5AMLD – Are you ready for the changes?

By Ben Lachenal
03-Oct-2019 10:31:50

5AMLD - Are you ready for the changes?

An eye-watering three trillion pounds is lost globally to fraud each year, accounting for 7% of organisations’ annual expenditure. It’s perhaps then no surprise to learn that Money Laundering techniques evolve at a worrying rate, and as such, regulations and directives designed to prevent them must follow suit.

As difficult as it is for regulators to keep ahead of underhand financial practices, it can be just as daunting for financial advice businesses to keep ahead of subsequent regulatory changes. Even the slightest change can impact working processes, increase workload and ultimately affect customer experiences.

In fact, the impact on customers is plain to see. In a recent survey, GBG identified that 86% of customers were willing to pay more for a better onboarding experience, highlighting manual processes as a particular bugbear, i.e. firms not using Electronic Identity Verification.

With all this in mind, the Fifth Anti-Money Laundering Directive (5AMLD) deadline is just a few short months away, so it’s a great opportunity for firms to revisit their current practices to ensure they’re both meeting regulatory changes and optimizing their current customer onboarding journeys.

With the fines for AML non-compliance now standing at a crippling £2.2bn, and customer abandonment during onboarding on the rise, being armed with as much knowledge on the updated Directive as possible has never been more important for financial advice businesses and their customers.

To help, we’ve broken down the facts and put the changes into perspective, and they’re really not as headache-inducing as you might think.

So, what’s happening? To put it simply, by the 10 January 2020, all EU regulated entities will need to be compliant with the Fifth Anti-Money Laundering Directive (5AMLD).

Looking at it in its simplest form, the 5AMLD is designed to better counter the financing of terrorism and increase transparency in financial transactions.

Digging a little deeper for existing regulated businesses, the EU says the changes will focus on three key areas; Beneficial Ownership, High-risk third countries and PEPs.

For regulated businesses, this means you’ll need to re-verify customers when their risk changes, and undertake full Identity and AML checks for customers who were out of scope of the regulations.

For more in-depth information on the Fifth Anti Money Laundering Directive, please click here and read GBG’s in-house expert Jonathan Jensen’s complete overview.

GBG has been supplying Intelliflo customers with a simple electronic AML solution for over six years, helping to ensure everyone has access to a robust EIDV product that can help adhere to regulatory change, and to vastly enhance customer onboarding experiences.


Money Laundering