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.
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AuthorCharls Roberts is author of this blog, avid traveler and travel blogger. He writes articles for Eleventy traveler blog. He is also a Problem solver. Social media fanatic. Webaholic. Bacon specialist. Writer. Lifelong analyst. Incurable reader. ArchivesCategories |