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How Data Can Help Manage Regulatory Risk

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Plato Partnership and Tradeweb unveil Tradeweb Plato eBlock, a strategic partnership for European cash equity risk trading

By Chris Laws, Head of Product Development – Compliance & Supply at Dun & Bradstreet

The ability to trade globally and the strength of a business’s reputation is often an indication of overall success. Whether an organisation is a start-up or larger enterprise, successful growth is often tied to how effectively a business manages the relationships it has with its suppliers, customers and partners from around the world.

However, working with multiple partners across different countries also brings increased risk, and companies are faced with navigating a complex regulatory landscape. There is also increased focus on ethical practices, with businesses facing pressure from clients and partners, as well as regulatory bodies to “do the right thing.”It’s critical for businesses to have a full and transparent view of their operations to identify any potential risks and protect the company’s reputation.

Doing the Right Thing

Chris Laws

Chris Laws

There are now more victims of slavery than at any time in history, with the International Labor Organization (ILO) estimating more than 40 million people worldwide were impacted in 2016. With human trafficking the fastest-growing organised crime in the world, modern slavery increases supply chain risk for many organisations. In addition to the obvious ethical concerns, supply chain activities can expose a business to reputational damage and regulatory fines.The UK Modern Slavery Act has now been in place for more than a year, with companies over a certain size required to provide annual disclosure statements to confirm there is no modern slavery across their business or supply chain. Recent information from TISCreport indicates around half of businesses have not yet provided this information.

The recent introduction of the UK’s new anti-money laundering watchdog also places an increased focus on compliance with the 2017 Money Laundering Regulations. Although the regulations are necessary to counter financial crime to stamp out illegal activity, they add complexity to an already challenging regulatory landscape. The growing need for more transparency increases the amount of due diligence required when onboarding new customers. This inevitably uses more time and resources and can become a pain point for customers. A Dun & Bradstreet study found 75% of compliance professionals believe delays in due diligence have a negative effect on customer experience.

The Value of Data

So how can businesses manage the increasing regulations they face? In an age where evasion techniques are growing in sophistication, intelligent data and an automated process can enhance efficiency and accuracy. Businesses need to ensure they have verified, relevant and up-to-date information on every aspect of their business operations. Having access to that data is key to meeting mandatory requirements and regulations concerning areas such as Beneficial Ownership.

Alongside internal data, procuring detailed third-party data can also help companies identify and manage risks, protect against reputational damage and ensure compliance with the plethora of regulations. Getting hold of the data is important, but how the data is managed and applied is just as crucial.

A company needs to be confident in the accuracy of any databeing used to validate decisions or monitor regulatory compliance. There are three main types of available data: a company’s own data, proprietary information from third-party data providers, and historical records.  Using all three sources of data will form a comprehensive view of business operations and relationships. It’s also important to have data available in one, central location to all those who need it across an organisation.

In addition to supporting compliance, the right data can also unlock opportunities. Having access to certain information and insights can help businesses identify cost savings, such as inefficient or unprofitable supplier relationships. Having a detailed view of spend intelligence and insight into contracts and pricing can help accelerate business development and maximise value.

Delivering Data Dynamically

The UK Modern Slavery Act is one example of how companies are not keeping up with the increasing demands for regulatory reporting and compliance. Businesses need quick and effective access to insight on business relationships, especially in the midst of an ever-changing political, regulatory and economic environment. Being able to quickly pinpoint the right data at the right time is vital.

Technology and automation can significantly improve the effectiveness of due diligence. With so much data available, technology tools such as Artificial Intelligence (AI) and machine learning can play an important role in helping businesses find the information they need, quickly and efficiently. Technology can support more effective utilisation of time and resources, and help businesses be more agile by identifying the information via an automated process. We are already seeing companies implement Artificial Intelligence(AI) across different industries.

A Full and Transparent View

It is also important to review and monitor your existing suppliers and partners, in addition to completing due diligence on relationships with new third parties. There may be changes in ownership of your supplier’s suppliers that increase exposure or vulnerability to non-compliance. Having a full and transparent view of all business relationships is critical, and businesses need to draw on all three sources of business data: Internal data, proprietary information available, and historical data – to collate as much information as possible to ensure any decision made is an informed one.

In a dynamic and complex global market, businesses need to identify and mitigate potential risks before these risks impact their business and reputation. They cannot afford to wait for an issue to arise and using data to ensure compliance with regulation and to monitor business relationships is essential. Data allows businesses to protect themselves, spot the warning signs early and even identify opportunities for growth that were previously hidden.

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England soccer star Rashford nets younger buyers for Burberry

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England soccer star Rashford nets younger buyers for Burberry 1

By Sarah Young

LONDON (Reuters) – Burberry stuck to its full-year goals on Wednesday after a media campaign fronted by high-profile English soccer star and social justice advocate Marcus Rashford drew a younger clientele to the British luxury brand.

Higher full-price sales would boost annual margins and Asian demand remained strong, Burberry said, while warning that it could suffer more sales disruption from COVID-19 lockdowns.

Manchester United striker Rashford, 23, has won plaudits for his campaign to help ensure that poorer children do not go hungry with schools closed during the pandemic.

A first coronavirus wave last year cut Burberry’s sales by as much as 45% before a bounce back on strong demand in mainland China and South Korea, which continued in the last few months.

Shares in Burberry were up 5% to 1,825 pence at 0905 GMT, with Citi analysts saying that improved sales quality from fewer markdowns would drive full-year consensus upgrades.

Burberry’s 9% sales decline in its third quarter was worse than the 6% fall in the second, and the company said that 15% of stores were currently closed and 36% operating with restrictions as a result of measures to curb COVID-19’s spread.

“We expect trading will remain susceptible to regional disruptions as we close the financial year,” Burberry said, adding that it was confident of rebounding when the pandemic eases given the brand’s resonance with customers.

In the third quarter, comparable store sales in Europe, the Middle East, India and Africa declined 37%, hit by shops shut in lockdowns and a lack of tourists visiting Europe, but in the same period, it posted sales growth of 11% in Asia Pacific.

Burberry said that Britain’s new relationship with the European Union would cause headwinds, warning of a modest increase in costs to comply with new rules and also the impact of an end to a scheme for VAT refunds for non-EU tourists.

This would make Britain a less attractive destination for luxury shopping when tourism returns after the pandemic, Burberry said, adding that it would try to mitigate the effect.

(Reporting by Sarah Young; Editing by Kate Holton, James Davey and Alexander Smith)

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Alibaba’s Jack Ma makes first live appearance in three months in online meet

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Alibaba's Jack Ma makes first live appearance in three months in online meet 2

SHANGHAI (Reuters) – Alibaba Group founder Jack Ma met 100 rural teachers in China via a live video meeting on Wednesday morning, in the businessman’s first appearance since October, triggering a sharp jump in the Hong Kong listed shares of the e-commerce giant.

Social media speculation over the whereabouts of China’s highest-profile entrepreneur swirled this month after news reports that he missed the final episode of a TV show featuring him as a judge, amid a regulatory clampdown by Beijing on his sprawling business empire.

Ma had not appeared in public since Oct. 24, where he blasted China’s regulatory system in a speech at a Shanghai forum that set him on a collision course with officials, leading to suspension of a $37-billion IPO of Alibaba’s financial affiliate Ant Group.

Tianmu News, a news portal under Zhejiang Online, which is backed by the provincial Zhejiang government, first reported that Ma had met with the teachers via a live video conference on Wednesday.

The Jack Ma Foundation said that Ma participated in the online ceremony of the annual Rural Teacher Initiative event on Wednesday. Alibaba Group also confirmed that Jack Ma attended the online event.

Alibaba’s Hong Kong-listed shares jumped more than 6% after the reports of his reappearance, compared with a 0.64% rise in the Hang Seng index.

Ma’s public appearance comes as Alibaba plans to raise at least $5 billion through the sale of a U.S. dollar-denominated bond this month. Reuters reported the bond proceeds could reach $8 billion, which the e-commerce leader was likely to use for general corporate expenditure.

Alibaba is also the target of an antitrust investigation launched last month by Chinese authorities, who have in recent months accelerated a crackdown on anticompetitive behaviour in China’s booming internet space.

In the 50-second video, Ma, dressed in a navy pullover, spoke directly to the camera from a room with grey marble walls and a striped carpet. It was not clear from the video or the Tianmu News article where he was speaking from.

He addressed teachers receiving the Jack Ma Rural Teachers Award, who in previous years would have attended a ceremony organised by the Jack Ma Foundation in the Chinese seaside city of Sanya.

“We cannot meet in Sanya due to the epidemic,” he said in the speech, which did not discuss his whereabouts. “When the epidemic is over, we must find time to make up for everyone’s trip to Sanya, and then we will meet again!”

Xie Pu, founder of Chinese tech website Techie Crab, said the media and public had over-interpreted Ma’s move to lay low and that his step away from the public spotlight should not have been seen as a problem for Alibaba.

“We shouldn’t over-interpret his reappearance into public view this time, said Xie Pu, founder of Chinese tech website Techie Crab. “Alibaba still has a good governance structure — there are partners and a board of directors.”

(Reporting by Brenda Goh in Shanghai, Kane Wu and Sumeet Chatterjee in Hong Kong, Yingzhi Yang in Beijing; Editing by Tom Hogue and Gerry Doyle)

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ComplyAdvantage Releases State Of Financial Crime Report For 2021

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ComplyAdvantage Releases State Of Financial Crime Report For 2021 3

Designed as an must-have strategic roadmap for compliance teams, the comprehensive report covers financial crime insights related to fraud, cyber, and money laundering, the rise of crypto,

and the ever-changing sanctions landscape

ComplyAdvantage, a global data technology company transforming financial crime detection, today announced the availability of the firm’s much anticipated report The State Of Financial Crime 2021 Designed as a strategic guide for global compliance teams, the report lays out the many emerging threats that governments and financial institutions will face in 2021, along with prescriptive recommendations for implementing best compliance practices for combating financial crimes.

The research on which The State Of Financial Crime 2021 report is based was administered in November and December 2020. Interviews were conducted with 600 C-suite and senior compliance decision makers across North America, Europe, and Asia Pacific. The respondents represented enterprise banking, investments, crypto, insurance organizations, and fintechs.

One of the biggest challenges that compliance teams face is keeping current on the rapidly evolving regulations, and the advances of criminal behavior while balancing their organizations’ risk appetite.   Risk indicators are also becoming harder to spot as the amount of information available grows exponentially and the speed of change gathers pace.  This is why ComplyAdvantage has dedicated the company’s resources and  anti-money laundering (AML) expertise in order to help compliance executives mitigate regulatory risks related to the most extreme AML financial crimes.

The State Of Financial Crime 2021 delves into the most important financial crime trends that Compliance Officers are most concerned with in the coming year.  Specifically, these trends include increased fraud related to COVID-19 relief; risk vulnerabilities related to inconsistencies in global AML and counter financing of terrorism (CFT) system; 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.

A sample of key insights from the report include:

  • SARs filing was on the rise with 74% of respondents saying they filed more SARS in 2020 than the previous year
  • 93% of respondents stated that real-time AML risk data would improve their compliance operations
  • Cybersecurity and third party risk management were noted as organizations’ biggest compliance-related pain points in 2020. With 54% of respondents ranking cybersecurity as a top pain point.
  • 62% of respondents plan on upgrading their legacy systems in 2021.
  • 54% of respondents plan on replacing or upgrading their transaction monitoring system in 2021.

“Due to the massive economic, political and social disruption brought about by COVID-19, international crime syndicates, rogue nations, global terrorists and cyber-criminals have become increasingly more aggressive, “said Charles Delingpolefounder and CEO of ComplyAdvantage.  “Therefore, we felt it was imperative to prepare Compliance Officers and their teams for the potential onslaught of financial crimes driven by nefarious organizations.

Already the preferred choice of some of the world’s largest banks, enterprises and           high-growth fintechs, ComplyAdvantage uses 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.

ComplyAdvantage releases The State Of Financial Crime 2021 a comprehensive report covering financial crime trends related to fraud, cyber, and money laundering.  #compliance #financialcrime #AML #antimoneylaundering #cybercrime

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