7 Reasons Why Effective Compliance Management Is Only Possible with a Graph-Based Solution Part212/20/2018 We're a pretty young company, 10 months old. We are a compliance company with a strong focus on anti-money laundering. So far within the first 10 months we are representing 500 shops mainly in continental Europe. We're targeting further 250 by the end of the year and for Q1 next year we're looking at 1000 point of sales we try to represent. What are we doing? We're a one stop shop for everything compliance related https://www.casinoslots.co.nz/jackpotcity-casino-review.
We do the risk analysis for the company. We establish an entire compliance organization into the company so we outsource and re-implement. We put standards and policies out. We provide AML officer so it's pretty legal work as well. The problem is with the volume we are working in. And with the regulations our customers are facing is no way we can do this without technology. So we have some tiny technology solutions we are providing such as a whistle-blowing system. An e-learning platform. But as well we're working with graph technology. One of the key challenges here is besides the transaction monitoring if you look at the gambling industry even in our country on a game day we have hundreds of thousands on transactions every day. Then you need to have a proper case management. Something that Structr Neo4j is building up for us as well. And finally you have the so-called know your customer process. Most of you might know about it. Who's the business partner I'm working with actually? What do I know about him? Who's the ultimate beneficial owner behind it. We take this one out now for a second and my colleague Julian will be talking about this. How we are approaching this with graph technology. - Hi. My names Christian. Well let's imagine you're the regional manager of Los Pollos Hermanos and the nice gentleman Mr. Walter White comes to you and says hey I wanna be part of your franchise. What do you do? You haven't watched Breaking Bad. You only receive an application a couple documents and you have publicly available information. Now for those of you who listened to the keynote this morning I think Emil quoted the professor Farlow said if I wanna tell you who's a smoker, I don't want the information about this person I want the information about his friends. And that's what we also do at KERBOEROS. And we call it our Know-Your-Customer-Graph. Or know your franchisee graph. And if you look at, okay laser pointer. Oh yes it works. Look at the graph of Walter White we can see a couple of things. He used to be a teacher. He used to be a shareholder, Gray Matter Technologies. High-tech business I think was stem cell research. But nowadays he's mostly involved with two businesses. A car wash and also a fumigation service Vamonos Pest. Now the car was he runs jointly with is wife. That looks normal. But if you look at the fumigation service you see well there are two of his business associates they're a little bit shady. You have Mr. Pinkman who has a known criminal record. Drug dealing and you have Mr. Ehrmantraut, who was a former police officer who left the force on allegations of corruption. So there's media reports. So just by looking at this and no further information you can tell, well maybe I don't wanna, not go into business with Walter White immediately. Well we know that we don't. But a potential regional sales manager would not but we would know how to trigger an enhanced diligence for sure. Now let's take a look how this works in a more real life example. What do we do is usually we, we build a graph. We take information that we receive as part of the due diligence process. We also use publicly available information. So we got ID's, we got registry records. Contracts like rental contracts. We take all this data. We analyze it, you know we look at who are the actors, the companies, the people, locations. And then we kinda collect that data and enrich it with media reports. Some open source intelligence. And we build a graph. This hypothetical example you have at the top here our franchisee that will be our client and you have here the alpha LLC as a potential franchise partner. Now in a traditional know your customer process what do you need to look at? You need to identify and verify your partner. You need to identify the ultimate beneficial owner, the so-called UBO. And you need to identify the sources of wealth. Where is the money coming from? And do some background checks like PEP checks and sanction checks and everything. Now in our example, what we could do is you know get a business record for the LLC it would see it has two shareholders. Some majority shareholder. A minority shareholder. The minority shareholder has below 25% so that's the limit under which I do not have to identify the person necessarily. Or not fully and I have majority shareholder Mr. John Doe up here who is also CEO. So I check them I verify I get his ID. And we can assume he has some legitimate sources of wealth and we're fine we're done. That's more or less the traditional process. Now why do we build the graph? Because of the interesting part right here. Let's say this is a restaurant chain. Here are three locations. And we look at the locations, look at the contracts and we see oh well. All locations lead to the same landlord. Down here which is not unusual. That's a common occurrence. What is not so common that's what you only see in the graph is that actually this landlord shares the company's seat with the minority shareholder and if we look further we also see that the landlord's owned by a company who in turns owned by the owner of the minority shareholder. So what we kind of see here is a very traditional way of doing some layering of the money. So you have your restaurants there the money comes in. The illegal proceeds are getting mixed up. And instead of having high revenues for the restaurants, for the company what he do is you kind of siphon all the profits, or at least part of it it must still seem legitimate through overpriced rents out of the companies. Now overpriced rents we are in New York I come from Berlin and either city I think overpriced rents are the norm. So that really isn't that suspicious. And then you transfer the money via those companies to the ultimate actual beneficial owner who is not John Doe. But actually Jane Doe. So first this process just gives us a fuller picture. Because when we analyze it right we just don't look at the potential partner itself. What we also look at is a graph. We see are there any interesting personnel in the second or third row. Or are there businesses that are unrelated. But also are very cash intensive. So by that we can say okay the risk for this potential partner is higher, lower, and we have a fuller picture. A fuller picture is not necessarily only important for the Know-Your-Customer process but also for the risk management itself. Because we wanna have that network. We wanna see that network because the risks that are within that network they don't necessarily stay with one node. Like, oh. Uh. Yup. So if Mrs. Jane Doe is for instance a known drug dealer we wanna know that. Because that risk can spread easily to actually the person that we are in direct contact with as a franchise organization. And we want to prevent that we are being named in the same breath as that person. Especially Christian talked a little bit about reputational risks, reputational risks they don't adhere to the same standards as legal proceedings. As prosecutions. Well because they are a reputational and we all know media tickets get out quickly and the headline is a lot juicier when I write let's say it's a restaurant chain that like Burger King helps the money laundering then I wanna say well Jane Doe was convicted of money laundering. So what you wanna do is with especially with AML you wanna look at the network. You wanna see where are my risks and how can I manage them risks in themselves are not bad, but you have to deal with them. Another thing we do a little bit differently is we don't draw only pretty lines but for us it's very important that we document those lines. So most of our relationships our edges between our nodes they are actually hyper-relationships where there is some kind of proof in the middle. Usually it's a document where I say okay I have contract, or I have an ID, or I have a record. That actually verifies this edge, this relationship. Because for us it's important if law enforcement comes or if an audit comes. We need to prove that the graph we built and the risks we found or did not find was all that we could do at that particular moment. Especially since most investigations or even audits they come years after the fact. So whenever something today happens I need to document today how a network looked. How a shareholder structure looked because it will be investigated a year or two or five years from now. And at that time I need to show okay at this point in time I knew what we were actually dealing with. Or did not. So what were our challenges? I think some of them are pretty universal.
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7 Reasons Why Effective Compliance Management Is Only Possible with a Graph-Based Solution Part112/20/2018 I think we start. Welcome everyone. Good afternoon to our talk about seven reasons why effective compliance management is only possible with a graph-based solutions. My name is Axel Morgner. I am the founder and CEO of Structr.
The application platform on top of Neo4j. And with me on stage are Christian Tsambikakis from KERBEROS Compliance Management. And Julian Schibberges from Bernstein Group. And together we'd like to show you what we did in the past few months and explain why it is a good idea to use graph technology if you want to build an effective solution for compliance and risk management. So I give the word to Christian. - Hello everybody let me start with a simple pretty private question. Did any one of you do some money laundering in the last weeks privately and can explain to the group how it works? (quiet laughing) And drug cartel members in the room? Nobody. Alternative question. Does any body know this guy Walter White? What did he do with the crystal meth money? Where did he spend it does anybody know? What did he do with all the cash he earned from his crystal meth business? (audience member mumbles) Pardon? - [Audience Member] Businesses. - Yeah but what business exactly? - [Audience Member] Car wash. - Car wash exactly, perfect. Thank you so much. So he really did a money laundering by the books so if we look at how money laundering works we all normally talk about the three stages. The first one is the placement of illegal or dirty cash into the legal financial system. Second stage so called layering is where you disconnect the illegal source from the money so you get a receipt, a contract, some profits from a business and then you re-invest it into the business cycle. So in Walter's example so for those who don't know him he's the main actor of Breaking Bad. So a chemistry teacher, brilliant meth cook. So he takes the meth, all the cash from the meth, puts it into his own car wash through the books, pulls out the money from the profits and invests and buys himself a nice Ford mustang. If we're looking at the scale of money laundering globally it's massive we're talking about 2000 billion US dollars annually across the globe or 2 trillion US dollars. In the US alone, these are obviously estimates, we have 300 and million, a billion, sorry, US dollars in the US alone. In Germany it's 100 billion. In the UK it's 350 billion pounds. It's a global phenomenon. There's no country, no serious democracy in the world which is not trying to tightening their regulations around AML. It's not only an economical problem. If you look at terrorism financing as part of money laundering you know that's a society problem, a political problem, a security issue and a reputational problem. The impact on the business financially is quite heavy so globally two billion in fines were related to organizational AML failures last year. This is the company side of things but it's always a management liability as well. So chief executives and C-level decision makers a personally liable if they do failures or have failures in their own company. The integrity of the company is damaged. The entire business may be disrupted. I brought three examples, one from the US, ING. One from Australia and one from the UK. And you see the size of the financial fines are massive. So who's affected? Historically the finance sector, the banking sector, they know the problem. They have a lot of compliance departments working on this, but as well as, and this is what we're focusing is the non-financial sector. So as well companies with the multilayered decentralized structure, those that have a huge customer base, those working in a franchise system. Those working across borders. We have a special focus in a gambling industry. So those that are operating these so-called higher risk industries. This could be gambling, could be as well real estate, or those who trade with valuable goods. Car dealers, jewelries or arts. In a nutshell money laundering is a hot topic because we are talking about personal liabilities on the management levels. We're talking about financial damages you've heard millions and billions in fines for the companies. It's a massive reputational damage for a company so-called naming and shaming. You don't want to be the company where the drug cartel, or the terrorists were financing their next attack. It's a massive problem. As well for the politics. So authorities and governments have to explain themselves why so much money is floating around in shadow industries. We have a focus of the authorities. There's a massive pressure for success here. And in the end the increasing regulations. Just an example from the EU every year there's a new regulation where all the EU countries have to comply with it's quite heavy and goes more into transparency. So who is KERBOEROS to finalize this one quickly. Oh, oh my gosh. - Wait, did you just get one? - I got one more, guys.
I literally just got one. - We're tied. - We're tied. I'm gonna win, that's just the strength. And I'm stronger. - But I'm smaller and faster. - Comment down below, does fast beat strength? Or does strength beat fast? Also, comment down below #Kyle or #Luke on who you think's gonna break the pinata. Now, let's go to breaking this thing. Okay, I have to go first. - [Luke] Tell the audience how this works. - Okay, what we are doing is we are blindfolding each other, We only get one swing each. So you get one swing, then I get one swing, then you get one swing. - Hold on, why don't we do it like this? So, it's just swings, so if I miss it once, then that's one swing. So, right now I have 14, I think 14, I don't know. - Yeah 14, 14. - Okay, so I have 14 swings, and then if I break it, then that's unlucky for you. - You kinda look like a bird. - If I don't, then you get to swing. - Alright, it's really disorienting. - Okay, I'll point you over to the pinata. - Then you gotta spin me around. (both) One, two, three, - [Kyle] Four. - Do 14 'cause that's how many candies I have. - Five, six, seven, eight, nine, 10. No, wait one more. You wanna do 11, you wanna do 11? - Sure. - Okay, 11, now face towards the llama. There you go. You kinda hit it. - Hold on, let me (Mumbles) Okay. - Six. - Oh six. - Seven. - It's so hard, okay, oh my gosh you guys. Smash that like button. - Eight. Oh no, we gotta hang it back up, but it didn't break. 10, 11. - Is it down, I can't tell. - 11. 12. - [Luke] Hold up. - It fell off. 13, 14. I didn't break it, - My turn. - I swear, my pickax is doing nine damage. (Kyle Laughing) They need to buff me, I'm so bad. Okay Kyle, spin. One. - One. - Two. - Three, - Two. - four, five, six, seven, eight, nine. This way, this way, come this way, ready? 10, 11, 12, 13. - No! - Okay, that's good I guess. Ready, go ahead Kyle. Oh! - Did it break, oh man, it didn't break. - Are you hitting it? (both laughing) Okay, just take it off. Kyle, this is not working. There's only one. - Oh come on! (record scratch) (dramatic music) - I know you need materials Kyle, but the llama's just too strong. Kyle, I think you need one thing to give you the power to get this llama open, okay? - What? - I'll be right back. - Um, I wonder what it is. - I mean, I think this will work. - What is this? - It's the panda! - Okay. - Let's see if this will him the mighty power to destroy this llama. (beep) You're not doing nothing, dude. Let me see this, let me see this. I'm the best, okay. - Okay, we'll see. - [Luke] Three, two, one. - Oh come on, give me this. Hey, no, I won, I won! Hey, I'm supposed to win. - This llama's too strong. - I broke it open. - Whoa, dude, there's glow sticks. - What? - There's glow sticks, and look, this awesome (both) Party, party. - And look, there's also awesome Hotwheels cars. - [Kyle] And little Minecraft action figures. - That's awesome, and there's also some Nerf darts that we can use. High five Kyle. - Whoo hoo! - Kyle, who do you think won? I mean, I kinda cheated. I don't know, you guys will have to vote in the comments, who do you think won. - Yeah, that's it for this video guys. If you like this one, I picked these other ones just for you. So if you like this video, you're definitely gonna like these other ones. I'll see you guys next time. (Both) Bye! - Lets get that llama outta here and lets pick up all these glow sticks and clean up. - Awesome, and we have awesome toys. Bye. (uptempo music) Best thing about Pawleys Island? It’s a tough, yet common question. It usually comes right after “Where?”
Once I explain exactly where Pawleys Island is (roughly 10 miles south of Myrtle Beach, SC) people always want to know why I love it so much. The obvious reason to love this area is the miles of scenic white sand beaches. But, of course, there are many more reasons to travel the extra ten miles beyond Myrtle Beach. In Pawleys Island you can: Try out many of the best restaurants in South Carolina. Stay in some of the best hotels on the Grand Strand, or enjoy one of the hundreds of fantastic beach houses available for rent. Play one of the many top rated golf courses in an area commonly referred to as the golf capitol of the world. Spend all your money at one of the many exquisite shops in town, especially the famous Hammock Shops. Enjoy the town’s state park or take a stroll through the beautiful gardens. Absorb all the beautiful scenery and wildlife that you typically won’t find in the larger, surrounding cities. Head north just ten minutes to Myrtle Beach and enjoy all the “big” city has to offer. Why I Love Pawleys Island As I mentioned above, there is a whole list of reasons why anybody would enjoy Pawleys Island. And trust me, I’ve enjoyed everything on the list many times. But the reason I love the area is much simpler – it is so laid back. The locals sum their town up best in two words – “Arrogantly Shabby”. There are no crowds in Pawleys Island and everything is much slower and quieter than the surrounding cities. The reason Pawleys Island is so great is very simple – it is a mini Myrtle Beach minus all the people. The beaches and scenery are incredible, and you get to enjoy them in the peace and quiet. All you need to enjoy your vacation here is the right information and little common sense. Hopefully you will have a head start. I know Pawleys Island will not only provide you and your family with an amazing vacation, it will also provide memories that will have you returning for years to come. *When referring to Pawleys Island, I generally mean the area that is made up of the city of Pawleys Island, Litchfield Beach (technically part of Pawleys Island), and Murrells Inlet (adjoining town). Most things I refer to will all be within this five mile stretch. If it doesn’t really matter where you go, you can look for vacation deals on websites such as Craigslist and Ebay. It happens quite often - a family reserves and pays for a vacation deal and then something happens to prevent them from being able to take the trip at that time. When that happens, there is usually a sizable fee if the reservations are canceled. Some people decide to try to sell the vacation deals at a smaller loss and are willing to offer a great price on their vacation deals. There are also auction websites where you can bid on packages and other listing websites where you can contact the people and buy the vacation deals outright.
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