Compliance Clarified – a podcast by Thomson Reuters Regulatory Intelligence

In episode 10 of season 8 of Compliance Clarified, Helen Chan, Regulatory Intelligence's Hong Kong-based expert and Rachel Wolcott, senior editor in London discuss artificial intelligence in compliance. To say there has been a lot of hype around AI and generative AI is an understatement. ChatGPT, in particular, has captured the public's imagination. It is simultaneously hailed as transformational technology and a weapon of mass destruction. So what's in it for compliance officers? Helen and Rachel take listeners through some of the trends and use cases they are seeing in financial services and compliance for both deterministic and generative AI. They sketch out how regulators globally have responded to AI. Finally, they set ChatGPT for some simple compliance tasks to see how it performs. Spoiler: Chatbots are not going to take over compliance departments anytime soon. This is the last episode of season 8. We'll be back in September! Links: Impact Analysis: Regulators in Asia lay down the foundation for regulation of AI ethics:  http://go-ri.tr.com/aWnKkV Insight: China, EU and U.S. regulators ponder generative AI regulations, offer compliance considerations for businesses: http://go-ri.tr.com/JDlPO1 Generative AI: Five use cases for compliance: http://go-ri.tr.com/aeOBkB Expert AI is needed to deliver the accuracy required to automate compliance tasks; ChatGPT applications are limited Outside paywall: https://regintel-content.thomsonreuters.com/document/I563E94301B4111EEBE2AEF7C693C2154 Ten things new AI apps such as ChatGPT can do to 'augment' compliance -FINRA conferencehttp://go-ri.tr.com/Z0fFDU Contact us: Helen Chan (HK):helen.chan@thomsonreuters.com Rachel Wolcott (UK):rachel.wolcott@thomsonreuters.com For more information about Regulatory Intelligencehttps://legal.thomsonreuters.com/en/products/regulatory-intelligence   Compliance Clarified is a podcast from Thomson Reuters Regulatory Intelligence.Listen to wide-ranging, insightful discussions on all things compliance for financial services firms. We delve into the hot topics of the day, the challenges faced and offer up practical ideas for emerging good practice. We de-mystify regulation and explore the art, as well as the science, of the ever-expanding role of the compliance officer.  Enforcements, digital transformation, regulatory change, governance, culture, conduct risk – anything and everything impacting the compliance function is up for discussion.

The Financial Conduct Authority's much-trumpeted Consumer Duty comes into effect on July 31. An amendment to the Financial Services Act in 2021 in the House of Lords gave the regulator a year to bring in rules concerning the level of care firms provide to consumers. This turned into the Consumer Duty and last July the FCA set out its rules. The FCA has issued an unprecedented set of guidance on the duty.In this episode of Compliance Clarified, managing editor Alex Robson talks to senior editor Lindsey Rogerson and Mike Cowan, senior regulatory intelligence expert, about what the duty is, what it means for firms and whether the industry is ready and what is next. The critical question is whether the lives of consumers will be improved and how quickly will the regulator move to enforcement where it finds failings.The Compliance Clarified podcast series covers a wide range of topics which affect compliance officers at financial institutions and aims to help them navigate the often-challenging regulatory environment. It considers the big challenges of the day and offers practical ideas for emerging best practices.Programme notesFrom behind Regulatory Intelligence paywall: Open banking tech helping financial firms with Consumer Duty compliance -vendors: http://go-ri.tr.com/g6jPrPDecades' high interest rates, Consumer Duty put focus on vulnerability assessments: http://go-ri.tr.com/g1vU0DFCA publishes 10 key questions for firms to test Consumer Duty readiness: http://go-ri.tr.com/k3RqIiNo paywallOne month to go for the Consumer Duty: https://www.fca.org.uk/news/news-stories/one-month-go-consumer-duty Compliance Clarified is a podcast from Thomson Reuters Regulatory Intelligence.Listen to wide-ranging, insightful discussions on all things compliance for financial services firms. We delve into the hot topics of the day, the challenges faced and offer up practical ideas for emerging good practice. We de-mystify regulation and explore the art, as well as the science, of the ever-expanding role of the compliance officer.  Enforcements, digital transformation, regulatory change, governance, culture, conduct risk – anything and everything impacting the compliance function is up for discussion.

The Australian arm of consulting firm PwC is embroiled in an unprecedented political scandal following revelations that senior staff sold confidential information on government tax reforms to its multinational clients. PwC is defending allegations that it engaged in a deliberate multi-year strategy to cover up a breach of confidentiality in the tax leak scandal. The form stands accused of "monetising" confidential information that it obtained as a consultant to the government on laws to target multinational tax avoidance. The scandal has led to investigations from the Australian Federal Police (AFP) and the prospect of a referral to the new National Anti-Corruption Commission (NACC). PwC is also navigating a probe from the national accounting body, numerous Senate inquiries, and three internal reviews within PwC, including one led by its global leadership.The case has also cast a cloud over the firm's 900 partners in Australia and 10,000 staff, leaving the organisation in damage control mode. Peter Collins, PwC Australia's head of international tax, has been banned by the Tax Practitioners' Board (TPB) for his involvement in the scheme.In a bid to stem the losses, PwC now plans to sell off its government consulting business, which generates A$600 million in annual revenue, for A$1 to private equity group Allegro. It is estimated that 130 partners and 2,000 staff will leave to join the new entity.In this episode of Compliance Clarified, Nathan Lynch discusses this unfolding corporate disaster with Niall Coburn, a lawyer and regulatory risk expert with Thomson Reuters Regulatory Intelligence in Australia.IMPACT ANALYSIS: Consulting firms warn staff about ethics as PwC misconduct is referred to police: http://go-ri.tr.com/WAlKdrCOLUMN: Australian Senate hands down PwC report, as firm sells government consulting arm for A$1: http://go-ri.tr.com/UKcnL3OPINION: Culture crisis at PwC Australia offers uncomfortable reminders of past accounting scandals: http://go-ri.tr.com/jUlpM6COLUMN: Australian regulatory body investigates PwC over unethical conduct involving U.S. tech giants: http://go-ri.tr.com/7a6KopCOLUMN: Evidence reveals PwC's Australian partners and staff profited from unscrupulous tax leak: http://go-ri.tr.com/27gXDz Compliance Clarified is a podcast from Thomson Reuters Regulatory Intelligence.Listen to wide-ranging, insightful discussions on all things compliance for financial services firms. We delve into the hot topics of the day, the challenges faced and offer up practical ideas for emerging good practice. We de-mystify regulation and explore the art, as well as the science, of the ever-expanding role of the compliance officer.  Enforcements, digital transformation, regulatory change, governance, culture, conduct risk – anything and everything impacting the compliance function is up for discussion.

U.S. banking regulators are homing in on more effective stress testing after admitting they were behind the curve in their supervision of Silicon Valley Bank.The bank collapsed in March, alongside Signature Bank, and was later joined by First Republic. Further problems are expected for smaller, regional banks, but regulators have to date seen off fears about a 2008-style financial crisis.In this episode of Compliance Clarified, Alex Robson, managing editor in London, is joined by Henry Engler, senior editor in New York. They discuss recent comments by Michael Barr, vice chair of supervision at the Federal Reserve, about the steps that regulators are taking. The U.S. central bank is at the beginning of exploring how it can move more swiftly when its supervisors spot problems at banks outside crisis periods, he said."We're not an institution that moves quickly on supervisory issues," Barr told a recent panel in New York.The Compliance Clarified podcast series covers a wide range of topics which affect compliance officers at financial institutions and aims to help them navigate the often challenging regulatory environment. It considers the big challenges of the day and offers practical ideas for emerging best practices.NY Fed official argues for tougher supervision after SVB collapse; bank executives need 'devil advocates' to challenge decisions (behind a paywall):http://go-ri.tr.com/D1HKvqhttps://www.newyorkfed.org/newsevents/speeches/2023/ost230617Federal Reserve’s review of Silicon Valley Bank failure (free to access): https://www.federalreserve.gov/newsevents/pressreleases/bcreg20230428a.htmhttps://www.federalreserve.gov/publications/files/svb-review-20230428.pdfFed’s Jerome Powell on higher capital costs (free to access): https://www.reuters.com/business/finance/powell-strong-capital-is-central-importance-banks-2023-06-21/ Compliance Clarified is a podcast from Thomson Reuters Regulatory Intelligence.Listen to wide-ranging, insightful discussions on all things compliance for financial services firms. We delve into the hot topics of the day, the challenges faced and offer up practical ideas for emerging good practice. We de-mystify regulation and explore the art, as well as the science, of the ever-expanding role of the compliance officer.  Enforcements, digital transformation, regulatory change, governance, culture, conduct risk – anything and everything impacting the compliance function is up for discussion.

Financial institutions in the US are filing a record number of suspicious activity reports (SARs), with spikes in check fraud, elder abuse, human exploitation, and benefit scams. The podcast discusses a Thomson Reuters special report on financial crime and fraud, highlighting the impact of the Anti-Money Laundering Act of 2020. It also addresses the challenges in detecting terror finance and the surge in SAR filings during the pandemic.

The podcast discusses the UK FCA's track record on whistleblowing, including instances of failure to protect whistleblowers and low assessment rates of reports. It also explores the FCA's changes in approach to Principle 11 disclosures and mistreatment of whistleblowers at employment tribunals. The impact of evidence and concerns about FCA's handling of whistleblower detriment are debated, along with the lack of enforcement action and feedback given to whistleblowers by firms.

Firms need to re-engineer their anti-money laundering (AML) systems and controls to refocus on know-your-customer (KYC) processes to prevent the inevitable pile-up of transaction monitoring alerts. Firms' pivot to digital onboarding has prioritised speed over collecting enough information to determine whether transactions are suspicious. It has created an inefficient, expensive process where AML analysts are sifting through thousands of alerts looking for the proverbial needle in a haystack. The problems raise important questions about the ways that banks conduct AML controls today.Some banks, in an aim to onboard customers digitally in less than 24 hours, rely on tools that verify identity-based on existing information. These verification tools use customer addresses, credit bureau information, previous bank account details to risk score applicants. Some banks do not ask for photo identification, like a driver's licence or a passport, for customers deemed to be low risk.In this episode, Alex Robson, managing editor, Regulatory Intelligence, talks to Rachel Wolcott, senior editor in London, about KYC processes and how they should be done. Also under discussion is Russia, Iran, the UK Financial Conduct Authority's latest sanctions compliance work, together with that of the Association of Certified Anti-Money Laundering Specialists. The "Compliance Clarified" podcast series covers the wide range of topics which affect compliance at financial services firms, and aims to help compliance officers make sense of the often-challenging regulatory environment. It considers the big challenges of the day and offers practical ideas for emerging good practice.Programme notesOutside Regulatory Intelligence paywallFirms should invest in KYC, model "good" customer transactions to reduce transaction monitoring alerts pile-up: https://regintel-content.thomsonreuters.com/document/I42A1B9D0F8A911EDBEBCFA0963B51F96UK FCA finds gaps in firms' sanctions testing; ACAMS highlights complex evasion and Wagner Group risks: https://regintel-content.thomsonreuters.com/document/I26903170FB2111EDBEBCFA0963B51F96U.S. imposes counter-terrorism sanctions on Iranian operatives over alleged overseas assassination plots: https://regintel-content.thomsonreuters.com/document/IDFB1330000A511EE8F64E998879AFF30 Inside Regulatory Intelligence paywallU.S. imposes counter-terrorism sanctions on Iranian operatives over alleged overseas assassination plots: http://go-ri.tr.com/aR6rOIU.S. government issues broad new Russia sanctions, shares new export control evasion 'red flags': http://go-ri.tr.com/REz0nuUK FCA finds gaps in firms' sanctions testing; ACAMS highlights complex evasion and Wagner Group risks: http://go-ri.tr.com/8svY1kUK FCA using home-grown tool to check sanctions compliance: http://go-ri.tr.com/3khGhRGovernment intelligence sharing vital to help banks spot Russian sanctions evasion -U.S.,UK officials: http://go-ri.tr.com/Q9urHj Compliance Clarified is a podcast from Thomson Reuters Regulatory Intelligence.Listen to wide-ranging, insightful discussions on all things compliance for financial services firms. We delve into the hot topics of the day, the challenges faced and offer up practical ideas for emerging good practice. We de-mystify regulation and explore the art, as well as the science, of the ever-expanding role of the compliance officer.  Enforcements, digital transformation, regulatory change, governance, culture, conduct risk – anything and everything impacting the compliance function is up for discussion.

Financial services firms in the Asia-Pacific region have been shocked out of their complacency in the past year, with scams, frauds and other cyber-related crimes increasing exponentially. In Australia alone, consumers reported a record A$3 billion in losses last year — up from A$850m just two years earlier. The rapid pivot to digital financial services and non-face-to-face business during the pandemic has been cited as a major driver for this trend. The economic turmoil in developing economies has also played a role, with vulnerable people being more likely to be recruited into cybercrime or online fraud syndicates. In this episode of Compliance Clarified, we discuss this complex area with Helen Chan, a lawyer and regulatory risk expert with Thomson Reuters Regulatory Intelligence in Hong Kong. IMPACT ANALYSIS: Compliance response from banks needed as human trafficking fuels proliferation of online scam syndicates: http://go-ri.tr.com/bEUean COLUMN: SFC interest in market manipulation could cast scrutiny on influencer social media content: http://go-ri.tr.com/4YOqiq Compliance Clarified is a podcast from Thomson Reuters Regulatory Intelligence.Listen to wide-ranging, insightful discussions on all things compliance for financial services firms. We delve into the hot topics of the day, the challenges faced and offer up practical ideas for emerging good practice. We de-mystify regulation and explore the art, as well as the science, of the ever-expanding role of the compliance officer.  Enforcements, digital transformation, regulatory change, governance, culture, conduct risk – anything and everything impacting the compliance function is up for discussion.

Compliance officers are operating with limited sets of resources while simultaneously managing a diverse and expanding range of subject areas where the volume of regulatory change is expected to increase. The 14th annual Cost of Compliance, published by Thomson Reuters Regulatory Intelligence, found costs are expected to increase with difficulties recruiting appropriately skilled staff also reported.In this episode of Compliance Clarified, managing editor, Alex Robson, is joined by Mike Cowan, senior regulatory intelligence expert, on the findings of the report. The research was carried out before the latest developments in generative AI, which they also discuss.In 2022, the number of regulatory events monitored by TRRI was 61,228, the third-highest annual total since 2008. This figure covered 1,374 regulators in 190 countries, equivalent to an average 234 daily alerts. And in the coming year 73% of respondents said they expected an increase in regulatory activity.This increase in regulatory activity was also seen as a compliance challenge for both corporate boards and compliance officers were keeping up with the volume and implementation of regulatory change and managing growing regulatory expectations featured prominently in many respondents' responses.The "Compliance Clarified" podcast series covers the wide range of topics which affect compliance at financial services firms and aims to help compliance officers make sense of the often-challenging regulatory environment. It considers the big challenges of the day and offers practical ideas for emerging good practice.Programme notes:Visit the Thomson Reuters Institute to download a free copy of the report: www.thomsonreuters.com/en/institute.htmlSubscribers to Regulatory Intelligence can find a copy on the home page. Compliance Clarified is a podcast from Thomson Reuters Regulatory Intelligence.Listen to wide-ranging, insightful discussions on all things compliance for financial services firms. We delve into the hot topics of the day, the challenges faced and offer up practical ideas for emerging good practice. We de-mystify regulation and explore the art, as well as the science, of the ever-expanding role of the compliance officer.  Enforcements, digital transformation, regulatory change, governance, culture, conduct risk – anything and everything impacting the compliance function is up for discussion.

Anti-money laundering (AML) control failings at Santander Bank UK opened the door to a financial intermediary with links to Colombian drug cartels operating in Britain. Beltcastle, a payments service provider, is "Customer A" featured in the Financial Conduct Authority's (FCA) final notice in December 2022 to illustrate the failures behind Santander's £107 million fine.Beltcastle, which was authorised by the UK regulator for eight years, put about £1.3 billion in cash through the UK Post Office. The firm had accounts at Barclays, NatWest, and Ghana International Bank. The Post Office was used in the suspected laundering scheme, passing thousands of pounds regularly from Beltcastle through its cash collection and processing service.The case has raised serious issues about adverse media searches and information sharing, as Rachel Wolcott, senior editor in London, tells Alexander Robson, managing editor, in this episode to kick off the new series.The "Compliance Clarified" podcast series covers the wide range of topics which affect compliance at financial services firms, and aims to help compliance officers make sense of the often-challenging regulatory environment. It considers the big challenges of the day and offers practical ideas for emerging good practice.Programme notesSPECIAL REPORT: Santander AML failures opened door to intermediary linked to Colombian drug cartels; UK Post Office, banks used to move £1.3 billion: https://www.reuters.com/article/bc-finreg-santander-aml-failures-drug-ca/special-report-santander-aml-failures-opened-door-to-intermediary-linked-to-colombian-drug-cartels-uk-post-office-banks-used-to-move-1-3-billion-idUSKBN2WO1W8From behind Regulatory Intelligence paywallUK Companies House reports few operational incidents, employs no dedicated risk managers: https://regintel-content.thomsonreuters.com/document/I118F6F40EB2A11ED9DA6D001824C624BCompanies House's new identity verification measures fall short of minimum standards, MPs hear: http://go-ri.tr.com/I2JILVUK admits hundreds of millions laundered through Post Office annually, FCA sets out "current expectations" to address risk: http://go-ri.tr.com/RcNc1qFor further information, contact rachel.wolcott@thomsonreuters.com or alexander.robson@thomsonreuters.com Compliance Clarified is a podcast from Thomson Reuters Regulatory Intelligence.Listen to wide-ranging, insightful discussions on all things compliance for financial services firms. We delve into the hot topics of the day, the challenges faced and offer up practical ideas for emerging good practice. We de-mystify regulation and explore the art, as well as the science, of the ever-expanding role of the compliance officer.  Enforcements, digital transformation, regulatory change, governance, culture, conduct risk – anything and everything impacting the compliance function is up for discussion.