In a post-pandemic world the use of new and emergent technology for the purpose of Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) compliance has never been more in focus for Mauritius than today. Ahead of our upcoming webinar, guest author Feizal Jownally, Managing Partner at BDO IT Consulting Mauritius shares his thoughts
Technology has the potential to assist in the combat of money laundering and terrorist financing (“ML/TF”) by making it faster, cheaper, and more efficient.
The world has changed essentially because of technological advancement. Financial systems, too, have undergone drastic changes in recent years, with new digital payment methods, virtual assets and an increasing number of online transactions. This explains why financial institutions are also replacing the traditional black-and-white rules approach with a more technologically focused, flexible and holistic programme, capable of detecting anomalies a lot more efficiently.
Technology can facilitate data collection, processing and analysis to help actors identify and manage ML/TF risk more effectively and closer to real-time as technology can be used for scanning enormous quantities of data far faster than can human beings.
In this regard, across Mauritius technology is used at different levels: at onboarding of clients, by carrying out Risk Assessments to assess risks posed by customers, Client Risk Assessment (“CRA”) and Business Risk Assessment (“BRA”); during a business relationship with a client in the form of transaction monitoring performed by tools which perform ongoing automated AML Screening, compliance monitoring and system review, suspicious transaction reporting and AML Audits.
Technology promotes faster transactions, more accurate identification systems, monitoring, record keeping and information sharing between competent authorities and regulated entities. Technology can improve risk assessments with the use of CRA and BRA Tools at onboarding and ongoing stage, relationships with competent authorities, auditability, accountability and overall good governance whilst save on cost.
When used responsibly and proportionally, innovative AML/CFT technology can help identify risks and focus compliance efforts on existing and emerging challenges. However, but manual review and human input remain very important across Mauritius in particular.
Technology can be used as an asset to improve ML/TF monitoring, through supervision, exchange of information with counterparts and more informed oversight of regulated entities. Technology enables the supervision of a larger number of entities, better identification and understanding of the risks associated to the different sectors of individual entities, live monitoring compliance with AML/CFT standards and action in cases of non-compliance, efficient communication with regulated entities and carrying out additional information requests and quicker exchange of information with other competent authorities.
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Feizal is Managing Partner at BDO IT Consulting Mauritius