Did You Cry Wolf?


You:                          Help!! Help!! I see a wolf in the distance!!

Mediator:                 I am here to help. What is your name and what is your location?

You:                           No that’s private information I am not comfortable disclosing!

You:                          Help! Help!! A wolf is chasing me!!

Mediator:                 I wish to help. What is your name and what is your location?

You:                          No that’s private information I will not share that information!

You:                           Help! HELP! I can’t leave my house I can’t operate my business!  I won’t be able                to maintain my home, or feed my family!  The wolf is prowling outside my home, outside my business!


Over the last several months I have shared countless news articles on the De-risking and De-Marketing practices global Banks are conducting to a very specific market industry; MSB’s, MTO’s, E-Money, Remittance Businesses, Online Payment Processors and Third Party Payment Processors. Businesses are being crippled, some have thrown in the towel, given up the fight and closed shop. Not only have they lost their livelihood but the numbers are significant enough that it has been foreseen to negatively impact the global economy. Some have chosen to continue to fight but find not so “compliant” means to keep their businesses running. And while from a staunch compliance position the option of creativity is frowned upon, the de-risking and de-marketing banking practices are feeding this creativity. This is creating an environment of pushing businesses to utilise “underground” or “covert “practices in order to process the volume of transactional money flow. The money flow is the most important aspect of these businesses, for it is the money supply and demand business model that keeps their businesses afloat, provides the needed service and becomes a important factor in our global economic growth.

Here in Canada, the Money Service Business industry, including all those that fall under this industry sector, formed an association; The Canadian MSB Association. The mandate of the Canadian MSB Association, is to bring about structure, compliance adherence, provide training and information conferences. In turn the hope is it will change the opinions of the industry’s banking partners and regulators. The association wants them to know that their concerns are being taken seriously and the industry is prepared to hold itself accountable to doing business within a regulatory frame-work.

Globally there are many other association like ours here in Canada. When the news of banks taking steps to de-risk and de-market our fellow colleagues internationally, the Canadian MSB Association along with our fellow colleagues and our fellow associations took action., As there is strength in numbers we joined forces. We opened discussions, we sent letters and our voice was heard in front of the Deputy Minister of Finance here in Canada. Eventually the World Bank got wind of the issue and the call to action began.

Do each and every one of you who are either directly or indirectly affected by this global de-risking and de-marketing issue understand what we collectively were able to do? Let me repeat! We joined forces with our fellow colleagues, our fellow industry associations, we opened discussions, we sent letters and we had our voices heard and then….. and THEN…. The WORLD BANK took note!

Let that fact sink in for a moment and appreciate the value statement this makes. When a united force comes together to bring about change, change can happen but the unification of our industry was only half of the required action needed to bring about change. The battle was only half won. This collective action we took cannot stand still. The World Bank took note, and then they took action. They created a Survey and asked us to respond to the Survey in order to assist them in bringing the proof required of our experiences, of the unfair de-risking and de-marketing practices the global banks are taking.

In some ways the World Bank can be considered a mediator. They bring to the global banking and finance decision makers the world’s economic concerns. They hold regular annual meetings where they discuss and make decisions on global concerns, including the world economic outlook, poverty eradication, economic development and aid effectiveness. The mandate of the World Bank is to end extreme poverty by decreasing the percentage of people living on less than $1.25 a day to no more than 3%. Additionally, they promote shared prosperity by fostering the income growth of the bottom 40% for every country.

These underprivileged individuals along with third world countries and under-banked countries rely on the global presence of Money Service Businesses, Remittance Services, E-Money, Money Transmitters and Third Party Payment Providers as a means to receive money from family and to buy goods and services they otherwise would not have access to. This industry fulfills a cost efficient need that the big banks simply cannot fulfill.

Finally our voices were heard. We are fighting for our right to exist along side the big global banks, our right to a livelihood, to provide services to those countries and individuals in need and we are part of the cause and effect solution.

The World Bank took us seriously. They launched a survey in order to collect the needed data to provide to World Government Officials, decision makers of the global financial ecosystem. The data is needed to provide accurate statistical information so a complete picture can be seen. Only once the data is collected, reviewed and analyzed can the confirmation of our struggles, the unfair treatment and the misunderstood business practices be confirmed.

The World Bank reached out to those of us they saw as activists for the industry or those individuals that were directly or indirectly involved in changing the perception of the industry. The World Bank was looking for our assistance in communicating the Survey to the Industry. Collectively many of us used whatever means we could to communicate to all of you, the news of the Survey and how to access the Survey. Using email blasts, discussion groups, training webinars, committee conference calls, tweets and throughout most social media networks, we worked to spread the word of the World Bank Survey to industry counterparts, colleagues and fellow associations.

However the feedback from the World Bank is that the response from the industry was pitiful. Too few industry members responded and the data is incomplete. The common whisperings heard as to why members of this industry did not respond to the survey? It is believed that it is our position on not wanting to share information, our wanting to remain anonymous, and our lack of trust of the process.

In hearing this feedback from the World Bank it made me think of the boy who called Wolf.

Have we as an industry cried Wolf? Did we bring the decision makers and law-makers to our doorstep ready to listen, ready to show a willingness to work with our Industry and understand our business only to not follow through with the needed information that a “wolf” actually exists? By responding to the survey it would provide us the opportunity to show them the steps we have taken collectively as an industry, to unite and create a culture of compliance with the objective to not only blindly follow the rules but to safeguard our financial banking systems. This kind of opportunity does not come around often to an industry in need. We missed their first attempt to help us by collecting the information needed when requested. This kind of opportunity does not come around a second time so as the fable of the boy who cried wolf goes; what are the chances that we will be provided a second let alone third opportunity to be heard and to bring about change. We have our second opportunity to be heard as they have extended the deadline for the collection of this information. In the fable of the boy that cried wolf, help is attempted twice before his cries are no longer answered. Let’s use this opportunity or stop-crying wolf!

The de-risking and de-marketing issues are real. They are happening. You know it, I know it and all of us in this industry know it. It is unfortunate that the bureaucratic way to change is to have to prove ones case. Nothing can ever be hearsay. We must prove our case not just give lip service. Lip service is easy and holds little accountability and responsibility. Taking action means seeing the process through to the end and being accountable, and being responsible. The game changers are ready to be engaged. Having your voice heard is an incredible accomplishment – and a shame to let it be wasted and more so for all of us who desperately need change to happen. I am hopeful that it is not too late; the survey is still available online at : https://remittanceprices.worldbank.org/en/survey-on-de-risking

Please lets not simply cry wolf and take no further action. This initiative is a collective one and we need each and every one of you to act. The next step is to provide the information needed to guide those that can help us, to what needs to happen next for this industry to move forward!

Red Pill or Blue Pill – Which Consultant to use?

red pill blue pill

Anyone who has seen the Matrix knows the story. “You take the blue pill, the story ends. You wake up in your bed and believe whatever you want to believe. You take the red pill, you stay in wonderland, and I show you how deep the rabbit hole goes.”

So how does this relate to picking a consultant for compliance? There are the consultants that will take your money, hand you the blue pill and give you a package of pre-done AML manuals and/or KYC policy and procedures, RISK assessments and RISK policies (I know… Scary words) and send you on your merry way. Now, some companies with no knowledge or understanding of compliance will think great, I’m set and ready to take on the regulators and banks!

But honestly kittens (to quote the great Dame Edna) it just doesn’t work that way.   Taking the red pill will be painful and the rabbit hole can feel never ending, but it will also be educational, enlightening and take you down the path of true compliance.

Many people think compliance is its own little entity within a business. Working alone in its cubicles (where’s my stapler… I’m starting to see I am entertained far too much) reviewing documents, writing documents, spreadsheets and papers everywhere across a desk. Oh yes and those key words you hear as you pass the cubicles, policies… procedures… risk mitigation, risk assessment… risk, risk risk! Aren’t they “those people” that pop their head up when regulators or law enforcement show up at the door? Sound familiar?

But really good compliance, the compliance that the regulators and banks want to see, the compliance you want to put in place, is the compliance that touches all operations within a business and that is integrated into all of your operations. Compliance should be involved in all business decisions from sales and customer service to banking and all the executive decisions that your operation requires. Everyone in a business that utilizes a compliance department is key to the success of any compliance program. This means input and buy in from every department, and a directive from the top down because if the top level of decisions makers do not get it how will the foot soldiers get it?

This means tailor making every compliance policy and procedure and AML manual to incorporate all aspects of your business. This takes time and this takes knowledge and experience. While finding the text book smart consultant that can rattle the regulations off from memory is one way to go; choosing a “good consultant” goes beyond reciting the regulations and uses their skills on how to adapt those regulations, to interpret those regulations and integrate those regulations into your business. Compliance can be difficult and can appear to be black and white, the good consultant will find ways to work with you so that you follow the regulations and still conduct a profitable business.

A good consultant will not simply have the knowledge and understanding of the regulatory requirements and how to implement them into your day-to-day business but will have a much broader experience in business processes as a whole. Compliance and your business as a whole are co-dependent and your policies and procedures cannot be created in a bubble.

When you are looking to hire a consultant, find out if the consultant is going to really understand your business and be a partner to your business. Or will they just sell you what they can, having you skim over the fine print, hand you the blue pill cure all and walk out of your life having you fend for yourselves.

Sentinence hands out the red pill. We take the ride with you down the rabbit hole and come out on the other side, ahead of your competitors and compliant.


The Un-Bankables


The Un-bankables, the legitimate businesses that are deemed high risk and are unable to obtain a banking relationship.  There are hundreds of articles about the perceived risk MSB’s, virtual currencies, and legal marijuana dispensaries pose to our banking system.  There are whispers that our government potentially will get involved and force the banks to bank these business lines that have been too easily labelled as high risk businesses however the question lies at what cost? The banks will simply charge ridiculous fees making it almost impossible for these businesses to make their profit margins to be considered viable.

What we haven’t seen anyone write about is why? And don’t say, it’s because they are higher risk or more prone to money laundering. That is not really answering the question. What is the criteria used to label them high risk? Are all these businesses white stroked as “High Risk” without even a review to actually evaluate whether this perception is correct or not? How can a bank look at these businesses, and in the cases of MSB’s and Virtual Currencies, verify they are operating a compliance enforced risk-based approached business?

Business plans and policies and procedures can say all the right words and look like they are on the ball, but how does the bank really know they are running their business the way their manuals and documented policies and procedures say they are?   The cost and work involved for the bank to arrange audits to be performed on a business that is so different from their own, seems in the eyes of the bank, too difficult and costly to justify. Even the audits performed by legitimate audit firms at the companies expense are not deemed as acceptable proof they are running a legitimate business.

The only regulators that are really looking at these businesses’ is from an AML perspective. Those AML – CTF questions are the easy ones to answer; Are you comparing your clients to sanctions list? Do you know your client? Are you reporting the transactions you should be reporting to your respective regulator? Are you submitting STR or SARS?

The recent statistical information from the Regulators states an abounding YES. Percentage numbers on all those questions are on average in excess of 80% or better. These results far surpass most other business lines in the Financial Services Industry.

But it is far more than that. Those regulators concentrating on AML and CTF awareness and Policies and Procedures come knocking maybe once every 2 years. But what happens in between. Technically, some of these businesses are running a trust account, or “client money” accounts and who is regulating them to ensure that client monies are separated from operational funds, that the trust and/or client money holding accounts are balanced and reconciled, daily? Weekly? Monthly? And what about the interest these accounts earn? In the investment world the dealer cannot keep the interest earned in a trust account. They must choose to either pay it to the fund companies where the investments are held on a pro rated basis or to return these pennies to the clients. Anyone from the Investment world will tell you, this alone is an accounting nightmare for sure.

It’s no wonder the banks are not taking the time to know if these businesses are operating ethically, the areas for corruption of bountiful and for them it makes sense to paint them all with the same brush.   And if you are ultimately liable and you see the financial and criminal penalties that could be put upon you for aiding criminal or terrorist activity would you not do the same thing?

For the banks to take MSB’s and virtual currency organizations seriously, these groups need to band together and create their own SRO (Self Regulatory Body). With this they can go through regular audits by people who understand their business and be accountable to the same and to their peers. When the banks see that these organizations are taking compliance seriously they have to start taking these organizations seriously.

Until a real self-regulatory organization is in place to challenge the banks broad stroke of perceived risk what are you doing to ensure you are completely compliant? What are you doing to have your voice heard?

Take your business seriously and call us to ensure you are on track for compliance.

Sentinence – MB


Just A little bit of Arrogance


As Sentinence comes to its one year Anniversary we can say that what we believed to be true has been confirmed. So what did we believe?

Firstly, we believed that there was a need within the financial services market space for Sentinence to exist. Actually, we believed not only was there a need for us to exist but that we could make a difference and that we would stand out.

Making a difference is really why businesses are created after all. The differences we believe we can make within our operating space are many. First, the length of time both Marlies and I have been within the Financial Services Industry both individually and collectively far surpasses most of our competitors. While Sentinence is only a year old, Marlies and I have a network and client exposure that spans collectively over 50 years. We have been involved in more sit downs with regulators, more involvement with technology partners aligning regulatory compliance requirements while still being able to automate day to day functionality and most importantly, we have been involved in more “change” being adapted across a multitude of business lines and technology platforms. We are known within this industry as the ones that think and conduct business outside of the box.

Secondly, our philosophy on what Consulting services really mean and our approach with our clients, we believe is very different than our competitors in the Financial Services space. We believe in offering more than simple piece meal project based work or pre-packaged template solutions. We can approach client’s mandates in that manner if that is their wish but it is not our preferred methodology.

Rather, our approach is more about building and engaging in long term relationships where the value for money is as important as the relationships we aim to build. We choose to be team players and take on much more of a Mentoring role with each of our clients. Educating and the transferring of knowledge, having open and candid discussions regarding the interpretations and nuances of the regulations and responsibilities, all within the Financial Services space are governed by, is how we at Sentinence engage with our clients.

Let us learn with you because with every new client who comes to us for assistance, we have learned that they do business just a little bit different then the client before them and so the “learning and transferring of knowledge” is a reciprocal thing and that fact is what strengthens our relationships.

So yes, sometimes a little bit of arrogance can be a good thing. We belong in this space because we will make a difference and we will stand out.

Why not give us a call and make your own assessment.

Sentinence – AC