General Guide to CCM
(Customer Compliance Management)
Definition
CCM stands for Customer Compliance Management and refers to business systems designed to manage your customer AML | CTF obligations. The aim is to help your business streamline onboarding and ongoing compliance monitoring using a dedicated compliance management interface which helps improve efficiency, accuracy and productivity.
What is a CCM Platform?
A CCM platform provides a centralized hub that holds all the compliance data for your clients.
The platform utilizes an advanced algorithm to determine the ultimate beneficial ownership of clients, even where complex ownership structures are involved, and is able to seamlessly integrate risk matrix, verification, screening and monitoring applications, associated to the relevant client.
Over time the platform will build an accurate client lifecycle record including significant events, such as a change in beneficial ownership or country of residence and any resulting re-risk assessment. Statutory reporting and compliance audits can be easily complied with as all relevant data is centralized and associated.
The platform also enables integration of more advanced automated functions, such as automated compliance with the OECD Common Reporting Standard (CRS). Automated compliance with complex regulations, such as the CRS, is only possible where AML | CTF data is held in a centralized CCM platform.
Why is CCM Important?
Modern financial regulations are interrelated and layered: for example, compliance with the FATF Recommendations provides a base layer of AML | CTF client data; successive financial regulations have been designed to build on and leverage this data. For example, compliance with the CRS requires effective integration of AML | CTF data, while compliance with the CRS Avoidance Mandatory Disclosure Rules requires effective integration of CRS data, and so on.
Modern regulatory compliance requires robust reuse and association of client data.
The problem is without a CCM platform, regulated entities and business professionals are forced to adopt a “pillar” approach to client data, resulting in disassociated data held in separate silos and perhaps spread across different teams and geographic locations. Long term this creates a significant compliance risk, and adversely affects the ability of the compliance team to improve the efficiency, accuracy and productivity of the compliance function.
A modern compliance strategy therefore requires, at its core, regulated data to be centrally held and associated, and ultimately automated; this creates structure and organisation for your compliance team and will foster increased efficiency, productivity and profitability as the cost of compliance is reduced. The software will facilitate team collaboration, reduce task duplication, manual data input, reconciliation and manual report preparation.
A CCM platform also gives greater insight into the level of overall compliance risk, providing a graphical overview of your clients, their recent activity and allocated compliance resource.
A CCM platform also enhances data security and supports compliance with applicable data privacy regulations.
What does a CCM Platform Do?
What does a CCM platform actually do and what is it used for? Here is a simplified list, with references to the applicable FATF requirements:
AML | CTF Compliance
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Facilitates efficient paperless client onboarding
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Facilitates application of client acceptance risk-based assessment, including integration and association of applicable risk matrix, sanctions and PEP screening software [FATF Recommendation 1]
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Facilitates customer due diligence workflow, documentation and oversight governance requirements [FATF Recommendation 10 and 22]
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Provides automated beneficial owner identification [FATF Recommendation 10, 24 and 25]
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Facilitates risk based ongoing client due diligence, transaction and structure monitoring, as well as audit and re-risk assessment [FATF Recommendation 10 and 12]
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Facilitates accurate and up to date client record-keeping [FATF Recommendation 11]
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Facilitates adoption of group-wide AML | CTF policies, procedures and data sharing [FATF Recommendation 18]
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Facilitates AML | CTF related reporting requirements [FATF Recommendation 20]
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Facilitates timely response to regulatory requests [FATF Recommendation 27, 28 and 31]
Other Regulatory Reporting
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Facilitates adoption of SMART automated digital compliance
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Facilitates adoption of semi-automated regulatory reporting under the OECD Common Reporting Standard [CRS Expert Reporting >]
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Facilitates adoption of semi-automated beneficial ownership regulatory reporting
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Facilitates future development of machine readable semi-autonomous digital regulatory compliance
Education and Communication
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Facilitates targeted interactive employee training [CRS Expert Training >] [FATF Recommendation 18]
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Enables integration of relevant industry compliance updates and resulting internal communication and escalation.
Team and Process Integration
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Facilitates team and process integration
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Facilitates office team integration
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Facilitates group-wide integration
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Facilitates team and process efficiency analysis
Client Insight and Analytics
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Accurate, detailed client wide risk analysis
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Accurate, detailed client wide AML | CTF process analysis
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Accurate, detailed client wide activity insight
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Accurate, detailed compliance process audit record
Who Needs a CCM Platform?
The primary users of a CCM platform will be your compliance team, but may also include the tax and legal teams if the overall compliance function is spread across different departments and/or geographic regions.
Subject to suitable governance protocols and controls, other team members may also be expected to interact with a CCM platform, including relationship managers, administrators and accounting staff, where relevant client data is required to be captured in a central CCM platform - for instance, change of client address, tax residence or beneficial ownership.
When’s the Right Time to Invest in a CCM Platform?
The right time to invest in a CCM platform will vary according to your business and regulatory circumstances. As a rule-of-thumb, if any of the following has or will occur, you will need to consider use of a CCM platform:
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AML | CTF regulatory fine and enforcement action
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AML | CTF audit failure outcome
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AML | CTF internal audit failure outcome
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CRS audit failure outcome
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Inefficient client onboarding processes and procedures
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Inefficient or limited enhanced due diligence monitoring
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Planned or recent merger, acquisition or sale of a regulated entity
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Planned or recent high risk business expansion (client segment, geographic region and/or service line)
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Compliance team spending >15% year-on-year
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Compliance team turnover >20% year-on-year
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Client growth >15% year-on-year
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More than 80 separate clients with complex (more than three layers) ownership structures
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Outdated spreadsheet (Microsoft Excel) compliance practices
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Planned jurisdiction implementation of FATF 40 Recommendations, particularly Recommendation 24 and 25 relating to Transparency and Beneficial Ownership
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Resident in FATF “Grey List” jurisdiction >
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Resident in European Union “High Risk” jurisdiction >
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Resident in a jurisdiction with a negative FATF Mutual Evaluation
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Resident in a jurisdiction with a negative Moneyval Mutual Evaluation
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Resident in a jurisdiction implementing a register of beneficial owners
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Implementing a digital transformation strategy across the entire business
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Severe economic downturn and/or recession