Implementation of beneficial ownership to increase transparency and ensure compliance

Implementation of beneficial ownership to increase transparency and ensure compliance

by Sean O’Malley, Head of AML and Sanctions Risk Assessment, State Street

Can you please tell the Risk Insights readers a little bit about yourself, your experiences and what your current professional focus is?

While my career has spanned across several risk disciplines, the past decade has been focused on Anti-Money Laundering Compliance and Operational Risk. My experience during that time has been on enterprise-wide risk assessments and risk quantification.

What, for you, are the benefits of attending a conference like the Fraud and Financial Crime USA Congress and what can attendees expect to learn from your session?

Attending a conference like Fraud and Financial Crime USA provides a forum to facilitate the sharing of ideas and best practices across the Financial Services industry. I look forward to sharing my experiences as a practitioner, as well as listening and learning from others about their experiences.

You will be joined by TIAA Financial services and First National Bank of Long Island for a panel discussion. In your opinion, what are the best ways of connecting risk ratings and risk assessments for increased oversight of the fraud threat landscape?

In my opinion the best way to connect risk ratings, risk assessments and fraud threats is to track fraud data by typology, incidence frequency (by typology) and amount.  Fraud trends change periodically, where one typology for exploitation by fraud may be common over a period of time and then change to a different typology. Tracking the data by incidence frequency, typology and amount can provide a key risk indicator of when certain typologies are emerging, enabling the institution to examine aspects of the processes involving that fraud typology to consider appropriate mitigation strategies to limit impact or reduce frequency.

How can financial institutions increase transparency and ensure compliance when implementing beneficial ownership?

The challenge to implementing beneficial ownership requirements is it often requires requesting additional information of existing customers. Obtaining information on beneficial owners increases transparency, but receiving it to apply your institution’s corporate standard for beneficial ownership can sometimes be challenging.

What are the key challenges of increasing transparency and customer confidence, and how can financial institutions overcome this?

One of the challenges to transparency is obtaining and sharing information, which is sometimes sensitive customer information. While customer confidence often improves with transparency, that confidence can be put at risk if the customers are concerned about the security and privacy of their information.

How do you see the impact of Fraud and Financial Crime evolving over the next 6-12 months?

I see the potential for increasing focus on Fraud and Financial Crime over the next 6-12 months – driven by ever-increasing regulatory scrutiny and the potential for increasing economic pressure, which typically impacts the incidence rates for fraud.

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