Why inefficient onboarding costs you more than you think
The real problems businesses face when trying to stay compliant with regulations.
My Observations from Practice
With a career in regulated entities for over twenty years, I have experienced a continual increase in the compliance burden and three observations stand out.
Firstly, companies tend to underestimate the importance of compliance and only after regulator action (against them or their peers) do they suddenly find the budget to increase compliance resources. This leads to the second observation, that firms tend to throw people at the problem. As a result, thirdly, the client acceptance process becomes more complex, and more people from the sales, compliance and servicing functions get involved.
The outcome? A lose-lose situation: clients get frustrated with a lengthy process that they do not understand; staff become frustrated and demotivated; and the business loses time to reach the fee-earning or client delivery part of the process. Which is where their focus should actually be. Even worse is that even then they might not be meeting the regulator’s minimum expectations.
Regulatory Challenge
One difficulty that licensed entities face is that compliance obligations have evolved and increased over time, so firms often pieced together solutions as the need arose. As a result, many businesses find themselves now with a semi-manual, fragmented compliance process using different bits of technology for different aspects. A surprising number subscribe to client screening services but save these results elsewhere, then input those findings to a manual risk assessment excel sheet.
Binderr was developed as a regulatory technology (or Regtech) platform to tackle these challenges head-on and offers a complete compliance package for any business subject to AML/CFT obligations. This article highlights how Binderr helps regulated entities to reduce staff and client frustration, and enjoy a shorter time to revenue through a smooth and efficient client onboarding flow.
Collecting Client Information & Identity Verification
The Client Acceptance journey in Binderr starts with a basic client profile, then a customised questionnaire may be sent to the client directly through Binderr - any information already provided will be pre-populated. The form permits client identity and address verification to be carried out digitally and remotely, in accordance with EU legislation, the eIDAS Regulation (Electronic Identification and Trust Services for Electronic Transactions in the Internal Market). Prospective clients and involved parties are screened for PEP involvements, against sanction lists and adverse media, with any hits and comments thereon recorded.
Corporate structure unravel
Any companies that a client is involved in may have its corporate structure mapped out through Binderr’s connections with some 500 company registries in over 140 jurisdictions. This provides a corporate structure verified directly from source, that a client may confirm in one step. The structure mapping tool also makes it very easy to add any other subsidiaries or involvements that would not appear on a registry, such as mandates, power of attorney or control by any other means.
Client Risk Assessment
Binderr offers an industry-leading risk assessment tool that pulls together all the risk factors a client may present. No less than thirteen jurisdiction risk lists that are continually updated may be used separately or together. Risk weightings are tailored to each company’s risk appetite. All information provided by the client or that a firm has discovered is mapped out to a client risk profile with the highest risk factors clearly emphasised. The client profile may then be reviewed, with any findings, decisions or comments added, risk scores may be over-ridden manually, leading up to client acceptance/rejection.
Futureproof
We do not have a crystal ball to foresee what future compliance will look like, but there is a clear trend for regulators to hold subject persons to ever more stringent levels of due diligence, record-keeping and reporting. A strong regtech platform, Binderr is here for the long haul and will continue to invest in cutting-edge solutions to evolving compliance challenges.
Will Binderr fit your needs?
Reach out with no obligation, let’s chat about your current compliance processes and any pain points you may have.
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At Binderr we are on a mission to make the onboarding and compliance process easier and more efficient for subject persons. Binderr supports any business subject to AML/CFT obligations, in industries spanning Notaries, Legal and Tax advisory, Trust & Corporate Service Providers, Fiduciaries, Banks & Financial Institutions, Fintechs, Asset Management and Real Estate operators.
Binderr operates in the main international financial centres in Europe, UK and the MENA region, with a further expansion roadmap ahead.
