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By The Editors
03 September 2020
Where Do You Begin To Ensure Regulatory Compliance?
Defined as ‘The natural person(s) who ultimately gains from, owns or controls a legal entity’, Ultimate Beneficial Owner (UBO) is a fundamental component of performing due diligence. Due diligence is the process of taking reasonable care and effort to examine or screen potential partners/customers prior to entering into a transaction where it is a branch within the regulatory compliance roadmap. Still with me? In short, identifying UBO is part of the due diligence process while ‘due diligence’ is part of the broader ‘regulatory compliance’. But of course, UBO and due diligence are only pieces of the whole Regulatory Compliance puzzle.
To combat Anti Money Laundering (AML) and Terrorism Financing, federal bodies are frequently piling on new regulations or stricter measures – and organisations can barely keeping up. An already complex and cumbersome process, companies today are expected to walk the regulatory compliance tightrope while reciting π…backwards. Understanding UBOs for one, is essential to the due diligence process but it can be a challenge due to multiple metrics, lapse and/or conflicting information.
Organisations without a dedicated compliance team are worst off, monitoring and maintaining current UBO information without sacrificing efficiency is often a pipedream. Navigating the labyrinth of an entity’s beneficial ownership structure and identifying the UBO from varying ownership stakes are going to require more than a pair of keen eyes. Often, depending on the country and its legislation, an organisation is not obligated to disclose extensive information about its UBO as well.
‘Onboarding’ your due diligence process
More companies are either employing integrated compliance platforms that consolidates data from multiple sources or shifting to continuous monitoring to automate their due diligence processes. As the name suggests, Onboard is a regulatory compliance solution that overcomes the pain points of performing due diligence by congregating multiple information sources and tools onto a single platform to speed up secure customer/partner onboarding. Data can be shared across the enterprise to ensure information consistency between departments and users. This is extremely pivotal for some industries (mainly banks and financial institutions) where conducting an Enterprise-Wide Risk Assessment (EWRA) is mandatory to stay above board. To minimise your exposure to reputational risk and enhancing know-your-customer (KYC) checks, Onboard covers major watch, sanction and politically exposed people (PEP) lists. Onboard enables you to confidently ascertain who you’re truly doing business with and when you should no longer. Read more on the power of insight and calculating UBO here.