In my previous post on this topic, we looked at the continuing urgency around fraud and financial crime, and explored some core elements firms can establish to be more effective in meeting new sanctions requirements.

That leaves us with a question:

What still needs to be done?

Whilst most firms have coped well with the additional pressures from the Ukrainian and Russian situation1, the fallout has challenged resources and systems; providers that were already struggling will definitely be working at their limits.

Firms should consider the following:

  • Systems and automation: Firms should automate and systemise wherever possible. Just as sanctions regulations have gotten smarter, systems should evolve to keep up with regulatory requirements. Firms should evaluate whether they have the correct technology in place, and if not, which vendor they should be using to increase efficiency. This is especially important when considering the constant pressure providers face around cutting costs, particularly when resourcing may not be as large in the future.
  • Training and knowledge: Key to implementing effective controls is both strong financial crime knowledge and strong product knowledge. Embedding learnings from the Russian and Ukrainian crisis is essential in my view for dealing efficiently with any future follow up rounds or other regions targeted.

The regulatory focus on sanctions is not expected fade, and neither will the cost pressures that all firms face to deliver a good return. By learning from past challenges and implementing changes, financial providers will be in a better position to manage this complex area.

References:

[1] “How far do EU-US sanctions on Russia go?”, BBC, September 15, 2014. Access at: http://www.bbc.com/news/world-europe-28400218

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