The Wall Street Journal conducted an online poll last month to find out from its readers what their biggest compliance issues were for 2014, both in the US and internationally. The results, while interesting, are hardly surprising.
When it came to the top compliance issue for last year, the spread of regulatory action outside of the US took the lead, followed closely by anti-money laundering (AML) investigations. Given the number of high-profile brokerage firms, such as Charles Schwab and Bank of America-Merrill Lynch, that were investigated last year for failure to comply with AML due diligence requirements, it makes sense that these two issues ranked highest on the list.
The poll revealed that 54 percent of the readers said that the security breaches at Target, Home Depot, and Sony were the top compliance-related crisis of 2014, and a resounding 72 percent responded that cybercrime and privacy would become the most important issues in 2015. One need not look very far or for very long to find numerous other examples of well-known and established companies and organizations that have suffered breaches, including Staples, JPMorgan Chase, UPS, Michaels, and Neiman Marcus.
Another interesting finding is that felt that outside of the US, China presents the greatest challenge in terms of compliance. With an extremely complex regulatory system and vast cultural differences with the West – coupled with the immense opportunities for those foreign businesses that can successfully navigate through the sea of requirements – China is both an attractive and frustrating emerging market. The US International Trade Administration advises businesses considering conducting business in China to carry out “thorough due diligence on potential partners or buyers before entering into any transaction.”
In light of these survey results, how can businesses effectively address the issues and concerns that were highlighted? A recent CNN article offers some practical cyber security tips applicable to both startups and large enterprises, such as having firewalls, encrypting files, and protecting login information. Lessons from the infamous Sony hack include not to use email for sending secure or sensitive information, smarter access permissions and password management, and having an incident response plan ready.
That takes care of security, but what about AML and the other compliance issues?
Trulioo’s GlobalGateway online electronic identity verification (eIDV) solution has been developed for the international market and was created specifically to help businesses comply with AML and Know Your Customer (KYC) rules and regulations. GlobalGateway has access to more than 140 data sources around the world that can be used to validate over 3 billion people in over 40 countries, including China. In fact, Trulioo has already helped companies grow their business in China.
“After implementing the GlobalGateway verification service, we are now able to easily verify a Chinese customer using their personal information which they provide through our account opening application,” said Amanda Albretsen, AML Compliance Officer at IBFX, an online foreign exchange platform.
