Compliance Audit in sight? Picture generating compliance audit reports instantly. The outcome is flawless audit reports that adhere to stringent compliance and risk management standards. 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 is crucial, 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.
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 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 |
…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.
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?
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.
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.
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:
Get to know the advantages of Pythagoras Solutions for modular, effective compliance and risk management.
Arrange an appointment for a free product presentation with the following button, just now!
We look forward to hearing from you!
Your Pythagoras Team