Solutions

Relaxed into the compliance audit – seamless audit reports at the touch of a button

5 min read

Jan 12, 2024 1:27:58 PM

Imagine creating compliance audit reports at the touch of a button. The result is seamless audit reports that meet the strict requirements of compliance and risk management.

A daily KYC & AML check of your customer list is an indispensable task for compliance managers, costing time and resources. Especially, when authorities are constantly updating sanctions lists and the associated terror and embargo lists. You have to document the results of your comparisons accurately, efficiently and audit-proof. The higher your number of clients, the more time-consuming it is.

Meeting regulatory requirements, but how?

If sanctions and embargo lists change, financial sanctions by regulators change – against countries, individuals, companies or institutions. The best example is the impact of the current Russian war against Ukraine.

Depending on the size of the company, you are suddenly faced with a considerable risk assessment effort. The amount of time and effort required to carry out flexible customer screening adapted to risk criteria using paper, Google and Excel are very high and difficult to manage. Documenting this effort in an audit-proof manner is significantly greater. That sounds tedious. It is.

Concentration on core business despite audit announced at short notice.

In case an auditor announces an audit, there are only 3-5 days left to prove KYC and AML measures. In addition, the auditor requires complete documentation that you have identified and monitored business partners, customers, and organizations as high- or low-risk.

The list below clearly shows the benefits of an automated compliance workflow with Pythagoras Solutions:

MANUAL KYC & AML PROCESS	PROCESS WITH PYTHAGORAS
Make sure that all relevant lists are also checked.	AUTOMATED – reference data gets updated every night
Ensure that all groups of people are checked, including customers, suppliers, handling partners, etc., i.e. all persons involved in the respective process.	AUTOMATED – defined in the data selection
If pre-specified customer data or other relevant data changes, take this into account and check again.	AUTOMATED – changes will be checked and re-screened
Ensure that the relevant departments cooperate in coordination and that information is passed on.	All users and departments work on a unified system, with defined user groups and roles
Ensure that responsible personnel are appropriately trained and receive ongoing training.	User training is part of our implementation process
Plan for early and ongoing sanction list review. For example, a check should be performed as early as the order initiation stage, additionally when the order is placed and, most importantly, again before the actual delivery.	AUTOMATED – sanction lists updates and screenings happen overnight
Build appropriate control mechanisms into your order management system.	AUTOMATED – unresolved alerts remain visible and review dates are preset
Ensure that the inspection carried out is documented accordingly.	AUTOMATED – full audit trail on all actions with user name and time stamp
Create a work instruction and/or checklist for the exact procedure. This will prevent misunderstandings among your employees. Otherwise, colleague D will think that the sanctions list check will be taken care of by colleague A, and vice versa.	Best practice workflow….
Work these instructions into your existing export control mechanisms.	no need
Talk to your IT department about the possibilities of embedding checkpoints in the IT system.	AUTOMATED – reporting can be used to detect left behind tasks
Check regularly – on a random basis – to ensure that all requirements are being met.	Systematic
Inform your employees how they should behave if persons, companies, etc. to be checked are found in the sanctions lists.	AUTOMATED – risk categorisation can be configured and ….
Determine who in your company is to be informed in this case.	AUTOMATED – escalation to certain user groups can be configured
Determine how to exclude cases of name similarity.	AUTOMATED – fuzzy logic, normalization and whitelisting possible
In the case of U.S. transactions, also take into account U.S. control law and U.S. lists.	AUTOMATED – OFAC and US sanction updates in th reference data

The auditor finds the weak points…

…of your risk management process. That is what auditors are paid for. Not only do you have the duty to audit, but you also have to report high-risk identified clients in a timely manner and you owe the proof of audit-proof, traceable, unchanged audit trails.

Comprehensive KYC & AML risk management

You have to develop risk criteria that indicate business relationships with increased risks and are adapted to the form of the company. You also need to document the implementation of this further requirement.

For example, the Financial Action Task Force (FATF) provides non-finitive lists of possible risk criteria relating to money laundering.

How do you comply with these requirements and document the workflow, including the audit results and your decisions – without significant additional effort?

Automatic compliance workflows with audit-proof audit trails

Audit security through audit trails of the compliance workflow means that documents subject to retention may demonstrably not be changed or deleted. In addition, it must be possible to prove when they were stored. To ensure this, you must set up suitable control and protection mechanisms. Regarding the various risk criteria such as sanctions, PEP, high-risk clients, and many more, you must be able to verifiably demonstrate the corresponding decisions made internally.

With Pythagoras Partner Screening , you can comply with the specified guidelines, laws and regulations. You pass the compliance audit safely thanks to the audit-proof, transparently traceable audit trails.

Automated Know-Your-Customer and Anti-Money Laundering Screening

Pythagoras Partner Screening performs daily data reconciliation with official and commercial reference databases through automatic overnight updates. The software documents the results unalterably, with the highest data security and in accordance with global compliance and financial guidelines. This includes alerts, hits, decisions, access rights, and roles, which you define according to internal compliance routines.

Partner Screening simultaneously takes into account name variations in different languages and spellings, such as Cyrillic or Chinese.

Audit reports with a few clicks

With Pythagoras Solutions, you create your audit reports in no time at all and prove that you have fulfilled your obligations. This way, you can easily avoid the dreaded consequences of a compliance audit.

Pythagoras Compliance Software saves money, resources, and your nerves:

Daily check of sanctions, embargoes and negative news – automatically overnight
Reliable updating and matching of relevant reference databases, such as Refinitiv World-Check and Dow Jones Factiva and connection to an official, state reference databases.
KYC & AML Partner Screening – daily, automatically, according to defined rules and under absolute data security behind your firewall. Ensures automatic verification & monitoring of business relationships
Automatic, complete documentation of compliance processes in the workflow
Fulfils worldwide requirements of the regulators and the legal compliance obligations
Granular User-Management
- Compliance allocation of roles
- 2-/4-eye principle
- Changes in the system are traceable and documented
- “Read only access” / file / data history/ reports
- Secure management of sensitive client data in one place
- Alert & Hit – traceable documentation through unchangeable history of client data and alert processing.
Analysis of the plausibility of the customer’s financial transactions
SOAP interface for Pythagoras integration into your own applications.
Audit reports prove your compliance with the rules. You can create them with just a few clicks.