Some days ago, The Financial Conduct Authority (FCA) fined Guaranty Trust Bank (UK) Limited (GT Bank) £7,671,800 for serious weaknesses in its anti-money laundering (AML) systems and controls between October 2014 and July 2019. According to the FCA, GTbank “failed to undertake adequate customer risk assessments, often not assessing or documenting the money laundering risks posed by its customers.” These are cases that draw the attention of stakeholders within businesses and shine a light on the importance of ensuring that systems are in place to prevent such fines. In this week’s article, I argue that Nigerian companies need to be more proactive in their dealings globally.
Most stakeholders consider the existence of their establishment as being “local” and therefore, are not open to regulatory expectations of countries where they might serve customers. For example, a fintech company set-up in Lagos serves customers based in the Americas and Europe. These customers will go through a Know-Your-Customer phase before onboarding that customer. The customer submits, passport biometric data, drivers’ licence, bills etc. which are normal expectations for this fintech company. However, they’ve not put systems in place to ensure that these data sets are managed properly—retention schedules, deletion methods or even set up a Role Based Access Control (RBAC) methodology. Even worse, the company has not mapped, geographically, where their customers exist and map out what I call “regional acceptance criteria” for onboarding.
These new times call for companies to understand that companies operate globally and for companies to increase their revenue streams they must be willing to cater to citizens across the world. Unless the company decides to play specifically at the local level, they wouldn’t require putting these global measures in place. The world is morphing into a small unit meaning a company in Ghana can directly sell to a customer in China and vice versa. As such, the expectations from Ghanaian companies will be to understand the regulatory expectations of delivering to their Chinese customers.
Recently, I was talking to a stakeholder in Lagos whose y-combinator funded company services use a business-to-business-to-
Business stakeholders should not focus on attending operational and enterprise risks within their business alone. They must now factor into their business strategy the best ways they can address global requirements to remain competitive in these modern days. This global readiness helps companies attract international investments and beat the due diligence hurdle.
Fines are not what companies prepare or look forward to but there is more they can do to avoid them. Being proactive about how their business operations and systems expose them to risk is one key way to prevent such fines.
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