After hearing tales of love and war at FFECON22 this year, we thought we’d share our five big takeaways for those of you who couldn’t make it:
1) Know who you’re in business with
Andrew Feinstein, who served under Nelson Mandela in post-Apartheid South Africa, spoke of devastating consequences of corruption in the global arms trade.
TDLR: until the government catch up on legislation, it's up to the private sector to “Know Your Business” (KYB) and make informed judgments about who they do business with.
Xapien is here to help with automated deep due diligence reports that enable you to get a full sense of your counterparty, in a few minutes.
2) Traditional anti-fraud mechanisms aren’t working
We heard from Tinder Swindler victim Cecilie Fielhøy about how traditional responses to risk-flagged transactions let fraudsters slip through the net with devastating, and heartbreaking, consequences.
Have a better understanding of your customer can catch fraudsters early on. If banks had taken the time to really get to know Cecilie they might have seen earlier on that something was up.
Xapien’s reports provide genuine colour and context on clients. Banks can move beyond tick-box compliance to understanding a client’s circumstances which can help them to more effectively tailor their risk approach and ultimately catch fraudsters.
3) Sanctions risks aren’t going away
The new sanctions might be here to stay. Once imposed it is very hard to lift sanctions. Governments have to ask themselves “Are we prepared to lift these sanctions if Russia withdraws tomorrow?"
In the meantime, we’ll continue to provide real-time sanctions data via our integration of ComplyAdvantage’s cutting edge technology.
4) Know your AI
AI is useless if you don’t understand it. Far too many companies are keen to jump on the AI and “tech” bandwagon, without really understanding what AI is and how it can help solve their problems. AI’s most important value is that it can do the heavy lifting for you. But unless it delivers you a product that you can make sense of then you’ll spend just as much time trying to figure out what it has done as you would have done doing the work yourself.
Key Quote: “Too often I see AI as just a score. What you need is a clear explanation of what it found and why it’s significant”.
At Xapien transparency and good UI are central to what we do. We want to make it as simple as possible not only to run due diligence checks, but also to understand due diligence reports - where they came from and what they mean. All you have to do is decide what to do about it.
5) FATF are under the spotlight
Non profit organisations (NPOs) are holding FATF accountable for the suppression of human rights across the globe.
The morning panel agreed that autocratic regimes are using FATF regulation as an excuse to crack down on dissent and civil society movements. Stephen Reimer gave a great example of Alexei Navalny whose non profit Anti-Corruption Foundation (also his political vehicle) had been handed an “extremism designation”, likely as a way to shut down its operations.
Ben Hays from AWO Agency, a law firm and consultancy that deals with data rights and data protection, explained that FATF recommendation 8 on Combating the Abuse of Non-Profit Organisations has led to NPOs being excluded from the financial system.
Compliance process for NPOs are too onerous, leading to a lack of funding, preventing them from doing essential work.
At Xapien we are proud to work with non-profits and the institutions who can provide vital funding to them.
Our nonprofit clients use Xapien to make sure that work with donors and partners whose support will help to deliver their objective and grow their reputation, and not deter others.
The solution to all of these challenges: better due diligence. Only by really knowing who you are in business with will you be able to stop corruption, fraud, money laundering, and their devastating consequences in their tracks. Get in touch to find out how Xapien’s automated due diligence reports can help you to fight financial crime and onboard the right clients, faster.