The estimated amount of money laundered globally in one year is 2% to 5% of global GDP — that’s $800 billion to $2 trillion in current U.S. dollars. Though the margin between those figures is huge, even the lower estimate underscores the seriousness of the problem governments have pledged to address.
Consequently, any organization that moves money is subject to regulatory scrutiny. But, it’s clear from the compliance fines being levied that these institutions are struggling to meet their obligations. In fact, financial supervisors levied larger fines for anti-money laundering (AML) violations in the first half of this year than they did for all of 2019, as institutions repeated past compliance mistakes, according to Financial Times.
Data compiled by the consultancy Duff & Phelps shows some $706 million in AML penalties in the first six months of 2020, compared to a total $444 million in such fines imposed for all of 2019. The most recent penalties stem from compliance lapses around insufficient due diligence on new clients, improper management of AML measures, poor transaction monitoring and a failure to ensure adherence to compliance policies.
While Jumio has played an integral role in anti-financial crime programs for our customers through our suite of identity proofing services, we acknowledge that identity proofing really only addresses part of the problem. Financial institutions and other regulated entities still must integrate solutions to detect and report suspicious financial activity of existing customers that may be facilitating money laundering, terrorism and human trafficking. As it turns out, this is precisely the area where FIs are falling down and exposing themselves to sophisticated money laundering schemes, increased regulatory fines and reputational risk.
We know that many of our larger banking customers have had to cobble together several — sometimes 10 to 20 — different point solutions to combat financial crime and meet compliance mandates. We identified the following gaps in our product portfolio:
- Detect Suspicious Activity: This entails analyzing vast amounts of financial data and adaptively searching for subtle trends and abnormal activity that may suggest a pattern of money laundering.
- Simplified Case Management: FIs need a streamlined platform to investigate suspicious activity, document findings, complete a workflow and submit regulatory filing, all from a single interface.
- A More Holistic Approach: Organizations need to have a more comprehensive and holistic view of the risk associated with each customer that includes upfront KYC processes and ongoing AML screening and transaction monitoring.
Enter Beam Solutions
Today, we are excited to share that Jumio finalized an asset purchase agreement with Beam Solutions, a San Francisco-based startup to help solve these challenges. Beam will complement Jumio’s identity proofing capabilities, and extend our financial crime prevention and AML services. These are key ingredients to Jumio’s recently announced KYX Platform, a comprehensive end-to-end identity verification and eKYC platform.
With Beam’s transaction monitoring and case management functionality, Jumio customers can overcome a number of shortcomings associated with legacy systems, which are not built to support distributed teams and still rely on static rules that don’t respond to new patterns and simply can’t keep up. As a result, compliance teams are unable to effectively work remotely, waste a lot of time on false positives and sometimes miss the genuinely suspicious activity.
To avoid exorbitant AML fines, today’s financial institutions need a smart solution that enables their compliance teams to be responsive, adaptable and efficient — this is what Jumio now offers by integrating Beam’s AML screening and transaction monitoring solutions into the KYX Platform.
Leverage Beam’s APIs or file server to securely send us your transactions, customers, accounts, payment methods and any other relevant data you want to utilize in your detection model.
Our AML experts have created a library of standard rules to detect suspicious activity, plus custom-built rules can be tailored to your business needs. Our domain-specific models adapt to changing behavior and excel in a wide range of scenarios with superior accuracy.
Investigation & Filing
Our case manager empowers you to investigate the suspicious activity, document your findings, complete a fully configurable workflow, and submit regulatory filings … all from a single interface.
The detection process can learn from how you resolve cases, providing the ability to improve detection and reduce false positives.
Gaining visibility into suspicious activity is not only critical for understanding where potential money laundering and terrorist financing risks may exist, but it is also a fundamental step to reducing your compliance and reputational risk exposure.
We will continue to deliver more value to our relevant customers as Beam is further integrated with Jumio’s KYX Platform. The integration of Beam will empower regulated entities to capture data from the onboarding and CDD processes and leverage it as part of an integrated AML and transaction monitoring program. This more holistic approach, built on the cloud (vs. legacy software), simply makes KYC and AML processes more streamlined and efficient.
Beam’s AI-powered technology and team will be an incredible addition to Jumio in our commitment to make the internet a safer place and help you to digitally transform your business.