How beneficial ownership can add crucial context to suspicious activity identification

The fight against money laundering and counter-terrorist financing is evolving like never before, and more external data sources are being integrated with compliance systems. Why is this and how can we make better use of beneficial ownership-related information?

As we discussed in the Bureau Van Dijk's "Beneficial ownership – have you got it right?" webinar, on which I was a panellist, one of the key drivers for the evolution of anti-money laundering (AML) and compliance programmes is the rising regulatory burden financial institutions face, such as from the Customer Due Diligence (CDD) Final Rule and the Fourth Anti-Money Laundering Directive (AML4).

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Beneficial ownership data empowers financial institutions to identify, validate and monitor companies and their owners throughout the entire relationship life-cycle, including prospects', and active, inactive and former customers' statuses.

Beneficial ownership data can transform the three fundamental components of an AML programme such as know your customer (KYC), sanctions screening and transaction monitoring. While the KYC and sanctions screening use cases are quite compelling, this article will focus on various ways in which beneficial ownership data can be used as an external data source to help identify suspicious activity for an institution's transaction monitoring programme.

To read this extended blog post in full, please visit this landing page to download a PDF, which you can also print out.

The sections it covers are:

  • The risk-based approach and external data
  • Market abuse and external data
  • The spectrum of suspicion
  • The small business owner
  • How banks detect businesses commingling illicit cash
  • Adding context one beneficial owner at a time
  • How beneficial owner data can add context to suspicious activity
  • The burden of context
  • Comprehensive coverage and certainty

Download the PDF