Arts & AML: Why people should be at the forefront for all market participants regulatory planning
In an international effort to fight terrorist financing, UK art dealers are now responsible for the appropriate checks on each transaction and identifying each client in order to conduct risk assessments for ongoing customer due diligence.
Art market Participants have been put into a very different regulatory position in the last year with the requirement for their adoption of AML compliance procedures.
Under the new UK AML regime, the government is entitled to conduct AML compliance audits in much the same way as Inland Revenue is entitled to conduct tax audits . Now, market participants in the UK will need to start preparing for rigorous compliance audits, something many companies in this space will find a very alien and daunting concept.
The current process involves considerable manual input and time-consuming investigation, and the teams involved in this process will not currently have the benefits of automation at their disposal, particularly in the areas of identity and adverse media checking.
Adjusting to new norms can be difficult and many AMPs’ fear that new KYC regulations will be too complex to implement as there is a lack of compliance infrastructure and staff to conduct the necessary reporting and audits.
Why Art market dealers will need more than automation as a solution
Dealing with clients new to rigorous compliance processes can have negative impacts on sales and transaction times, so making sure this process is seamless will be imperative.
Technological solutions may be able to pull reports and conduct checks, however what will be key is understanding which types of reports to run and what type of information will be required – some transactions of course can be more complex and will require more detailed reporting.
Skilled and experienced individuals will be needed to ensure that the reports which are run are the correct ones and can help guide the customer through KYC processes that can be complex in nature.
It’s a people-based industry and an effective compliance function should mirror this.
The right people remain a vitally key component in your compliance function to ensure regulatory changes, challenges, and priorities are both met and adhered to.
A robust compliance platform equals a combination of technology and people
Ensuring that the skills and suitability of the individuals you retain are just as imperative, if not more so than the technology automation you implement.
The human is still the single most important element of your compliance function and regardless of what technological development or trend comes to play, will always be. Hiring the right talent should be at the forefront of ensuring your compliance team is as resilient as it can be.
What is needed, now more than ever, is a combination of a people-plus technology solution. Automation of your current AML processes and systems can only take you so far – they need to be purposeful, and the right people will very much be needed to achieve this.
Technology automation can of course help with repetitive and relatively mundane tasks, but people can and must oversee automation, as well as ensuring that informed and accurate decisions are being made.
Why do you need to consider additional contingent support?
Dedicated and specialised additional resources for your business during this process will help you to avoid wasted time and allow you and your clients to not only remain compliant but crucially to also conduct BAU.
Many art dealers will not have had to equip their teams with compliance professionals until now, so they must ensure they are bringing in the right skilled talent that will enable them to develop systems and processes that are compliant.
Momenta are a global contingent resource solutions firm that has, for over 30 years, been partnering with companies in the financial services, legal, technology, and training and development sectors to cost-effectively provide the right people, with the right skills, at exactly the right time.
Providing experienced resource to undertake reviews is Momenta’s core competence and with over 30 years’ experience of providing compliance resource, we have suitable candidates to put forward immediately that would only need a familiarisation/induction program to cover client’s internal standards, processes, and systems.
Many clients prefer to buy a managed integrated service solution that can deliver greater flexibility and offer scaling to absorb spikes in volume and cost benefits through fixed pricing.
We believe this would be a preferred approach to delivering the service, meeting client specific requirements.