The KiwiSaver, superannuation and wealth management sectors are gaining more attention from AML regulators. In New Zealand the AML/CFT regime is ‘risk based’. This means every reporting entity must assess the risk its business faces from money launderers and must ensure suitable policies and processes are in place to identify these risks.
Financial crime is becoming more complex. Accordingly, regulatory requirements are growing. Wealth management and superannuation companies face a variety of challenges regarding their AML/CFT obligations. Every reporting entity in the sector must conduct customer due diligence, transaction monitoring and regulatory reporting.
Regulators in multiple jurisdictions have raised concerns that reporting entities in these sectors may not have sufficient controls and operational tools to scan, monitor, and report to meet their AML obligations.
Working smarter with AML compliance automation technology
With more than 3 million KiwiSaver members contributing $4.8 billion in 2021 in New Zealand (FMA KiwiSaver Annual Report 2021), KiwiSaver providers face the increasing challenge of analysing enormous amounts of customer and transaction data to ensure AML compliance.
Worldwide, it is expected that total global assets under management will increase to 145 trillion USD by 2025 (PwC Asset and Wealth Management Trends 2020). And research suggests that only 28% of asset and wealth management companies have invested in digital AML solutions, to automate PEP (Politically Exposed Persons) and sanctions screening (Wealth Magazine DFM).
Technology is likely to be the key for KiwiSaver & wealth management providers, not only to minimize the risk of failing to detect financial crime, but also to decrease the time spent on these processes and increase effectiveness.
Using technology to increase accuracy and efficiency of your key processes, such as ongoing customer screening and transaction monitoring will also allow you to spend more time on high value tasks.
AML programme considerations for wealth management and superannuation companies include:
- Automated transaction monitoring systems should be based on rules that are designed to effectively detect suspicious activity given the specific risk profiles.
- The age of KiwiSaver and superannuation members could be considered as an essential factor in establishing rules for risk assessment, because older members are likely to have access to larger funds.
- For companies that offer both KiwiSaver and wealth management services, there will often need to be different risk profiles.
- An automated reporting system will be beneficial for KiwiSaver and wealth management companies, given the overheads associated with reporting and auditing.
This is how we can help you
Jade ThirdEye software and associated implementation and support services help organizations:
- Reduce the risk of financial crime
- Streamline the AML process
- Make compliance reporting easier
Software solutions such as Jade ThirdEye perform analytics to identify patterns of suspicious transactions, flag high-risk customers from PEP and sanction lists, and focus on what is required for essential assurance. Instead of manual processes, technology can automate the submission of SARs (Suspicious Activity Reports) and PTRs (Prescribed Transaction Reports).
Many wealth management providers are struggling to meet their AML obligations using manual processes and excel spreadsheets. Technology based solutions are available to save time and reduce the possibility of brand damaging non-compliance penalties.
Want to find out more about how Jade ThirdEye is empowering KiwiSaver and wealth management companies to comply with confidence? Request a demo below.