Two pieces of news last week caught my attention:
- the first
about the FIFA scandal http://www.nytimes.com/2015/06/06/sports/soccer/as-fifa-scandal-grows-focus-turns-to-its-auditors.html?_r=0
- the second about an internal investigation at Deutsche Bank
targeting Russian trades.
Both items are ‘news’ and yet nobody is surprised. If at all
there is curiosity it’s about “why did it take so long to come out”. In the
case of the FIFA scandal one old-style reporter (Andrew Jennings) has been
digging for close to 15 years to unveil the bribery, corruption and other mal
practices at the FIFA. Publishing several books and many articles about the
topic along the way.
I understand there’s a difference between common belief, pub
talk and hard facts. Proving money laundering or corruption is usually no mean
feat, certainly not in an international context and if hard evidence is needed
to pursue (criminal) investigations and prosecution.
But all these FIFA transactions were executed via (mostly) reputable
banks. And the Russian clients subject of the internal investigations have likely
been banking for years with Deutsche. Apparently the banks involved didn’t have
their AML/CFT act completely together. If onboarding processes, transaction
monitoring and periodic client reviews are done properly and management is acutely
aware of the risk profile of clients and transactions this could have been
detected early.
The work that i-KYC does, is exactly what could prevent these
findings: ensuring that staff have a thorough AML/CFT awareness, ensure that
the institution follows the right procedures and implementing an escalation and
management framework around the whole KYC program.
Have a good week.
