Exposed to AML Risk: The Importance of PEP Monitoring to Comply with Bill C-31

When Bill C-31 to amend Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) goes into effect on June 17, 2017, regulated entities will likely embrace some aspects, such as the amendment to the definition of “signature card” to include electronic signatures—a crucial change given the rise in online-only banking and digital transactions. But certain amendments will also require regulated entities to undertake major changes in their current AML compliance strategies. According to analysis, the changes “… provide a regulatory framework to govern the treatment of domestic politically exposed persons (PEPs) and provide additional components to be considered in risk assessments.” What do the regulations entail—and more importantly, how will these requirements impact the due diligence and on-going monitoring processes that regulated entities currently have in place?

 Anti-Money Laundering Legislation Addresses PEPs

One notable change in the amended PCMLTFA expressly prohibits Canadian financial institutions from “… opening or maintaining an account for, or having a correspondent banking relationship with, FMSBs or with foreign dealers in virtual currencies that provide services to residents of Canada and which are not registered with FINTRAC.” The key word—and resulting concern—is “maintaining,” which means that banks and other financial services organizations must not only vet new customers with regards to PEPs, but must retroactively review current clients and then maintain on-going monitoring to mitigate the risk of a compliance breach.

 What is a PEP? A Politically Exposed Person (PEP) is someone who serves or has served in a prominent public function, or an individual who is closely tied to such a person. By virtue of their position and the influence that they may hold, a PEP presents a higher risk for potential involvement in corrupt activity, including bribery. The latest version of PCMLTFA expands its customer due diligence expectations related to PEPs in three ways:

• A broader definition of foreign PEPs—Previously limited to foreign PEPs and specified family members, the updated scope now includes any person that the regulated entity “knows or should reasonably know” is closely associated with a foreign PEP through a personal or business reason, such as a friend or business partner.
• The addition of domestic PEPs—The amended PCMLTFA also introduces domestic PEPs who currently hold—or have held within a specific timeframe—specific offices including federal or provincial government heads, legislators, ministers, ambassadors, attaché, military officers with a rank of general or above, presidents of state-owned corporations, appellate and Supreme Court judges, mayors and other political office holders. As with the foreign PEPs, the requirement applies to individuals, their family members and other close personal or business associates.
• The inclusion of heads of international organizations as PEPs—As with domestic PEPs, regulated entities must also apply enhanced due diligence and on-going monitoring for any customers that are heads of international organizations.

 If a Canadian regulated entity has a global footprint, it may already have appropriate strategies in place, given the extraterritorial reach of laws already in effect, such as the U.S. Foreign Corrupt Practice Act. But for many financial services organizations, the need to vet current and future customers against PEP lists complicates—and potentially slows down—on-boarding of new customers, particularly if they do not have a single, reputable source for PEP profiles. Moreover, the amended PCMLTFA specifies that regulated entities must undertake enhanced due diligence to mitigate compliance risk if it detects any indication that an existing customer may be a PEP, which increases the due diligence workload significantly. To manage AML risk, regulated entities will need robust due diligence and on-going monitoring processes—along with flexible tools that empower them to get the job done efficiently and cost-effectively. Does your current process fit the bill?

 3 Ways to Apply This Information Now

1. See how LexisNexis tools can help you monitor and screen for PEPs
2. Download our eBook, Around the World in Eight Sanctions Regimes, to see how due diligence helps companies navigate the complex, ever-changing sanctions landscape.
3. Share this post to keep the dialogue going with your colleagues and contacts.

Cruise Line's Response to Reputational Risk Scuttles Viral Video

The Travel Industry has suffered plenty of blows in the past year, thanks to videos that go viral. But while some airlines failed to adequately address the reputational risk  arising from customer footage of regrettable moments, Carnival Cruise Lines recently proved that a quick, thoughtful response to potentially-damaging video can actually boost a company’s reputation. 

Transparency in the Face of Adversity Builds Trust

When a water line for one ship’s sprinkler system sent water gushing into a passageway in the midst of a Caribbean cruise, one guest’s Facebook video post replete with Titanic references quickly surged to 1.3 million views. But Carnival Cruise Lines responded swiftly—both on board where the crew took less than six hours to fix the leak, replace the carpeting and return the staterooms to pristine condition and in the public eye as the video gained a wider audience.

Covering the company’s response, Inc. contributor Minda Zetlin wrote, “I’m pretty sure that having a passenger post video of part of the ship underwater with text that reads ‘say a prayer for us all’ is high on the list of things you never want to have happen.” She went on to outline how Carnival offered a powerful lesson on turning reputational risk around—and transparency was crucial. The company could have easily stopped passengers from taking video—or temporarily suspended Wi-Fi to hinder sharing video with a wider audience—but instead crew members smiled for the cameras as they formed a “bucket brigade” to remove the water. As a result, current and future passengers alike saw that Carnival wasn’t trying to hide the unfortunate malfunction and was working hard to correct the problem—probably the best way it could ease people’s minds. Moreover, the company leapt into action on the media front, thanking its passengers for their patience and never downplaying the incident. While these are examples of proactive PR in action, the speed of Carnival’s response highlights the importance of using effective media monitoring system and continuous risk monitoring to spot reputational risks sooner.

Risk Monitoring Allows for Proactive Damage Control

As the saying goes, “Bad news travels fast.” Given the accelerated pace of news distribution thanks to digital media, getting out in front of a potential issue requires real-time awareness. Whether you need to stay alert to in-the-moment threats to your organization’s reputation or track sanctions and watch lists to protect against third-party compliance failures, risk monitoring is an essential part of effective risk management. Red flags that signal reputational, regulatory, financial or strategic risks can be surfaced sooner when organizations leverage AI-enabled monitoring technology to scan large volumes of data from web news, social platforms, regulators, and other relevant sources. And once you have better risk visibility, you’re also better positioned to respond decisively when risk threatens to sink your reputation or your bottom line.

Explore this topic further

1. Learn how LexisNexis® Entity Insight can help you proactively monitor for reputational, regulatory, financial and strategic risk.
2. Check out our Q&A blog post featuring Stephen Hahn-Griffiths, executive partner and chief research officer at the Reputation Institute.
3. Stay alert to in-the-moment threats to your organization’s reputation with LexisNexis® Social Analytics.
4. Share this article with your friends and colleagues on LinkedIn to continue the conversation.

6 Social Media Insights Influencing PR

It’s no secret that social media has pushed the PR industry to evolve. For many professionals, what started as a career built on sharing positive news with stakeholders and building relationships with editors and reporters has turned into managing online conversations and influencing “news on the ground” as quickly and effectively as possible.  One tweet can impact stock prices. One bad review can change the sales trajectory of a new product. How do you keep up with it all?

LexisNexis® recently teamed up with PR News to talk with its members about their social media use, favorite platforms and how social media is influencing the future of their work. We learned that in the world of PR, while some things never change, PR pros are embracing what is changing within their industry and are always on the lookout for ways to leverage social media for the benefit of their brand, its reputation, and financial performance.

In our survey, we learned a lot.  We inquired about everything from dream jobs to crisis communications planning. Members even shared some of the most outlandish requests they’ve received as a PR professional  - “Can I be featured on Oprah?” and talked about the issues that keep them up at night.  You can read more examples of outlandish/comical requests survey responders received from their stakeholder, boss or client on our recent blog article.

We’ve taken all this input and boiled it down into an infographic that focuses on the six key insights that emerged.  And here, we’re not only looking at the insights, we’re giving you practical ideas for using them.

 Check out this infographic to see all of the survey results!

 As you look at 2018 and implementing your PR plans, it’s not enough to identify insights. You have to be able to apply them to your work.  This is where choosing the right partners comes into play.  At LexisNexis, we have a range of solutions built for the specific needs of PR professionals that can help with key activities from social media monitoring and social analytics reporting to social influencer mapping and hashtag tracking. 

You can empower your teams by automating time intensive tasks so that you can focus on where you’re needed most – creating the conversations that improve reputation, bolster your brand and strengthen the financial value of your organization.

 It’s the start of a new year. Be sure that you’re making it the year that social media truly goes to work for you.

 

About the Research

The data for this infographic was taken from an October 2017 survey given by PR News to their members and taken primarily by PR professionals, with 258 respondents.

Tackling the Big Issue for Modern Marketers: Is Our Marketing Effective?

  Recently, we were pleased to sponsor the AMA Webinar, “Using Media Analytics to Determine Marketing Effectiveness.” Led by digital marketing expert Jason Burby, the Webinar focused on the common problems marketers face, how media intelligence can help and the importance of clear business goals.  [Watch the recording below if you missed it.]

The Obstacles to Optimized Marketing

Jason certainly understands the challenges that today’s marketers face. As President of the Americas at Possible, he has helped some of the world’s biggest brands overcome those obstacles, advocating the use of data analytics to inform marketing plans. The top five concerns for marketers? 

1.  Diversity of consumer expectations
2. Data overload
3. Constant change
4. Limited resources
5. Global customers

 Clearly, marketers have some BIG challenges – but the potential for gaining valuable insights into what marketing efforts are most effective at attracting, winning and retaining customers is also enormous.

How Media Intelligence Can Help Shape Your Strategies

 During the Webinar, Jason noted that understanding what’s being said in the news and media offers critical insights into brands, companies, individuals, markets or industries to help formulate and refine marketing plans. With right tools, marketers can can:

• Monitor and analyze across channels and around the globe
• Develop action plans based on insights gained from analytics and data visualization
• Share results throughout organizations to spark creativity and demonstrate marketing ROI

 Before marketers can effectively track and share media intelligence, they need to set the right parameters for what needs to be tracked. Clearly defining data needs helps to keep research focused on what’s most important. Marketers need to:

• Identify the business goals which may vary by people or department
• Outline the parameters for success and set targets
• Determine what resources are needed to gather, analyze and distribute information
• Make measurements actionable

 In the Webinar, Jason emphasized the importance of defining goals, quoting Andrew Connell, CMO at Huawei Technologies who said, “The setting of concise business goals at the beginning of an initiative often isn’t given enough time. This is really how you create your hypothesis about what you want the whole campaign to do.”   

 Yet, given the demands marketers face every day, it can be tempting to allow what is easy or readily available shape what is measured. When asked how organizations determine what to measure, respondents offered answers ranging from “No idea!” to “Basic industry standards” to “All aspects around our customers/targets.” Where would your response fall?

 3 Ways to Apply This Information Now

1. View the Webinar recording to see for yourself what Jason Burby had to say about using media analytics to inform marketing. 
2. Request a trial of LexisNexis® Newsdesk to see how a powerful media-monitoring and analytics solution can enhance your ability to find the insights needed to achieve business goals. 
3. Share your thoughts on LinkedIn to keep the dialogue going with your colleagues and contacts.

 

 

US vs International Election Media Coverage: Donald Trump is One of the Most Talked-About Americans

Which issues and candidates in the U.S. presidential election are making headlines in international media? New analysis by LexisNexis Newsdesk shows a stark contrast between U.S. media coverage and that from other nations. The analysis was performed on print, online and broadcast media coverage of the presidential election over the last 30 days in Africa, Asia, Europe and South America.

Who’s Winning in Share of Voice?

The biggest surprise in LexisNexis’s current analysis is how dramatically different share of voice, or percentage of coverage, is between U.S. and international media. Consider these facts:

• Donald Trump enjoys nearly 50 percent of all media coverage generated in the U.S., compared to 37 percent of media coverage abroad.
• Hillary Clinton and Bernie Sanders share a combined 26 percent of U.S. media coverage (14 and 12 percent, respectively) but are the only two candidates to currently enjoy double-digit share of voice besides Trump.
• Ted Cruz has captured a higher percentage of international news than domestic news, at 12 percent and 9 percent share of voice, respectively.
• Ben Carson, John Kasich and Marco Rubio have failed to capture significant media coverage in either U.S. or international media.

 A Look at the Issues

The issues have frequently taken a back seat to the personalities associated with Election 2016, but that doesn’t mean hot topics aren’t still making the news. The volume of stories about key campaign issues is another point of comparison between U.S. and international media.

• Healthcare, taxes, energy and oil, education, abortion and immigration are hot topics among both domestic and international media.
• Surprisingly, gender equality and terrorism are more frequently covered in international media than in the U.S.

Positive, Negative, Neutral

When it comes to positive, negative and neutral media coverage, U.S. media skews more neutral and positive than international media:

• 10 percent of international coverage is negative, nearly 3 percent higher than negative coverage in the U.S.
• Positive, negative and neutral coverage of individual candidates is fairly consistent among U.S. and international sources, although Republican candidates are viewed more negatively abroad than at home.

Whether in the U.S. or elsewhere, do you know how your company is being talked about globally? Media monitoring can help you to easily capture your international perception and provide some great insights along the way!

3 Ways to Apply This Information Now

1. Explore more media analysis of the election season on our U.S. Presidential Campaign Tracker.
2. Register for a free trial of LexisNexis Newsdesk™ to experience the power of media monitoring for yourself.
3. Share this blog on LinkedIn to keep the dialogue going with your colleagues and contacts.