Key Risks in 2021

 
 Earlier this month, Deloitte Financial Crime Risk Consultant Julian Hunn shared what he thinks are going to be the opportunities and challenges in 2021. 
 
Retention

• The availability of good resources will be a challenge for organisations 
• Retention of good staff will be a challenge since professionals will follow the opportunities

 
 Focus on Non-banks 

• Senior managers leaving traditional banks and going to non-banks 
• But there will also be a greater regulatory focus on non-banks for the next 12 months form a--This would include Fintechs that have been growing substantially over the last couple of years.  
• Many of the Fintechs, and other start-ups, have been growing rapidly but they have not been matching with the growth of the compliance systems or functions 

 
Designated Services depending Fintechs/Regtechs to provide AML/CTF related services financial Services 

• There is a potential risk of there being a substantial gap between the understanding of technical IT systems and expertise in building effective and compliant systems--some businesses might risk buying tech products that might not be fit for purpose.  

 
De-risking 

• Some incumbent financial institutions might take the view that there is too much risk from remittance services
• Banks are too risk-averse to take these bitcoin exchanges, and remitters ---banks are not confident and about the implementation of the AML programs but are they tailored to the risks 

 
New Regulation 
 
Tranche 1.5 

• The anti-Money Laundering and Counter-Terrorism Financing and Legislative Amendments Bill 2019 passed both houses in December. Organisations should understand the reliance on other companies and providing designated services before completing the identity verification checks. 
• Monitoring of Supply-chains will become even more prevalent and will include Sanctions, Bribery, and corruption, modern slavery. 
•  Reporting and non-reporting entities will need to understand their supply chains. The latter might not only fall under the Australian Transactions Reports and Analysis Centre (AUSTRAC) remit but there is the Australian Border Force (ABF) and the Department of Foreign affairs and Trade (DFAT) who will also have oversight

 
Corporate Crimes Bill 

• Crimes Legislation Amendment (Combatting Corporate Crime) Bill is currently before the Senate at the time of writing but is expected to pass in 2021
• Non-banks need to understand how to tackle this legislation, modelled after the UK Bribery legislation which focuses on the originations rather than the individual