Automation, Key Knowledge To Mitigate Money Laundering Risks

Q: The risk of money laundering has increased in recent years with the rise in digital assets adoption. How is that driving growth for anti-money laundering (AML) platforms?

A: The growing adoption of digital assets has brought new and different challenges for the industry.       High-profile cases, such as that involving FTX Trading, have pushed for stricter regulations, which in turn compelled actors to adopt AML platforms. We have been pleasantly surprised by our clients, especially those in the digital assets sector across five countries in Latin America. Most of those clients leverage technology to their advantage, unlike traditional financial institutions where there is some room to grow in terms of agility. This technological edge is crucial for efficiently implementing AML systems. Many clients proactively implemented AML processes even before regulations mandated them, which demonstrates their commitment to lawful activities.

Q: What types of financial institutions primarily use Complif's AML services?

A: We serve a broad range of financial institutions, from fintech startups and cryptocurrency providers to public asset management companies. Our clients include payment processors, credit card issuers, brokerage firms, banks, and global financial corporations. For example, we work with companies like Bitso, Pomelo, and Schroders. These entities, whether serving individuals or businesses, require robust AML processes, which we help them implement efficiently and scalably. Our vertical focus is 100% on the financial sector because we believe that understanding the specific needs of these clients allows us to offer a differentiated value proposition.

Q: What makes Complif’s platform the best option for companies to centralize and automate the AML processes of financial institutions?
A: The main issue we identified is the lack of centralization and orchestration of information. Often, financial institutions use different providers for identity verification, sanction screening, transaction monitoring, and document management. This fragmentation leads to integration complexities and inefficiencies. Complif's platform offers a centralized database with a 360° view, enabling the identification of illicit actors more effectively. We cover the complete cycle, integrating existing providers or replacing them, providing a comprehensive view to risk analysts.

Q: How does the Risk Matrix feature work and how can it be customized to meet specific regulatory requirements?
 

A: The Risk Matrix feature is designed to classify a client’s client portfolio based on risk and allocate resources accordingly, as allowed by the regulatory framework that permits a risk-based management approach. This allows financial entities to categorize clients by risk level and apply more or less extensive controls based on that classification, ensuring the efficient use of finite resources.

Our platform enables automatic risk segmentation, a task that was previously done manually in Excel. Automation allows for automatic and continuous application of controls based on risk levels, ensuring efficient resource use while complying with regulatory guidelines. Customizing the Risk Matrix to meet specific regulatory requirements involves understanding that risk factors are diverse and specific to each financial entity; it involves knowing the client. For example, banks may serve different segments or specialized verticals, such as digital assets or particular industries, and thus are best positioned to interpret their own risks. The regulatory framework allows each entity to compose its Risk Matrix using variables they deem appropriate.

Q: How are Complif’s clients making an impact in the industry? How does the platform allow them to be at the forefront?

A: Our platform creates significant efficiency gains, saving up to 80% of the time that AML analysts spend on repetitive tasks. This allows companies to either deepen their analysis with the same team or scale operations more efficiently. Technological advancements, particularly in AI, have enabled us to automate processes that were previously manual, such as document verification, significantly improving turnaround times and client experience. For example, reviewing complex documents like incorporation acts can be done in minutes instead of weeks.

Q: How does Complif help clients who are catching up to regulations?

A: Complif does not provide regulatory advisory services but has built a strong network of top-tier law firms and consultants in each country where we operate. This network serves two primary purposes. First, when clients come to us with regulatory questions, we can connect them with industry professionals who are best equipped to assist them. Second, these professionals help us ensure that our platform remains up-to-date and compliant with the latest regulations. This collaboration benefits everyone involved: clients receive a compliant platform, law firms gain clients who are meeting regulatory requirements and can focus on other issues, and clients can concentrate on their business operations.

We maintain these relationships in every country through a dedicated partner liaison. We also focus on educating financial entities about regulations, best practices, and technological tools through webinars, training sessions, podcasts, and our blog. These resources feature industry experts and offer insights into both legal interpretations and technological solutions to ensure financial entities remain compliant and efficient. Through these efforts, clients gain specific benefits tailored to their needs, keeping them informed and compliant with evolving regulations.

Q: How does transaction monitoring help in identifying unusual activities? What is the due diligence process like?

A: Transaction monitoring requires the continuous analysis of transactions against set rules to identify deviations from normal behavior or known money laundering patterns. When a suspicious transaction is detected, an alert is raised for further analysis. This helps in the timely identification of potentially illicit activities, allowing analysts to investigate and take appropriate action while complying with regulations.

Our ongoing due diligence process ensures continuous monitoring and updating of client information, not just at account opening but throughout the client relationship. This includes regular documentation renewals and monitoring transactional behavior. Our platform automates these processes, reducing the administrative burden on financial institutions while ensuring compliance with regulatory requirements.

Q: What are Complif’s goals and objectives for 2024 and the start of 2025?

A: Our main goal for this year is to double our client base, and we are on track to achieve this, nearing 100 clients in Latin America. We are also focusing on expanding our presence in Mexico, where we are seeing rapid growth and we just started to take our first steps in the US market. Looking ahead, we aim to continue investing in technology, particularly AI, to reduce compliance-related friction and enhance the client experience. We plan to develop new tools and improve our platform to better serve our clients' needs.

Complif is an all-in-one platform that centralizes and automates compliance and anti-money laundering (AML) processes for financial entities.