The G2 Risk Summit Series events offer multiple opportunities for networking and socializing with payments industry peers. At each of the four locations we are hosting an evening activity, giving attendees one more…
Join the conversation while we discuss why reputation monitoring is so important to KYC and as we highlight the threats and trends…
A case study outlined by G2 last year highlighted a food ingredients company laundered for a spice drug syndicate. The psychoactive substance, also known as…
When it comes to building a comprehensive KYC program, monitoring your business customers’ reputation is an important component. A declining reputation can signal that a particular business customer is engaging in…
As if to finish the year on a watchful note, FinCEN announced December assessments against two businesses that operated in ways that could conceal the flow of dirty money. They both violated the Bank Secrecy Act (BSA), yet neither one was a bank.
The concept of de-risking continues to hold sway when compliance and AML leaders get together. This was true at the ABA Money Laundering Enforcement Conference in Washington, DC November 14 – 17. It was a double-ABA, co-hosted by the American Banking Association and the American Bar Association.
Operation Choke Point has produced a spike in activity, with last week yielding two major settlements totaling over $6 million after a year of relative calm. As a result, G2 is reprising our 10 Steps guide for avoiding the unlawful activity that got the two defendant banks in trouble.
Recent headlines from CommerceWest Bank and Plaza Bank continue to underscore the need for a strong due diligence process when managing relationships with merchants and TPPPs. Although both cases involve complicity in fraud, they do highlight the consequences of being involved with such acts as well as how to avoid suspicions of impropriety. In the case of CommerceWest Bank, the pleading outlines several steps to ensure the bank is not abetting consumer fraud by taking precautions when working with payment processor customers including…
With regulations changing in payments, some financial institutions seem to be reacting to fear when dealing with their TPPPs and originators, rather than enhancing their boarding and compliance processes. With just a few adjustments, companies can keep variety in their portfolio, while still adding revenue in a fast, efficient manner.
The struggle with compliance needs was recently highlighted when Citigroup disclosed that the finance industry could spend as much as $10 billion annually in order to combat money laundering. This, along with the fact that compliance issues in 2013 caused M&T Bank to lose close to 18% in net income, has led to many questions. The payments world is left wondering: “why is so much spent on reactionary instead of precautionary measures?”
At the IAFCI conference in Phoenix, Rayleen Pirniv (EPCOR) and Jeanette Fox (NACHA) stated a main difference between credit card networks and the ACH:
“Unlike Credit Card processors, the ACH has no prohibited business types.”
What exactly does that mean for you?
Like a pebble in a pond, the ripple effect of a bad third party can always be traced back to the source.
Every year, over 18 billion transactions representing $40 trillion in volume, flow through the ACH network. This is far more than the card networks – and with the mandatory EMV adoption in 2015 – we expect to see even more fraudsters transition their activities from credit card to the ACH network. With the proper due diligence and monitoring, much of this fraud can be prevented.
Data mapping has increasingly become one of the most important tools to identify and manage merchant risk in the rapidly shifting payments landscape. When reviewing a merchant application and its basic business information, there is much more than meets the eye. Often, there lies an entire network of connections between the merchant and existing domains, directors, IP addresses, third party providers, and risk history. Why does this matter? Well, if it is possible to identify relationships or connections between a new merchant on the web to current or previous entities, it’s possible to gather enough data to predict what risk they present to an acquirer or payment provider. Prediction rather than reaction is essential in mitigating merchant risk and fraud, both at boarding and throughout a merchant relationship.
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