KNOW YOUR CUSTOMER

EMPOWERING THE INTELLIGENT ENTERPRISE

Gibbs Hybrid is pleased to share our Know Your Customer range of services. We have been helping our clients navigate confidently and effectively through the complex Know Your Customer (KYC), Anti Money Laundering (AML) and Counter Terrorism Financing (CTF) regulatory landscape.

Our services have directly contributed to increased quality standards, improved workflow structure and effective Risk Management controls - helping our clients meet and exceed Regulatory Audit Standards.

We are also aware of the uncertainty surrounding Brexit, and we have developed a dynamic methodology around that in order to help clients navigate successfully between the UK and other European jurisdictions.

Gibbs Hybrid offers a range of end-to-end interchangeable regulatory services across various key international financial centres. We provide expert teams to optimise project structure, implement workflow best practice and build operational processes which directly increase ROI and deliver measurable value to our customers.

Our international multilingual team of highly trained and accredited compliance managers and analysts provide a comprehensive suite of KYC Solutions, including Migrations, Remediation/Refresh, BAU and Advisory Practice. Further niche solutions are available, such as High-Risk Entity Management and Risk Classification Tool Automation.

EXECUTIVE SUMMARY: KNOW YOUR CUSTOMER

ALL PROJECTS UNDERTAKEN BY GIBBS HYBRID ARE UNDERPINNED BY OUR CORE PM PRACTICE AND SUPPORTED VIA INTERNAL SERVICE MANAGEMENT DEPARTMENTS, TO ENSURE EXPERT EXECUTION AND PROVIDE CONTINUOUS SERVICE IMPROVEMENT.

EMPOWERING THE INTELLIGENT ENTERPRISE

Money Laundering and Counter-Terrorism Financing acts, legislation and regulations have systematically evolved over the years to help combat the threat of organised crime, global terrorism and international embargo sanction lists. The emphasis on Know Your Customer obligations have increased and penalties for non-compliance have subsequently followed the same trend.

The EU’s 4th Anti Money Laundering Directive was the most sweeping European Anti Money Laundering legislation in recent years. All EU member states have the obligation of full

compliance within the new mandate. To add to the complexity, AML rules from specific regions can differ, increasing the demand on Financial Institutions (FI’s) to commit budget and man-hours to ensure they comply with regulatory guidelines.

OFAC & FinCEN’s updated Bank Secrecy Act, International Sanctions and Proposed Beneficial Owner Rules have had a heavy impact on existing regulatory workloads. Some of the recent notable changes have placed a more granular emphasis on UBO – Ultimate Beneficial Ownership, Expansion of PEP Definitions, Increased Global Sanctions and Risk-Based Approaches.

TOP 5 BANKING INSTITUTION FINES FOR MONEY LAUNDERING AND SANCTIONS VIOLATIONS

TOP HIGH-RISK/LOW-RISK COUNTRIESGIBBS HYBRID KNOW YOUR CUSTOMER

Know Your Customer compliance programmes have steadily emerged as a high priority and key component on Financial Institutions’ Strategic Risk agendas. Global budgets continue to increase annually as organisations strive to comply with benchmark guidelines. AML has now become the most common category of regulatory body action and enforcement.

The consequences of non-compliance have been well publicised. Some organisations have been held accountable for failing to take the appropriate measures in relation to Money Laundering, International Trade Sanctions and Tax focused violations. Inflated financial penalties consisting of fines & settlements, criminal & civil liabilities are some of the key characteristics of the Regulators Bodies’ appetite and willingness to act.

Gibbs Hybrid helps our customers build a robust and effective AML/KYC defence. We provide skilled and qualified Compliance SME’s as part of an integrated solution.

Snapshot of notable regulatory fines & settlements – cases were brought against banks for Money Laundering of organised crime proceeds and Sanction Violations against businesses and individuals connected to Cuba, Iran, Libya and other OFAC listed countries.

$8.9B - France

$1,98B - UK

$1,5B - Germany

$1,2B - China

$1B - UK

$8.9 Billion

$1.5 Billion

$1.9 Billion

High Risk Low Risk

Insufficient Data

KYC INSIGHTS & IMPACTS

Selection of KYC Industry insights, covering a range of subjects: impacting regulations, budget allocation for regulatory technology, enhanced due diligence and risk rating by country.

High Risk Low Risk

AML/KYC DEFINING MOMENTS

US Bank S

ecre

cy A

ct

War o

n Dru

gs

UK Anti-

terro

r Act

911 - U

S Patrio

t Act

Subprim

e Mortg

age Cris

is

Major b

ank fined

$1.9B

Major b

ank fined

$8.9B

AML 4

th Dire

ctive

UK Sancti

ons and A

ML A

ct

AML 5

th Dire

ctive

Expec

ted

Brexit

?

1970 1980 2000 2001 2008 2012 2014 2015 2017 2019 2020

REGULATIONS IMPACT ON WORKLOAD

71% - OFAC/EU 50% Rule

71% - FINCEN CDD Rule

53% - EU Fourth Directive

Dow Jones & SWIFT AML Survey - respondents cite specific regulations contributing to workload increases.

RegTech BUDGETS REGULATIONS BEING ADDRESSED

AML and KYC topped the regulatory technology budget commitments organisations made last year, with this trend expected to continue.

Solvency II PSD2 Basel III GDPR MIFID II KYC AML

ACCOUNT TYPE EDD

Thomson Reuters & ACAMS AML survey respondents reported what levels of enhanced due diligence were required for each account type.

Individual Customer

26%

Commercial Business

40%

Complex Entity (Fund, Trust, Foundation)

45%

TOP 5 HIGH VS LOW RISK COUNTRIES

The Basel AML Index measures the risk of money laundering and terrorist financing of countries based on publicly available sources. A total of 14 indicators dealing with

AML/CFT regulations, corruption, financial standards, political disclosure and the rule of law are aggregated into one overall risk score.

NEW ZEALAND / LAOS

BULGARIA / TAJIKISTAN

ESTONIA / GUINEA-BISSAU

LITHUANIA / AFGHANISTAN

FINLAND / IRAN

0 1 2 3 4 5 6 7 8 9 10

8.28

8.28

8.35

8.38

8.6

3.91

3.87

3.83

3.67

3.04

GIBBS HYBRID SOLVING YOUR KYC CHALLENGES

KYC CORE SERVICES

MIGRATION

Full migration of existing client’s records and accounts from one jurisdiction to another. A Know Your Customers Account Migration can cover the full range of core services and correspondent component process. We cover the entire lifecycle of the migration with our cross-border KYC teams.

REMEDIATION & REFRESH

A full review of existing accounts and client records to ensure compliance requirements meet specified regulations. Review and adaptation of existing files to align new policy. New policy implementation within the subject institution or via consequence of a merger process.

BUSINESS AS USUAL

Gibbs Hybrid also provides BAU operational Services to support on-going client onboarding with full adoption of the bank’s policy and the systems in place. We can assist your ongoing client onboarding requirements, enabling you to concentrate on core business.

ASSESSMENT & ADVISORY

Our Assessment & Advisory Services revolve around Gibbs Hybrid coming in and taking an independent look into your existing processes, procedures and technology to help you optimise the structure of your AML/KYC work stream.

Gibbs Hybrid supports financial institutions with a flexible and diverse range of Know Your Customer (KYC) Services, enabling our clients to meet their AML (Anti Money Laundering) and CTF (counter-terrorist financing) regulatory commitments via the Gibbs Hybrid Know Your Customer Service & Solution range. Whether it’s a full-scale account migration with complete end-to-end process design and management or individual services to supplement your organisation’s existing AML Programme, the Gibbs Hybrid KYC

Solution helps our clients define and optimise Processes & Tools while providing highly trained, accredited and multilingual teams underpinned by our Agile Project Management Principles (PMaaS). The end game is enabling our clients to meet their Regulatory Commitments while mitigating the risk more efficiently and cost-effectively.

GIBBS HYBRID OFFERS OUR CLIENTS A RANGE OF END-TO-END, INTERCHANGEABLE, KNOW YOUR CUSTOMER SERVICES THAT CAN BE TAILORED TO SUIT INDIVIDUAL BUSINESS NEEDS.

GIBBS HYBRID REMEDIATION & REFRESH

A full review of existing accounts and client records to ensure deadlines and compliance requirements meet regulatory standards.

We coordinate new policy implementation within a single institution or as a consequence of a merger or acquisition.

Review, upgrade and adaptation of existing files to align new data against new policies.

Periodic Review

Account Remediation

Data Cleanse

Upgrade and Refresh

GIBBS HYBRID BAU / NEW CLIENT ONBOARDING

GIBBS HYBRID RISK CALCULATION TOOL & CLARA

Definition, modelling and QA review of standards and approach for client’s risk calculation tool and client risk assessment (CLARA).

Collaboration with the Compliance Department to obtain clearance for different fields within the risk calculation tool, as well as areas or topics that this tool should capture to calculate the compliance risk of the account accurately.

Training to guide client’s existing analyst team on CLARA, taking the potential risks of AML into consideration.

Gibbs Hybrid provide B.A.U operational services to support ongoing client onboarding, with full adoption in line with Financial Institutions policies and systems.

We support your ongoing client onboarding requirements enabling you to concentrate on your core business.

New account request

FI - Financial Institution

New Client KYC process

Due Diligence Passed Client and FI notified

Due Diligence Failed FI notified – Escalation

GIBBS HYBRID ACCOUNT MIGRATION

Full migration of existing client records from one jurisdiction to another. Migrations can cover the full range of core services and correspondent component process. Gibbs Hybrid cover the entire lifecycle of KYC account migrations.

PROJECT DESIGN & GOVERNANCE

Design of processes, procedures, supporting systems, local laws and workflow with multi-lingual KYC squad team fully mobilised.

CLIENT ACCOUNT MIGRATION

Client’s customer accounts are migrated to a new location in an alternative jurisdiction. All account types are covered, from straightforward individual and corporation accounts through to more complex funds, SPVs and charities.

OFFBOARDING

Offboarding of existing client accounts from source jurisdiction and client’s current business location.

This process can be performed by Gibbs Hybrid or in conjunction with the client’s existing internal teams.

METRICS AND REPORTING

Detailed reports covering tangible, value-driven metrics and insights for compliance departments and business sponsors.

HIGH-RISK SERVICE

KYC process for high-risk entities and complex structures. Our high-risk unit is formed by teams with advanced experience working with complicated ownership and high-risk jurisdictions. Multilingual SME’s covering the location of the client and associated private bank, investment bank or funds.

GIBBS HYBRID KYC SERVICES STRATEGIC INTERNATIONAL LOCATIONS

Gibbs Hybrid is established in countries across multiple key financial centres - London, Dublin, Luxembourg and New Jersey (NA). We help Investment Banks, Transfer Agents, Custodians, Investment Funds, Corporate/Retail Banks and Insurance Organisations to navigate their way through the Anti Money Laundering, CTF and International Sanctions landscape, while improving the ROI by streamlining KYC business processes and functions.

With core competencies underpinned by Gibbs Hybrid’s Project Management disciplines and methodology, we support our customers with a wide range of services, varying from complex jurisdictional account migrations through to assisting in particular areas of our clients’ already established, mature KYC Programmes. While this map shows core Gibbs Hybrid locations, we can also support customers in other international locations where required.

Gibbs Hybrid KYC Solution Services is strategically located to ensure we can provide our clients with a comprehensive international service, supported by our team of highly experienced multilingual KYC specialists.

GIBBS HYBRID CREATES BESPOKE & CREATIVE KYC SOLUTIONS TO ENSURE OUR CUSTOMER’S RISK IS MITIGATED, PERFORMANCE OPTIMISED AND COSTS ARE REDUCED.

NE WAR KNORTH AMERICA

• USA• Canada

UAE

• Dubai - opening in 2020

GIBBS HYBRID KYC SERVICES STRATEGIC INTERNATIONAL LOCATIONS

DUBL IN MANCHE ST E R

L ONDON

L UXE MBOUR G

GDANSK

DACH REGION

• Germany• Austria• Switzerland

CEE

• Poland• Hungary• Czech Republic• Romania• Slovakia• Ukraine• Bulgaria

WESTERN EUROPE & BENELUX

• UK• Ireland• Netherlands• Belgium• Luxembourg

• France• Spain• Italy• Portugal

NORDICS

• Sweden• Norway• Finland• Denmark

EMPOWERING THE INTELLIGENT ENTERPRISE

THE QUESTION IS COMPLEX AND THE ANSWER IS DEPENDENT ON THE FINAL STRUCTURE OF THE AGREEMENT AND IMPLEMENTATION. THE DEVIL IS IN THE DETAIL.

The UK, however, has always been an advocate of implementing EU regulatory legislation to its fullest, and that is unlikely to change regardless of the outcome.

The deeper complexities lie in potential disruption to UK/EU trade agreements, tax changes and issues around the free flow of workers between European countries.

This is the reason we have already seen a number of financial institutions relocating European operations from UK to Ireland, Luxembourg and other jurisdictions.

From an AML/CTF/KYC perspective, when organisations need to migrate current KYC records to a new jurisdiction, Gibbs Hybrid can help.

Our team can manage the transitional process from the initial requirement analysis phase through to migration execution and final remediation and refresh of policy standards against new local regulatory stipulations. The goal is a smooth transition of KYC accounts. We have built an extensive multilingual AML/KYC unit across the UK, Ireland and Luxembourg, and we can leverage our expertise and cross-border teams to enable organisations to take the necessary steps seamlessly.

BREXIT, THE BURNING QUESTION…

What impact will the UK’s departure from the EU have on the regulatory landscape and - more importantly perhaps - how will this change the way in which global financial institutions structure their European operations?

GIBBS HYBRID BREXIT KYC TRANSITIONAL SERVICE

3- EVALUATION AND REMEDIATION SERVICE

Evaluation of the new regulation applicable to the accounts after the final Brexit agreement and consequent remediation performed on the accounts to adjust them to the new jurisdiction.

1 – ASSESSMENT AND ADVISORY

• Assess relevant accounts against individual risk characteristics. • Analyse differing requirements between the accounts’ current

jurisdiction and the country to which the accounts will migrate.• Propose final plans for the most appropriate method to proceed.

2- MIGRATION SERVICE.

Execution of the migration by Gibbs Hybrid’s multi-location team. The process can be in combination with the client’s internal team or by externalising the end to end process through Gibbs Hybrid’s project management practice working in conjunction with GH KYC Unit.

ACCOUNTS MIGRATED

BREXIT DEADLINE

INVESTMENT BANKING

PMaaS

PRIVATE BANKING

LUXEMBOURG IRELAND

UK ACCOUNTS

GH KYC CENTRAL UNIT SUPPORT

Javier Basarte Acin

Principal KYC Consultant Partner Javier.basarte@gibbshybrid.com

Mo Mohammed

Programme Solutions Manager Mo.mohammed@gibbshybrid.com

Contact kyc@gibbshybrid.com to discuss how we can support your organisation through a broad range of KYC projects.

WWW.GIBBSHYBRID.COM

Manchester 196 Deansgate, Manchester, M3 3WF

T: +44 (0)161 260 0716

Head Office Cantium House, Railway Approach, Wallington, Surrey, SM6 0DZ

T: +44 (0)20 8773 7650

Gdansk Alchemia al. Grunwaldzka 411 Pomorskie 80309

T: +48 570 302 405

Luxembourg 26 Boulevard Royal Luxembourg 2449

T: +352 691 958278

USA One Gateway Center Suite 2600 Newark, NJ 07102

T: +1 973-622-8187

Dublin The Brickhouse Block 1, Clanwilliam Court Lr Mount Street Dublin D02 CF97

T: +353 (0)1 9053515

EMPOWERING THE INTELLIGENT ENTERPRISE