers.
“Moving to the new system required process changes. ICICI Prudential Life therefore created a multi-disciplinary project team, bringing together stakeholders from various departments to oversee the transition. Accuity trained 20 people through a “train-the-trainer” project to educate them about the system, thereby enabling them to form more teams to train and equip stakeholders internally”, says Bharath.
The automated screening solution that Accuity has implemented for ICICI Prudential Life is a “win-win solution for both ICICI Prudential Life and its customers”.
Technological disruptions and playing catch-up
New and more advanced technologies provide the industry with unprecedented access to innovative compliance solutions and flexibility in how we use them.
They also provide criminals with sophisticated tools to bend the financial system to their own ends.
The fast pace of technological change and the ever-evolving nature of criminals mean that there is never an end state to a compliance solution.
“To stay ahead of the financial crime threat, it is highly essential that compliance policies and solutions continue to adapt to the constant disruptions”, sayd Bharath.
“This is precisely why we, at Accuity, have been proactively and continuously investing in enhancing existing and new solutions with innovative and sophisticated technologies to ensure that our customers stay at the top of their game”, he concludes.