ComplyAdvantage Releases State Of Financial Crime 2021 Mid-Year Review

The mid-year report covers emerging insights related to geopolitics and sanctions, regional trends and the regulation of cryptocurrencies and decentralized finance services

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New York, NY, Sept. 28, 2021 (GLOBE NEWSWIRE) -- ComplyAdvantage, a global data technology company transforming financial crime detection, today announced the availability of the firm’s anticipated report The State Of Financial Crime 2021 Mid-Year Review.  Designed as a strategic guide for global compliance teams, the new report lays out many of the emerging threats that have appeared in 2021 so far , coupled with recommendations for implementing best compliance practices related to these topics.

The State Of Financial Crime 2021 Mid-Year Review delves into some of the most important financial crime trends that compliance teams should be concerned with for the end of the year and into 2022.  These trends include growing global divergence over cryptocurrencies; risk vulnerabilities related to inconsistencies in global AML and counter financing of terrorism (CFT) systems; the growth in sophistication of computer and mobile-enabled cybercrimes via payment systems; the continued use of sanctions as a tool of first resort and more.

From Geopolitics To Cryptocurrency Regulations 

The first half of 2021 has been a time of significant change in the world of financial crime. Traditional criminal supply chains continue to be disrupted, with law breakers evolving and entering emerging industries like crypto and distributed finance and modes of finance. Major changes are also being driven by the growing focus of senior policymakers on efforts to combat money laundering and terrorist financing. For compliance teams, a strong desire to avoid being placed on a Financial Action Task Force (FATF) blacklist is another incentive in favor of action.

That’s why this mid-year report will explore the state of financial crime across three key areas:

  • Geopolitics and Sanctions
    • In geopolitics, domestic political unrest and regime change has enabled countries to use sanctions to support their foreign policy objectives. Many nations have increased the use of sanctions as a retaliatory measure. 
    • In the UK, the end of the Brexit transition period has allowed the country to launch its own global anti-corruption sanctions program, an early sign of divergence with the European Union (EU). It’s clear that sanctions are only going to become more important as a tool of foreign policy in the months ahead.
  • Regional Trends 
    • Across the regional trends analyzed in this report, it’s clear many countries are prioritizing the fight against illicit finance with the US, EU and China revamping their AML/CFT frameworks. EU member states have scrambled to update their domestic laws ahead of the implementation deadline for the latest anti-money laundering directive (AMLD). 
    • The EU has also unveiled a swathe of new legislation including the launch of a supranational AML/CFT authority, and a new AMLD that member states would need to transpose.
    • In the US, regulators have published a number of updates on the implementation of the Anti-Money Laundering Act, including progress towards the creation of a non-public beneficial ownership registry. In the Asia-Pacific region, much change has been driven by FATF mutual evaluations at the country level, as well as technological advancements in China, Singapore, the Philippines and Australia.
  • Regulation of cryptocurrencies and decentralized finance (DeFi) 
    • There has also been much change in both technological innovation and AML/CFT regulation for crypto firms and virtual asset service providers (VASPs). Recent FATF plenary sessions have implications for crypto licensing, and what AML/CFT programs should look like for crypto firms and VASPs. More countries are also bringing forward legislation to implement the travel rule requirements, but significant challenges remain. 
    • FATF has also found that there are inadequate safeguards against VASPs being exploited by criminals. In Europe, very few crypto firms met registration requirements, with only a handful of fully regulated firms operating across the UK and EU. In the US, the Office of Foreign Assets Control (OFAC) took action against crypto firms found to have breached sanctions. 
    • China is cracking down on its crypto industry, particularly crypto miners, while in Hong Kong, access to crypto exchanges is being limited to professional investors only. 
    • Through the rest of 2021 stablecoins will continue to be reviewed, and the wider decentralized finance (DeFi) market will grow further. Many pilot projects are also underway to look at the viability of Central Bank Digital Currencies (CBDCs), with the Caribbean taking the lead in launching CBDCs for use in retail environments. 

“Our research is intended to help both customers and the financial services industry by providing insights with prescriptive measures so they can maintain the greatest level of risk management integrity, “said Charles Delingpolefounder and CEO of ComplyAdvantage.  “With areas from sanctions to cryptocurrencies evolving at such a rapid pace, what you don’t know can truly hurt your business.”

ComplyAdvantage offers a true hyperscale financial risk insight and AML data solution that leverages machine learning and natural language processing to help regulated organizations manage their risk obligations and prevent financial crime. The company’s proprietary database is derived from millions of data points that provide dynamic, real-time insights across sanctions, watchlists, politically exposed persons, and negative news. This reduces dependence on manual review processes and legacy databases by up to 80% and improves how companies screen and monitor clients and transactions.

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About ComplyAdvantage 

ComplyAdvantage is the financial industry’s leading source of AI-driven financial crime risk data and detection technology. ComplyAdvantage’s mission is to neutralize the risk of money laundering, terrorist financing, corruption, and other financial crime. More than 500 enterprises in 75 countries rely on ComplyAdvantage to understand the risk of who they’re doing business with through the world's only global, real-time database of people and companies. The company actively identifies tens of thousands of risk events from millions of structured and unstructured data points every single day. 

ComplyAdvantage has four global hubs located in New York, London, Singapore and Cluj-Napoca and is backed by Ontario Teachers’, Index Ventures and Balderton Capital. Learn more at complyadvantage.com.

 

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