Auckland-based Compliance Refinery has switched on a new anti money-laundering (AML) service to bring one of the most-hated regulatory tasks into the artificial intelligence age for NZ financial advisers.
The AI-powered Compliance Refinery AML audit system “significantly cuts down the time and expense involved in conducting reviews”, the group says in a release, in an efficiency upgrade that comes with cost savings for its clients.
Founded in 2018 by Steven Burgess, the specialist financial advisory compliance firm has carried out “internal and external testing” to show the AI overlay can produce “audits of equal or higher quality” than traditional processes.
Burgess said the model is trained on NZ-specific data but also “has the ability to pull in international best practice’.
“It actually provides a more sophisticated analysis, it is more nuanced,” he said.
The new service also has privacy guardrails to ensure client data remains secure as well as in-house and third-party governance layers to “ensure the quality of the audit is maintained”.
“At Compliance Refinery it is important that we innovate and improve our ways of doing business,” the release says. “The world is changing around us and we need to change as well.”
Currently, AML compliance for financial advice provider (FAP) is overseen by the Financial Markets Authority (FMA) but those responsibilities are slated to shift to the Department of Internal Affairs under a plan unveiled by former Commerce Minister, Andrew Bayly, last year.
FAPs were rated as a ‘medium-to-low’ AML risk in the 2021 FMA analysis of the various sectors under its purview. The regulator left its AML sector risk-o-meter unchanged from a 2017 report that found only derivative issuers and crypto-platforms as high-risk entities.
However, the FMA has formally pinged about a dozen firms for AML breaches.
Also this month, personal finance platform, SortMe, released a new financial adviser ‘portal’ in collaboration with local open-banking firm, Akahu.
The new SortMe tool taps into the Akahu technology allowing advisers “secure access” to client bank transaction data to enable real-time analysis of spending trends.
According to a release, the automated system also prompts advisers review client needs at key points such as mortgage rollovers or employment changes.
The “portal enables advisors to build stronger client relationships, spend more time delivering value to customers by reducing time spent on administrative tasks”, the statement says.
About a dozen financial advisory firms have signed up for the service to date.
Founded in 2022, SortMe, offers a range of personal financial tools in an app including budgeting, subscription management and net worth analysis.
The slightly older (2020 vintage) Akahu has championed the NZ open-banking cause with a service that helps connects a number of apps to banks, KiwiSaver schemes and other financial service providers.