Digitalising KYC and AML flows at Fund Channel
Read how Fund Channel streamlined its customer onboarding, operational workflows and compliance with a unified digital platform.
About Fund Channel
Fund Channel is a B2B fund distribution platform with headquarters in Luxembourg and additional branches in Italy, Singapore and Switzerland. Partnering with more than 600 fund management firms and over 100 fund distributors, it oversees assets exceeding a total of 400 billion euros.
Challenge: improving workflows and customer service through a single platform
“We’re always looking for ways to reinforce our Know Your Customer (KYC) and Anti-Money Laundering (AML) capabilities,” says Régis Veillet, Head of Business Development at Fund Channel. “Our commitment is to adopt a proactive approach in strengthening our platform’s single-entry point for AML/KYC and distribution due diligence. Finding an integrated digital environment would be a natural next step.”
The main aim for this digitalisation effort was twofold. On the one hand, the team at Fund Channel were looking to provide a more streamlined, faster service to clients. At the same time, an integrated digital approach to KYC and AML would simplify internal processes, with a secure operational workflow for all team members across different branches.
Solution: integrated digital platform with full AML and KYC capabilities
After scanning the market to find the best technology fit that could also integrate fast with their existing ecosystem, Fund Channel chose Finologee’s KYC manager: the Harmoney-powered platform tailored to Luxembourg-based organisations. The decision to implement an end-to-end compliance platform for its digital client data and risk management was driven by three key objectives:
- Streamline and automate customer onboarding.
- Improve connectivity between end clients, front-office agents and compliance teams.
- Ensure full regulatory compliance, without compromising on a personalised customer experience.
Modules used
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M.06 AML, PEP, sanction, embargo and adverse media screening
Whether it’s in the onboarding acceptance process or as part of client lifecycle management, Harmoney caters for automated screening. Screening providers such as LexisNexis, Refinitiv, and Dow Jones are already integrated within the Harmoney solution. Financial institutions can keep their screening providers of choice and Harmoney easily links to them via an integration layer.
This brings all the benefits of integrating the Harmoney solution while maintaining risk screening continuity, with features such as ‘fuzzy matching’. Detailed reports on ‘hits’ can be automatically generated and linked to the private individuals or legal entities concerned. In many cases, institution-specific blacklists are also included in the automated screening.
M.07 Comprehensive risk scoring engine
The risk scoring module can be configured according to the risk matrix of the individual financial institution. The scoring engine can manage a high level of complexity and can include a range of risk parameters relevant to every stakeholder involved, whether UBOs, insured persons, company groups or other related parties, or related to the type of contract or product.
Depending on the risk scoring outcome, a range of workflow configuration types can be defined to meet your exact needs: from automated approval processes and requests for further information via the client outreach module, to escalation workflows and the acceptance/rejection decision-making process.
A clear track of the screening as well as every decision and interaction is retained to provide a continuous audit trail in the contract or client file.
M.08 Case management and continuous risk monitoring
Harmoney has been built to provide financial institutions with an all-encompassing client lifecycle management tool. Continuous risk screening and monitoring, including AML, PEP, and adverse media, can be organised at a frequency to suit your risk policy, and adapted to whether the risk profile is low, medium, or high.
Continuous screening can provide extra reassurance as well as process efficiency.
The potential hits arising from continuous screening can trigger additional workflow such as collecting further digital information from the client via the Harmoney client outreach module with a subsequent new risk assessment and compliance decision.
Unfortunately, continuous screening exercises can sometimes generate a significant number of false positives. The Harmoney platform has built-in intelligence to manage this phenomenon while staying in control of the risks, thus reducing the workload of the compliance and commercial teams.
M.09 Transaction monitoring
While Harmoney can bring all KYC and AML items into a single integrated platform, connections with transaction monitoring systems such as NetReveal and SAS AML may also generate triggers which can lead to new workflows.
This requires further information from the client, including proof of the source of funds, which again may lead to a new assessment and decision.
Outcome: full compliance and internal efficiencies
The collaboration began with an initial implementation of the Harmoney-powered KYC Manager as a digital onboarding tool, designed to complete Fund Channel’s oversight services unit. “This has simplified the company’s internal processes while ensuring compliance with the complex regulatory requirements in the fund distribution space,” explains Jonathan Prince, CSO and co-founder of Finologee. With the platform in place, the team at Fund Channel has all the building blocks it needs to keep building its perpetual KYC capabilities, run remediation campaigns and manage automated AML screening – all with full peace of mind.
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