The Importance of Community Building Amongst AML and KYC Compliance Professionals

Compliance is not an easy job. Professionals in this space often struggle alone with daunting tasks such as keeping up with new regulations, educating themselves on tools in the market, monitoring criminal patterns, and more. A key method to help compliance professionals work more effectively on these tasks lies in knowledge sharing. Yet, in order to promote and enhance knowledge sharing, it is necessary to create a safe space for compliance professionals to share information.

There is power in the idea of building a community where compliance officers as a whole are represented equally with no differentiation between the size or type of institutions and companies they come from. At Know Your Customer, we believe and see great value in the concept of such a community and it is our ambition to build one.

To get started on this journey, we have been asking ourselves some key questions: exactly what elements constitute good reasons for community building and knowledge sharing between compliance professionals? What hurdles stand in the way of creating such a community? How are existing groups already approaching this idea?

1. Strengthen anti-crime efforts

Given the risks involved, criminals are surprisingly proficient at knowledge sharing, so compliance professionals need to do the same if they don’t want to be left behind. Criminals share information amongst themselves on how to launder money or get around new regulations as fast as regulators can formulate and implement them. Some criminals work together to come up with new ideas or patterns, which they then execute across different banks, financial institutions, and digital banks. For this reason, cooperation between compliance professionals is important and necessary. By sharing information about dynamic criminal patterns or new typologies, the compliance community can strengthen the overall system and anti-crime efforts.

2. Provide psychological support

As previously mentioned, compliance can be a very lonely and difficult function. By building a community for knowledge sharing, there is no longer any reason for compliance professionals to struggle alone with daunting tasks. The presence of a supportive community that compliance professionals can turn to for help and self-development is an incredible psychological boost.

3. Keep up with new regulations

For the past few years, anti-money laundering regulations have undergone systemic and continuous changes. For example, the quick succession of the AML Directives across the European Union has kept many compliance teams on their toes, and changes to regulatory requirements – especially around virtual assets and remote onboarding requirements – are similarly occurring in the US and Asia. Keeping up with all of these developments and what they mean for your own field as a compliance officer is a difficult task, made doubly so if professionals in the field work alone. By creating a communal understanding of regulations, especially new regulations, this burden is lightened.

4. Share RegTech insights

To strengthen and improve the system, a better way of sharing technical expertise amongst different players needs to be in place. Beyond educating themselves about innovative tools, it’s important for professionals in the field to discover the diverse ways that compliance officers are using RegTech tools to address their most pressing pain points. This diversity needs to be exchanged and talked about with each other so professionals can learn different ways of using the same tools and understand a greater depth of possibilities, inciting education on a larger scale.

5. Gain a global outlook

More and more emerging FinTechs and financial institutions are currently striving to extend their reach around the world. Expansion into new areas can be a daunting task for compliance officers that are unfamiliar with local regulations. Having connections in the jurisdictions they are targeting or being able to turn towards an existing community for help can be a strategic way to avoid common mistakes when setting up operations and compliance processes in a new market. Furthermore, criminals exist globally and financial fraud is occurring in institutions in every corner of the world. Why shouldn’t an anti-financial crime or anti-money laundering community strive to be just as global and cross-border?

Whilst community building and knowledge sharing sounds ideal in theory, there are some challenges to making it a reality. Are there ways to overcome these issues?

The first hurdle that comes to mind is that some professionals may be less willing to share information due to concerns around confidentiality. To overcome this, it’s important to explicitly clarify that confidential information and sensitive client data should never be shared among the community members. Highly beneficial discussions around technologies or patterns of criminal behaviour can still be held without breaching confidentiality simply by generalising examples or bringing anonymised data to the table.

Similarly, providing clear guidance on how to share experiences and insights in the community would remove potential elements of liability around sharing failures. Another method is to task an experienced professional who is no longer in the field with chairing the knowledge sharing sessions and steering the conversation in the right direction.

Conflict of interest is another point of consideration, especially if the community is built by an organisation that has commercial relationships with a set number of providers. To avoid any difficult situations, rather than advising each other on which technology vendors to use, members could instead focus on sharing information about workflows, experiences, how they approach compliance challenges, and more.

Finally, building an international community requires the creation of a space that is easily accessible and inviting to people from all over the world. Since hybrid methods of communication are normalised today in the aftermath of the global COVID-19 pandemic, both online and in-person platforms can be used in complement to achieve an international reach. But how do you ensure that a global community is not infiltrated by criminals? The answer lies in strong KYC procedures. A vetting process can be put in place to ensure that only real compliance officers working for reputable (and real) companies join the community.

While it might seem counterintuitive, RegTech providers are in fact perfectly positioned to play an active role in compliance community building. This is because these companies – and Know Your Customer is no exception – tend to work with a variety of clients, ranging from Tier 1 banks to smaller FinTech institutions and other regulated companies across sectors (e.g. payments, virtual banks, banks, corporate services, etc.). Over time, RegTech vendors gain a deep understanding of compliance procedures and the priorities of various clients. As such, it is possible to condense this knowledge into actionable insights to help others that are just embarking on their RegTech journey.

At Know Your Customer, our own efforts and small steps towards building a community so far have included:

• Organising in-person events in Hong Kong and Singapore to gather compliance professionals in a specific vertical.
• Announcing new clients and sharing detailed case studies to provide tangible examples of how a RegTech solution like ours is being implemented in the industry and what results it is able to generate.
• Releasing our monthly RegTalks podcasts where we interview industry experts on the latest trends in RegTech, FinTech and financial regulations to help compliance officers stay up to date.
• Writing articles and sharing insights on social media about newly introduced regulations or specific KYC and KYB requirements in specific jurisdictions.

On a personal level, my small contributions to the cause range from continuously sharing industry information on social media platforms and participating in various podcasts, to lecturing for a dedicated RegTech course by the Centre for Finance, Technology and Entrepreneurship (CFTE). All of these efforts are little pieces of a bigger puzzle that we want to continuously add to in the future.

If you are interested in joining Know Your Customer’s community, then please get in touch with us via email at info@knowyourcustomer.com. To facilitate a safe environment, only real compliance professionals will be admitted to the community.