THE REAL DEAL Embracing compliance
The vast majority of issues are resolved without difficulty, but one or two cases every month raise a significant red flag. BCB naturally rejects prospective clients that have been unable to meet the compliance requirements. Similarly, this may be the case for existing clients, after internal transaction monitoring and investigation. EU is setting industry benchmarks The regulatory and compliance agenda for the year ahead is a busy one. The incoming Markets in Crypto Assets (MiCA) regulation from the EU is imposing requirements on service providers. BCB itself is already an authorised Digital Asset Service Provider and is well on its way to meeting all the requirements of MiCA. The other key development in the EU has been the creation of the Anti-Money Laundering Authority (AMLA), objective of which is to coordinate national authorities to ensure the correct and consistent application of EU rules on money laundering and counter terrorist financing. Both MiCA and AMLA are examples where the EU is leading the way and are set to become the highest standards in these fields. “AMLA is going to unite Europe’s Financial Intelligence Units and that, to me, is something we all should be pushing for. There needs to be more transparency between us all to make this work, so anything that’s bringing about transparency is, for me, a winner,” says Routledge. Routledge’s team already monitors transactions, and where appropriate raises a suspicious activity report.
Routledge has also stopped some payments that looked to be in breach of international sanctions.
The other pressing issue is Authorised Push Payment (APP) fraud reimbursement, an area where the UK authorities are pressing hardest with new regulations and which they implemented in October 2024. “We have a lot of conversations with our clients, double checking the banners they have on their website, their geoblockers in place and the controls they have in place to warn their clients of the risks of crypto investing. These ongoing checks and conversations do result in us offboarding the clients who don’t maintain rigorous standards. “With the APP Reimbursement Policy now live, we have used this as a trigger across all of our retail exchanges to revisit them, to talk to their compliance teams to see what they are doing with regards to safeguarding themselves and their clients against this reimbursement regime.” Again, Routledge adds that these conversations have been hugely beneficial to all sides, with positive insights and ideas being shared between everyone involved. Such sharing and cooperation are, Routledge argues, the way forward, since the APP regulations mean that a confirmed fraud will result in shared liability between the Payment Service Providers that allows the fraudulent payment to be sent and received. Effective compliance is commercial good sense The evolution of regulation is not always smooth – and sometimes regulation goes awry – but Routledge argues that it is beholden on organisations like BCB to be engaged in dialogue with other companies and regulators to build a robust compliance culture in the industry, because effective regulation is in everyone’s interest. Routledge openly describes herself as someone who loves rules and for one simple reason: “When it comes to compliance, you have a duty to protect your own business and your clients, which, to a responsible service provider, amounts to the same thing.” ◆
Transaction monitoring BCB has an in-house team of 24 experts working on compliance and financial crime, supported by an external team of 24, covering the full client lifecycle with BCB Group. “We operate three tiers of checks for client and transaction monitoring” Routledge explains. “The first level is getting rid of most of the noise. Any issues are escalated to the second level – our senior analysts – who are trained to challenge and to spot anything which requires full investigation. Those examples go to level three where we really dig deep and conduct interviews with the clients.” AMLA is going to unite Europe’s Financial Intelligence Units and that, to me, is something we all should be pushing for. There needs to be more transparency between us all to make this work, so anything that’s bringing about transparency is, for me, a winner. Kym Routledge
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