iCOMPASS ® BUSINESS PROCESS AND COMPUTER SYSTEM TO CONSOLIDATE REGULATORY COMPLIANCE ACTIVITIES IN A COMPANY

Abstract

iCOMPASS is a business process, as well as the software application utilised in that business process, whereby a company manages a Compliance Monitoring Program, Relevant Persons Compliance, Anti-Money Laundering and Combating the Financing of Terrorism, and Foreign Account Tax Compliance Act Common Reporting Standard under the same consolidated and automated system.

Description

DescriptionTitle of Invention: iCOMPASS ® business process and computer system to consolidate regulatory compliance activities in a company Technical Field

[0001] This invention is a novel business and technological process in the technical field of financial and regulatory technology. In particular, it specialises in the provision of a centralised platform that encompasses comprehensive management of compliance related matters in a single system, including but not limited to “Know Your Customer” (“KYC”) requirements, reporting under the Foreign Account Tax Compliance Act (“FATCA”) Common Reporting Standard (“CRS”) and General Compliance Monitoring (“GCM”). This business process entails the use of the computer system created to handle all of these functions as a consolidated whole. Background Art

[0002] There are known to be various systems available to address specific areas of compliance. For instance, United States Patent No. US10628828B2 pertains to a KYC process for sanctions screening. Taiwan Patent No. TWM579784U pertains to a device for FATCA CRS reporting. However, there has yet to be a patented process for the use of a single system that encompasses all the relevant regulatory fields of KYC, FATCA CRS and GCM, which is capable not only of dealing with each of these issues separately but can process customer data for the purposes of KYC, FATCA CRS and GCM as a single coherent whole. This is unsatisfactory because financial institutions and other similar companies which have to deal with financial regulations are unable to utilise a single system to satisfy all regulatory requirements and to monitor any breach of legal compliance requirements.Summary of Invention

[0003] The following is a summary of the invention.Technical Problem

[0004] In an increasingly interconnected world driven by financial technologies and globalisation, the spotlight has been cast upon regulation for numerous companies. Particularly, financial institutions face a multitude of compliance requirements and regular reporting obligations to adhere to tax standards and regulatory mandates. This problem is especially acute in a country which is an international financial hub, such as Singapore. Due to the large volume of regulatory transactions, financial hubs like Singapore often have very strict compliance regulations to safeguard the stability andintegrity of the financial system, which are updated very frequently. While authorities have provided clarity on major issues, small and medium-sized companies struggle to keep pace with the ever-changing regulatory landscape due to the sheer volume of regulations and the rapidity of updates in the business environment.

[0005] The high cost of regulation and compliance has compelled many companies to resort to manual workflows, resulting in time-consuming and inefficient compliance processes. Although there are individual tools available in the market that address specific areas of compliance, such as KYC modules, there is a lack of a centralised platform for comprehensive management of these matters within a company. The lack of such a system creates additional costs and effort associated with complying with the relevant regulations, as well as for tracking the applicable rules and changes to the rules. Larger companies are often able to handle this overhead by making it a dedicated task for the compliance department. However, for small and mediumsized enterprises (“SME”), this creates a huge overhead necessary to keep up to date and in compliance with the rules. The essence of compliance is hence lost and it is transformed into a mere checklist of things to tick off without adequate time and resources being placed towards ensuring these rules are actually complied with. This creates a significant regulatory risk for SMEs as the perfunctory ticking of boxes may result in there being no actual compliance, which can result in severe penalties for the company should there be a breach, including criminal prosecution. In addition, the supply of experienced compliance professionals is not keeping up with the fast- paced regulatory developments and demands, not to mention the frequent job-hopping of compliance talents resulting in knowledge retention and stability issues, therefore requiring a more sustainable solution to address ongoing and long-term compliance adherence.Solution to Problem

[0006] The purpose of iCOMPASS is threefold:1 . Firstly, to centralise the regulatory activities of a company within a single platform. This entails that all persons in a company, and the relevant stakeholders from outside the company, including but not limited to consultants and auditors, who have any compliance related tasks must use the same system for all tasks, including KYC, FATCA CRS and GCM. This increases the ease of completion of the tasks as well as tracking of activities to ensure that all regulatory activities are completed and complied with.2. Secondly, iCOMPASS makes use of visual and colour-coded indicators to enhance the experience of conducting compliance related tasks, which is more effective in bringing these tasks to the attention of compliance personnel ascompared to black-and-white text based forms which are currently often used in compliance departments of SMEs. By filtering and focusing on what is truly important for the company, visual and color-coded indicators are used to simplify the overall experience, increasing the ease of understanding as well as efficiency of the process. Risk levels and areas of concerns can be quickly picked up without being missed.3. Finally, iCOMPASS is a centralised service by compliance professionals to provide the most updated content and regulatory updates. This increases the speed at which companies can ensure their processes are checked against the latest regulations and rules due to the centralized coverage and management of the various key aspects that they would have to fulfil in regulatory compliance.

[0007] iCOMPASS requires the company to adopt the following business processes, which are facilitated by using the iCOMPASS software:1. Compliance Monitoring Program (“CMP”)2. Relevant Persons Compliance (“RPC”)3. Anti-Money Laundering (“AML”) and Combating the Financing of Terrorism (“CFT”)4. Foreign Account Tax Compliance Act (“FATCA”) / Common Reporting Standard (“CRS”)CMP

[0008] The Compliance Monitoring Program is at the core of the iCOMPASS platform and provides quick and easy monitoring of the required government regulations that the company has to adhere to.

[0009] The user creates forms that follow a fixed format, which can be created within the iCOMPASS software application. Forms can be created within the app environment using the custom form function ([Fig.1]). Alternatively, the iCOMPASS software application also allows the user to create questions in the Microsoft Excel file format and upload them in bulk ([Fig.2]). A form consists of a topic, sub-topics and questions within the sub-topics ([Fig.3]).

[0010] Forms can be activated for monitoring and tracking by the user based on a predefined time frame. During this time frame, the question cards within the form will be actively monitored and refreshed based on the frequency that has been assigned to the question. This means that weekly or monthly monitoring tasks can be easily tracked and the platform will remind the user if the task has not been completed for the current period. The user must then complete the monitoring task when prompted to do so.

[0011] The iCOMPASS software application will trigger a notification in itself and send an email to the user when the task is close to its deadline or overdue. The company wouldthen be made aware of the key tasks and ongoing monitoring functions that have be completed in order to be compliant with prevailing regulations. The relevant personnel in the company must then attend to the task once notified by the iCOMPASS software application.

[0012] A dashboard in the CMP module of the iCOMPASS software application will track the completion status of items classified by each active form, or overall. It will serve as a tracker of the number of outstanding items and the user must then navigate to the outstanding item to complete it ([Fig.4]).

[0013] Question cards will take a response from the user in terms of what is done and whether the company is compliant with that specific clause or question. The company must assign users with different access levels, such as Manager or Administrator. Users with the relevant access level must review the work and mark the item as completed for the period once it has been done. When a form is active, the Level 1 User (Executives) will complete the compliance tasks and these can be reviewed by Level 2 Users (Managers). Comments can also be appended to any of the tasks for clarification or qualification in providing supporting evidence for the completion of the task ([Fig.5]).

[0014] User actions within the CMP module will be logged for an audit trail and can be used in the future for audit purposes or internal monitoring ([Fig.6]).

[0015] The iCOMPASS CMP business process as described above, which makes use of the CMP module in the iCOMPASS software application, is superior to existing manual methods due to a few key features:1. Audit trail feature that supports compliance monitoring and reliable tracking for both internal and external stakeholders (including government or government-appointed auditors)2. Multiple user access level to ensure that items are reviewed by those who are responsible for compliance monitoring and management3. Dashboard functionality to quickly monitor and track the status and performance of the compliance function4. Automated monitoring of outstanding items and reminders to ensure that company stays compliant with relation to the deadline5. Easy archival and retrieval of compliance documents within a single platform6. Easy addition / removal of compliance tasks to capture updates / changes to regulatory requirements in an ever-evolving regulatory environmentRPC

[0016] The user would use the RPC module to streamline and automate the process of completing annual compliance forms for companies. This increases the reliability of the process as well as reduces the time spent on the matter.

[0017] The user must specify the list of employees or people who would be required to complete the declaration in the current period. This will automatically trigger an email to be sent to an email address specified by the user, for them to complete an online form that contains the declaration form ([Fig.7]).

[0018] Upon completion of the form, the filled-up details will be emailed to the employee for retention purposes and the iCOMPASS software application will also store a copy of the output for further review and assessment.

[0019] All information stored will be archived with an audit trail and can be exported for future use. The progress of the form will also be intuitively displayed through a traffic light format, with status labels representing their current stage of completion. This increases the sense of urgency pertaining to the incomplete task and provides an immediate understanding of the status of the item with regards to the deadline ([Fig.8]).

[0020] A dashboard in the iCOMPASS software application will track the status of all of the required forms so that the management of the company will be able to easily track and monitor the progress. Based on a predefined deadline by the user, it will also trigger notifications for late items and also send reminder emails to prompt the employee to complete the form on time ([Fig.9]).AML / CFT

[0021] The AML / CFT module provides the functionality for the company to conduct KYC procedures within the application environment that integrates the steps of information collection, screening, risk assessment, follow up and ongoing monitoring.

[0022] The user must define a customer list on which the mentioned KYC services are to be conducted. This allows for batch creation of line items through bulk upload functions to increase the ease of use by the user of the platform ([Fig.10]).

[0023] The creation of the customer list automatically triggers an email to be sent by the iCOMPASS software application to the customer who has been selected for the KYC process. A hyperlink that contains a form that includes a preliminary set of questions and required information collection steps will be sent to the customer ([Fig.l 1]).

[0024] Information that is collected will be archived within the iCOMPASS database and a copy of the completed form will also be sent to the customer for retention purposes.

[0025] All information stored will be archived with an audit trail and can be exported for future use. The progress of the form will also be intuitively displayed through a traffic light format with status labels representing their current stage of completion. Thisincreases the sense of urgency pertaining to the incomplete task and provides an immediate understanding of the status of the item with regards to the deadline.[0026 J A dashboard within the iCOMPASS software application will track the status of all of the outstanding KYC assessments so that the management of the company will be able to easily track and monitor the progress. Based on a predefined deadline by the user, it will also trigger notifications for late items and send reminder emails to prompt the customer to complete the form on time ([Fig.12]).

[0027] After the initial information collection process, the user of the iCOMPASS software application will be able to proceed with the screening of the customer. This screening is automatically conducted with information that is completed by the customer through the forms. The databases are integrated with the iCOMPASS input and would store the output of the database query and present it to the user of the platform in an easy- to-read manner. The user of the platform will then be able to assess if there are any matches to the database, for instance, if the customer is on the sanctions list, is a politically exposed person, or a high risk individual. The user must then determine whether the customer is a higher risk client that needs further checks or will be rejected as a customer ([Fig.13]).

[0028] After further risk assessment of the customer is done, the user will be able to determine whether or not to accept the customer based on the information that has been collected. This is based on the internal risk assessment template of the iCOMPASS software application that streamlines the process of risk assessment and provides a cautious and skeptical approach towards risk ratings. This feature allows consistency in the risk assessment process as different users (i.e. risk assessors) follow the same set of risk parameters. This is intuitive for the users as the risk assessment framework is mapped to the regulatory notices and guidelines that they are required to comply with.

[0029] If additional information is required from the customer, the user of the iCOMPASS platform will be able to trigger a subsequent information request email so that the customer will be able to furnish additional information or documents as required. The same process as set out in paragraphs 22 - 24 herein will take place for this additional information request.

[0030] After all the required steps for the KYC process are completed, the users of the platform will then be able to approve or reject the customer, closing off the initial KYC process. Based on the risk level that was previously determined, this would also trigger the subsequent monitoring step for the company to prompt them for a refresh of the procedures at a set time based on the risk level that has been tagged to the customer.

[0031] Additionally, documents with expiry like passport and national identification cards of the customer will also be tagged for review based on their expiry date so that the company will have the most updated information of their customers, ensuring they areup to date with the customer status and remain compliant. Such tracking is automated based on the initial input of information and will trigger in-app notifications as well as reminder emails when the expiry date is close ([Fig.15J).FATCA / CRS

[0032] FATCA / CRS reporting refers to a global tax reporting regime that requires financial institutions to provide financial information of reportable individuals / entities as per these reporting regulations. The user will use the FATCA / CRS module of the iCOMPASS software application to seamlessly conduct FATCA / CRS reporting on its list of customers.

[0033] The user must specify the list of accounts / customers that will require the FATCA / CRS reportability assessment to be done. The customer list can be added and updated using the bulk upload function which allows the user to upload a spreadsheet in Microsoft Excel format ([Fig.16]).

[0034] This will add the customer and generate an automatic information request email that will prompt the customer to undertake initial information provision (including their personal / entity details and tax residency statuses) for the reporting process to begin.

[0035] The customer will provide the information through a unique and secure portal via the link that is sent to them via email. The responses will be recorded and a copy will be emailed back to them for reference and retention.

[0036] With the recorded information in iCOMPASS, reportability assessment logic will be triggered as part of the FATCA / CRS reporting process and the assessment results will be provided to the user of the iCOMPASS software application. Once the reportability assessment i completed, the users can then proceed with filling in of accounts and balances for financial accounts that need to be reported ([Fig.17]).

[0037] Next, the user will be able to generate a submission in Extensible Markup Language (“XML”) format, based on the XML Schema of the relevant tax authority, required for the reportable accounts. For customers in Singapore, this can be submitted directly via the Inland Revenue Authority of Singapore portal as required ([Fig.18]).

[0038] The progress of the form will also be intuitively displayed through a traffic light format with status labels representing their current stage of completion. This increases the sense of urgency pertaining to the incomplete task and provides an immediate understanding of the status of the item with regards to the deadline ([Fig.18]).

[0039] A dashboard in the iCOMPASS software application will track the status of all of the outstanding FATCA / CRS assessments so that the management of the company will be able to easily track and monitor the progress. Based on a predefined deadline by the user, it will also trigger notifications for late items and reminder emails to prompt users to complete the task on time ([Fig.18]).Advantageous Effects of Invention

[0040] iCOMPASS aims to bridge the gap in compliance by offering a centralized platform that encompasses a wide range of compliance services, including KYC, FATCA CRS reporting and GCM. iCOMPASS is not only a software application but also the business process which is facilitated by that application, namely, a method of performing all compliance related tasks such that all compliance-related information is centralised in a single information store.

[0041] iCOMPASS provides flexibility, allowing companies to tailor the platform to their specific monitoring requirements. By integrating automation tools and implementing streamlined workflows, iCOMPASS minimizes the need for extensive human involvement in manual and repetitive tasks. This significantly enhances the efficiency of compliance monitoring, reducing both time and costs associated with compliance for smaller and medium- sized companies that lack a comprehensive compliance department due to their size and complexity.

[0042] The invention aptly addresses the shortage and high external mobility of experienced compliance professionals to help companies of all sizes to keep up with the fast- paced regulatory developments and demands. The many smaller and medium- sized companies will be more equipped by technology to address their business risks and ensure both ongoing and long-term compliance adherence in a sustainable manner. Brief Description of Drawings

[0043] [Fig.1] : CMP Form Creation page

[0044] [Fig.2] : CMP Excel Template Example

[0045] [Fig .3] : CMP Active Form

[0046] [Fig.4]: Sample Dashboard View - CMP

[0047] [Fig.5]: CMP Comments Addition

[0048] [Fig.6]: Notification Panel

[0049] [Fig.7] : KYC / AML User Panel

[0050] [Fig.8] : KYC / AML Approval Screen

[0051] [Fig.9]: Sample Dashboard View - Fit and Proper

[0052] [Fig.10]: KYC / AML Form Creation Screen

[0053] [Fig.llJ: KYC / AML Individual Form

[0054] [Fig.12J: Sample Dashboard View - KYC / AML

[0055] [Fig.13]: KYC / AML Risk Assessment Screen

[0056] [Fig.14]: KYC / AML Acceptance Screen

[0057] [Fig.15]: KYC / AML Document Expiry Tracker

[0058] [Fig.16]: FATCA / CRS Item Creation Screen

[0059] [Fig.17]: FATCA / CRS Account Information Updating

[0060] [Fig.18]: FATCA / CRS User PanelIndustrial Applicability

[0061] The various modules within the iCOMPASS software application are a bundle offering that can enable all the important compliance related work to be completed and tracked within the same portal. This ensures centralisation of resources as well as ease of tracking for the company. The user would follow the business processes described herein to make maximal use of the functionality of the iCOMPASS software application.

[0062] Existing solutions in the industry, such as AML software applications and business processes, often do not support a straight-through processing of compliance-related procedures in that identification, verification, screening, risk assessment and ongoing monitoring are often done on different platforms / systems. iCOMPASS aims to bring together all the regulatory compliance processes of a company under the same system to streamline the entire procedure for customer onboarding.Citation List

[0063] The citation list is as follows.Patent Literature

[0064] Systems and methods for sanction screening, United States Patent No. US10628828B2

[0065] Common Reporting Standard (CRS) device, Taiwan Patent No. TWM579784U

Claims

Claims

1. A Compliance Monitoring Program system in a software application which allows for quick and easy monitoring of the required government regulations that a company has to adhere to.

2. A business process for a Compliance Monitoring Program which uses the computer system as claimed in Claim 1, in which the user uses an automated process to create and complete forms using that computer system.[Claim 3J A Relevant Persons Compliance system to streamline and automate the process of completing annual compliance forms for companies and uses “traffic lights” on a dashboard to show the status of progress.

4. A business process for Relevant Persons Compliance which uses the computer system as claimed in Claim 3, in which the user creates and updates a list of employees and automatically generates forms using that computer system.

5. An Anti-Money Laundering system in a software application with straight-through processing of compliance -related procedures including identification, verification, screening, risk assessment and ongoing monitoring, which allows a company to track compliance with Anti-Money Laundering regulations.

6. A business process for Anti-Money Laundering which uses the computer system as claimed in Claim 5, in which the user creates a customer list and performs Know Your Customer Assessments using that computer system.

7. A Foreign Account Tax Compliance Act Common ReportingStandard system in a software application which allows for automated reporting and compliance under the Foreign Account Tax Compliance Act Common Reporting Standard.

8. A business process for Foreign Account Tax Compliance ActCommon Reporting Standard which uses the computer system as claimed in Claim 7, in which the user creates a customer list, generates automated information requests and automatically generates a Foreign Account Tax Compliance Act Common Reporting Standard in Extensible Markup Language format.

9. A software application that consolidates the computer systems inClaims 1, 3, 5 and 7 such that all of these functions are dealt with in the same software application.

10. A business process that consolidates the business processes inClaims 2, 4, 6 and 8, using the computer system in Claim 9, such that all of these functions are dealt with in the same business process.

11. A software application in Claims 1, 3, 5, 7 and 9 which provides an audit trail which can be archived and / or exported for audit purposes or internal monitoring.

12. A business process in Claims 2, 4, 6, 8 and 10, using the computer system in Claims 9 and 11, which provides an audit trail which can be archived and / or exported for audit purposes or internal monitoring.

Images