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A Way Forward

GMs, Managing Directors, Board of Directors:

Financial Dichotomy

The world of banking has been changing because the world is changing. There are perils in this world, not imagined before 2001. Introducing new regulations:

  • Anti-Money Laundering AML,
  • Combating the Financing of Terrorism CFT,
  • Office of Foreign Assets Control OFAC,
  • Foreign Account Tax Compliance Act FATCA,
  • Know Your Customer KYC, etc.

We also have a number of issues that have been with us forever: good customer service, under serviced segments of our population, new financial requirements, non-bank banks, etc. These are the times when we most likely respond by being hesitant, uncertain what the world of compliance, competition and corruption, will bestow on us. The uncertainty seems to cloud any vision for the future and yet the demand for action is great. The digital footprint for financial institutions needs to expand, new products, servicing the next generations are expected but regulatory compliance is suffocating.

Your new customers will most likely live online and in a physical sense, be invisible to you. They seem to be in conflict with all the AML/CFT, OFAC, FATCA, KYC, etc. policy requirements. The Caribbean is under automated, as described by the Caribbean Association of Bankers (CAB) and having to compete with the non-indigenous banks, your position seems untenable.

Financial Concerns

  • How are we going to open accounts online, both deposit and loans, following all the AML/CFT, OFAC, FATCA, KYC, etc., regulations and determine probability of default and service the invisible customer, in a timely fashion?
  • How will we document and verify processes and policies were followed?
  • How will we know where we are with our capital requirements without knowing where we are with our provisioning, at any point in time?
  • How will we comply with FATCA information or EU tax information requests, without automation?
  • How will we document our execution of AML/CFT policies and avoid massive fines?
  • How are we going to increase our business, organically and by expanding without brick and mortar?
  • Can we use the internet with all the de-risking correspondents and regulatory requirements mandated and forward-looking impairment requirements?
  • A stand-alone forward-looking risk model doesn’t help, it’s not dynamic and is too cumbersome for today’s requirements. Forward-looking won’t exist with a stand-alone or spreadsheet model.

Handling policies and processes for AML/CFT, OFAC, FATCA, KYC, etc. regulations, manually and documenting such, manually, will and should make you nervous, especially with massive fines looming.

Systemic Solution

There is an answer! RiskCALM4 a systemic solution, a financial institution’s panacea:

  • It calculates PD, LGD, EAD, ECL automatically during all loan account openings, via the internet or in the branch.
  • Provisioning requirements known with every loan.
  • Capital requirements, will not be a surprise to your Board.
  • Automates all data collection for all accounts, whether deposits or loans, in compliance with AML/CFT, OFAC, FATCA, KYC, etc. requirements, online or in the branch.
  • Automatically audits any changes or overrides of policies.
  • Sends alerts to key stakeholders.
  • Expands your digital online network with a completely integrated solution.
  • Can respond to verification of processes and policies to any request from correspondents or jurisdictions and other financial organizations based on AML/CFT, OFAC, FATCA, KYC, etc. regulations.
  • Will help you grow organically with tools to create and monetize networks.
  • Will improve customer service.
  • Will make your services more available.
  • Affords you the ability to identify customer’s profitability.
  • And more…it’s a panacea!

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