Tell us about yourself and your organisation
Back in 2006, after many years working in the offshore finance industry, and experiencing the massive changes in compliance and risk assessment that came into force in the late 90s and early 2000s, I decided to establish a research tool based on country AML risk. Initially, the focus was on high-risk countries but very quickly, as the need for licensed financial service businesses (“FSBs”) to understand AML risk on a country-by-country basis grew, our product morphed into KnowYourCountry, which is now recognised as one of the leading on-line providers of geographical AML and Terrorist Financing data and information.
What kind of data does Know Your Country provide?
Our original focus was on our country profiles and although that remains a very important part of the service that we provide, around 2010 we built our country AML risk ratings table, designed to give our customers a quick overview of a country’s perceived AML/CFT risk. The risk rating tool is a composite index covering all the recommended risk elements required to assess country risk and all data is sourced entirely from government and regulatory agencies and authorities.
What is your involvement with Muinmos?
Around 3 years ago, I was delighted to be approached by Remonda at Muinmos, who were looking for a geographical data solution to enhance their client onboarding product. I’d been aware of Muinmos as they are perceived as a real ‘mover’ in this and the regulatory market. Through our API, we have been providing our data to Muinmos ever since.
What are the key trends you are seeing that are impacting financial institutions?
Over the last couple of years, we’ve seen far more focus on geographical risk and for many organisations this is one of the first areas assessed in the client onboarding and review processes. In the past, FSBs were able to rely upon a simple risk rating or banding system, but as country risk assessment has evolved, we see an expectation from regulators for a proper consideration and monitoring of country AML risk that encompasses a number of risk elements.
But there are other key areas of country risk that FSBs should be aware of. For instance, I think that there will be more focus in the near future from regulators on how FSBs are determining country AML equivalence, which is a very grey area at the moment, with the risk elements needing to be assessed are different to a country risk assessment that is undertaken when onboarding or reviewing a customer.
Another trend that we are seeing is in the Virtual Assets industry where regulators are now expecting country risk assessments to include some type of country risk assessment specific to that industry – a difficult task in view of the fast-moving regulation being implemented in that field in many countries around the world.
Obviously, the assessment and monitoring processes for country AML risk overall have become far more onerous for compliance teams in FSBs and I think that everyone is now looking for solutions that will make their lives that much easier.
What do you think clients need to be most aware of in terms of jurisdictional risk in 2023?
I think that the major issue for financial institutions will be the requirement by regulators to show that FSBs are fully considering and understanding country risk assessment, and all this entails. This will include a need to properly document the reasoning behind any country AML risk assessment, whether arising from customer onboarding, country equivalence or internal jurisdictional policies.