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How EU’s latest AML laws impact HNWIs and property ownership




The introduction of the new AML laws in Europe signifies a pivotal shift for high net worth individuals (HNWIs). Renowned for their substantial wealth, these individuals now find themselves under intensified scrutiny.

The essence of this change lies not merely in identifying these affluent clients but in gaining an in-depth understanding of their financial pathways – the origins and destinations of their substantial funds. This rigorous scrutiny aims to erect a barrier against the insidious world of illegal activities such as money laundering.

For HNWIs, this regulatory overhaul translates into a more intricate compliance landscape, demanding a higher degree of documentation and thoroughness. While this increased scrutiny might initially seem burdensome, it heralds a new era of transparency, fostering a financial ecosystem that is both clean and trustworthy.

On the flip side, banks are compelled to upgrade their operational readiness. They are tasked with the critical role of dissecting their wealthy clients’ financial backgrounds, a process that necessitates a delicate balance between thoroughness and respect for privacy. Here, technology emerges as a pivotal ally.

Cutting-edge software and compliance solutions are set to revolutionize these background checks, making them not only more efficient but also more precise. This synergy between technology and regulatory compliance is not just about adherence to laws; it’s about sculpting a financial realm where wealth coexists with trust. For both HNWIs and banks, adapting to these new norms is not just crucial; it’s foundational for a future where integrity forms the cornerstone of the financial sector.

Europe’s latest AML laws mark a significant shift in property ownership transparency. Post-January 1, 2014, property owners are mandated to disclose the real, or ‘beneficial’, owners. This legislative move is a robust stance against the clandestine masking of property ownership through intricate layers of companies or intermediaries. The ultimate objective? To dismantle the shelters that harbor illegal undertakings like money laundering.

This regulatory evolution mandates businesses and property owners to maintain a precise and accessible record of ownership details, ready for inspection by authorities. Moreover, this transparency is not just a mandate but a stride towards integrity in business and property transactions. The disclosure norms also empower journalists and civil society entities, introducing an additional layer of scrutiny and accountability.

In essence, these reforms are not just about transparency; they are about fostering a marketplace where clarity is paramount, significantly fortifying the barriers against crime.

A critical component of Europe’s revamped AML statutes revolves around the imposition of thresholds on cash transactions, a move strategically aimed at combating financial crimes. For SMEs, this introduces a paradigm shift in transaction monitoring and reporting. Transactions exceeding €10,000 are now spotlighted, necessitating meticulous reporting – a mandate that encapsulates not just the corporate giants but SMEs as well.

Even for transactions that don’t hit the €10,000 mark but hover between €3,000 and €10,000, vigilance is paramount. SMEs are now the custodians of due diligence, tasked with the responsibility of decoding the origins and legitimacy of these transactions. While this might seem daunting, it essentially boils down to a culture of meticulous record-keeping and an acute understanding of the regulatory landscape.

These laws are not mere regulatory hoops to jump through; they are protective bulwarks shielding the economy and businesses from the threats posed by illicit financial streams. By aligning with these regulations, SMEs don’t just evade legal repercussions; they contribute significantly to a broader, more consequential crusade against financial crime.

The advent of custom rule-building in compliance processes marks a transformative phase, especially for SMEs. The new AML regulations underscore that generic solutions are obsolete. Businesses are incredibly diverse, with each entity characterized by its unique transaction patterns, customer profiles, and risk landscapes. Custom rules empower businesses to channel their focus on pertinent aspects, ensuring a compliance process that is both effective and efficient.

Flagright’s innovative technology exemplifies this trend, enabling businesses to set bespoke parameters for transaction monitoring. This could range from flagging transactions of certain magnitudes to those originating from specific geographical locales, particularly relevant under the new cash transaction thresholds. This bespoke approach not only guarantees compliance but also amplifies operational efficiency.

Moreover, in the realm of customer due diligence, the prowess to tailor compliance processes allows businesses to agilely navigate the evolving regulatory waters. Whether it’s verifying the identity of HNWIs or tracking the beneficial ownership of properties, technology-powered custom rules deliver a compliance strategy that is both precise and flexible. This not only mitigates the risk of non-compliance but also circumvents potential penalties.

In conclusion, embracing technology that facilitates custom rule-building is not merely about regulatory conformity. It positions businesses, particularly SMEs, at the vanguard of compliance innovation. By partnering with entities like Flagright, businesses are not just aligning with current regulations; they are gearing up for a future marked by rigorous compliance demands, ensuring their place at the forefront of a dynamically evolving regulatory landscape.

Source: Fintech Global

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Revolut introduces robo-advisor service in the Republic of Ireland





Revolut, the global financial super-app with a customer base exceeding 35 million worldwide, has recently unveiled its Robo-Advisor service in Ireland.

The company, known for its innovative approach to banking and financial services, aims to simplify the investment process for its users.

The introduction of the Robo-Advisor is a response to the growing demand for accessible investment options. Many potential investors find the research and management of investments time-consuming and complex, especially those with limited trading experience or those who cannot dedicate time to actively manage their portfolios.

Revolut operates as a financial super-app, offering a wide range of services from traditional banking to cryptocurrency trading. The app is designed to be a one-stop solution for users’ financial needs, making it easier to manage money in a fast-paced digital world.

The new Robo-Advisor service is designed to automate the investment process. By answering a series of questions, customers can have a fully diversified and customized portfolio created for them. This portfolio is then automatically managed, with investments made based on the customer’s risk tolerance and financial goals. The minimum investment to access the Robo-Advisor is EUR 100, with an annual management fee of 0.75% of the portfolio value.

Additional features of the Robo-Advisor include the ability for customers to set up recurring transfers from as little as EUR 10, allowing for regular portfolio growth and minimization of the impact of market volatility. The service also automatically rebalances portfolios and conducts periodic reviews to ensure alignment with the customer’s investment objectives.

Rolandas Juteika, Head of Wealth and Trading (EEA) said, “We are excited to add a Robo-Advisor to our suite of wealth and trading products. We know that many of our customers do not have the time to manage a portfolio or invest in individual securities. In fact, 53% of customers we surveyed last year said they simply don’t know where to start when it comes to investing. Built to make investing more accessible, we want to give our customers the ability to make their money work for them in what we believe will be a tailored and stress-free solution.”

Revolut’s recent expansion of its investment offerings across the EEA, including shares of European listed companies and the introduction of Trading Pro for advanced traders, highlights its commitment to providing comprehensive financial solutions. With over 2,200 US-listed securities, 220+ EU-listed securities, and 270 ETFs available through the app, Revolut continues to enhance its platform, making investing more accessible to a broader audience.

Investment services in the EEA are provided by Revolut Securities Europe UAB, which is regulated by the Bank of Lithuania. While Revolut aims to make investing straightforward and efficient, it’s important for customers to remember that investments carry risks, including the potential for loss and currency fluctuations.

Source: Fintech Global

The post Revolut introduces robo-advisor service in the Republic of Ireland appeared first on HIPTHER Alerts.

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Hawk AI welcomes new general manager Robin Lee





Hawk AI, a front-runner in AI-driven solutions for fraud and anti-money laundering (AML) surveillance, has recently announced the strategic appointment of Robin Lee as General Manager for the Asia-Pacific (APAC) region.

Tobias Schweiger, CEO of Hawk AI, expressed his enthusiasm about the new addition to their team. “I’m very pleased to welcome Robin Lee to Hawk AI. He brings deep expertise in regulatory compliance and outstanding knowledge of the anti-financial crime sector. He’s also an exceptional leader with an entrepreneurial spirit and infectious energy. We’re excited to have someone of his caliber onboard.”

Lee is also highly engaged in global financial crime fighting initiatives, currently serving as Vice-Chair for the APAC Chapter of the Global Coalition to Fight Financial Crime and as the Global FinTech Liaison for the US Department of Justice’s FinTech Sector Public Dialogue (FSPD), its public-private partnership focusing on FinTechs.

On joining Hawk AI, Lee shared his excitement, “I’m delighted to be joining Hawk AI. The Hawk AI platform is streets ahead of other vendors in the sector, with explainable AI that has been built-in from the ground up and an integrated approach to tackling financial crime that delivers truly extraordinary results for customers.

“I’ve also been deeply impressed by the Hawk AI team. They’re an exceptional group of people, combining world-class technologists and seasoned financial crime-fighters. I’m very proud to be part of their continued growth.”

Since its inception in 2018 by finance industry veterans, Hawk AI has shown remarkable growth. The company now plays a pivotal role in monitoring or screening billions of transactions worldwide. Its unique approach, leveraging explainable AI, has set new industry standards by significantly reducing false positives compared to traditional AML/Counter Financing of Terrorism (CFT) solutions.

Hawk AI’s modular solution offers financial institutions a powerful tool to either enhance or replace legacy systems with AI-powered transaction monitoring, payment screening, pKYC, and fraud prevention capabilities, ensuring greater accuracy and efficiency in real-time.

Source: Fintech Global

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Velexa launches new Fractional Bonds feature: Making elite investments accessible to all





Velexa, recognised as a top WealthTech100 company, has recently unveiled its latest innovation: fractional bonds. This new feature is a significant addition to their comprehensive suite of investment tools, designed for both embedded and standalone applications.

Following the successful implementation of fractional shares, Velexa’s move to introduce fractional bonds marks a strategic step towards making high-quality bond investments accessible to the mass retail market.

The introduction of fractional bonds by Velexa is set to revolutionize the investment landscape. This feature enables institutions to offer retail investors the chance to explore a diverse portfolio of over 300 high-quality corporate and government bonds. These bonds span major markets, including the US and the EU, and are available for investment with minimal initial sums.

This approach to asset fractionalisation—splitting a high-value asset into smaller, tradable units—is gaining momentum among capital market players. Despite the popularity of fractional shares, the bond market has remained relatively untapped, mainly due to its complexity and the high entry barriers for retail investors.

Historically, the bond market has been the playground of institutional investors, largely due to the high entry costs and the intricate trading mechanisms involved. Many bonds come with minimum investment requirements set by the issuers or dealers, typically in increments of $10,000, and often trade in lot sizes exceeding $100,000.

This structure has effectively sidelined retail investors, making it difficult for them to access bond investments. Velexa’s fractional bonds initiative aims to dismantle these barriers, opening up the bond market to a broader audience and democratizing access to what has traditionally been an elite investment domain.

Tamara Kostova, CEO of Velexa, emphasized the transformative potential of fractional bonds, stating, “With the roll-out of fractional bonds functionality, Velexa is taking a significant step to make the bond market more accessible, offering a lower-cost entry point into this vast market.

“More investors will be able to diversify their portfolios, potentially reducing risk and enhancing possible returns. As a company on a mission to democratise wealth generation through investing, building the right tools to empower retail investors to achieve their financial goals is a focal point in the way we design our technology.”

Velexa’s commitment to enhancing the personal investing experience extends beyond the launch of fractional bonds. The company’s API-based platform and solutions are designed to enable customers to offer a personalized and robust investment experience to their end-users. The modular technology allows for easy integration of new functionalities into existing channels and apps through Velexa’s Investing API solution.

The debut of fractional bonds is more than just an expansion of Velexa’s investing toolkit; it represents a crucial shift in the personal investing landscape. By bridging the divide between large-cap investments and the individual investor, Velexa is setting the stage for retail-focused institutions such as banks, neobanks, brokers, and exchanges to expand their customer base and cater to the diverse needs of the next generation of investors.

Velexa is a pioneering WealthTech company dedicated to democratizing the wealth management industry. Its B2B2X investing technology platform enables client institutions to tap into the growing demand for modern and ubiquitous investing solutions among new generation investors.

Source: Fintech Global

The post Velexa launches new Fractional Bonds feature: Making elite investments accessible to all appeared first on HIPTHER Alerts.

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