GlowByte helped Tinkoff Bank implement the SAS AML solution to implement FATCA and CRS compliance

2020: Completion of the implementation of the system for identification of foreign tax residents

On December 10, 2020, it became known that in early 2020, Tinkoff and GlowByte LLC completed a project to introduce a system to identify foreign tax residents, as well as US tax residents based on the SAS AML solution .

Tinkoff Bank. Photo: finews.org.

As explained, the reason for the launch of the project was the entry into force in 2014 of the US law on the taxation of foreign accounts (hereinafter - FATCA - Foreign Account Tax Compliance Act), according to which Russian and other banks must report to the US tax service (hereinafter - IRS -Internal Revenue Service) about the income of American citizens in other countries.

In 2017, CRS (Common Reporting Standard) requirements came into force - an international analogue of FATCA - aimed at preventing tax evasion around the world.

As of December 2020, more than 100 countries have joined the international exchange of financial information. In 2018, one of them became the Russian Federation, ratifying the CRS agreement.

Prior to the implementation of the system, the process of identifying foreign tax residents was carried out manually through reports built above the CRM system, which took time from compliance officers and was accompanied by the likelihood of errors under the influence of the human factor.

The determining arguments in favor of transferring processes to automatic mode were the growing base of bank customers every year and the provision of reports is already mandatory. As a result, in the fall of 2019, the implementation project started.

At the time of implementation of FATCA and CRS modules, the bank was already operating a system developed by the GlowByte forces to counter income legalization based on SAS AML. Therefore, the choice of software for the task of identifying foreign taxpayers was in favor of the FATCA and CRS module.

With GlowByte and SAS, we have been working successfully on AML/AML for a long time, so it was good news for us that with the help of additional modules of the SAS AML system we can optimize our processes on FATCA and CRS. noticed Galina Kuznetsova, head of the compliance department, deputy director of the legal department Tinkoff

As a result of the project, Tinkoff has a tool that allows employees to quickly identify foreign tax residents and assign them the appropriate FATCA and CRS statuses, as well as automatically generate reporting for tax authorities.

For example, as of December 2020, we can say that the quality of detection of foreign tax non-residents has increased by 1.5 times (or 50 percent), and the time for generating reports has decreased by 5 times (or up to 8 hours/1 day instead of a working week).

The built system based on SAS AML covers the entire FATCA and CRS compliance process and implies:

• Automation of KYC (Know Your Customer) procedures for identifying accountable customers;
• investigation for each client: request for necessary documents;
• Setting FATCA and CRS statuses
• Automatic annual document request for FATCA customer failures
• automatic preparation of all required reports for regulators - FTS and IRS.

Since 2020, all issues of interaction with foreign tax residents have been resolved automatically and in accordance with the latest regulatory requirements.

I really like how we are building interaction with colleagues from Tinkoff Bank: since past projects, employees of the GlowByte and the bank have been working in the same team from the very beginning. So in the case of the implementation of FATCA and CRS modules, my colleagues and I immediately jointly developed optimal implementation paths, and when the legislative amendments to the CRS formats came out, we understood their application in the system together. noted Nikita Kolganov, head of AML/FT GlowByte

To implement, we needed a strong player who was not afraid to accept the challenge and become a pioneer. Not surprisingly, Tinkoff, our longtime friend and business partner, became this player. I'm glad we went all the way together. As of December 2020, the bank has a tool that allows it to fulfill international obligations at the proper level, and the company GlowByte has another applied solution in the portfolio. commented on Natalia Popova, project manager for the implementation of the company GlowByte

2016: Creation of a system to counteract the legalization of proceeds of crime

On March 22, 2016, GlowByte Consulting and SAS Russia/CIS announced a project to create a system to counter the legalization of proceeds from crime and the financing of terrorism (AML/AML, Anti-Money Laundering, AML) for Tinkoff Bank.

Project tasks

Tinkoff Bank in August 2015 announced the start of work with legal entities. Work with this segment required other approaches to comply with the requirements of federal law 115-FZ "On countering the legalization (laundering) of proceeds of crime and the financing of terrorism." Federal law obliges to apply a set of measures to identify transactions subject to mandatory control and suspicious transactions. Incomplete compliance creates sanctions risks from the regulator.

Advertising "Tinkoff Credit Systems" (2013)

The bank needed a transaction monitoring system. According to the results of the competition for the creation of the AML/FT system, Tinkoff Bank chose the solution of SAS Anti-Money Landing (AML). The argument in favor of choosing this platform was its compliance with all legal requirements in terms of AML/FT.

Project course

The implementation of the system was carried out by GlowByte Consulting. The platform was designed taking into account business growth plans. As part of the implementation of the system, specialists have created a single transaction monitoring center that provides regulated checks on consolidated data, as well as flexible change and creation of new verification scenarios.

Project result

In less than four months, the project team transferred the system to pilot operation. The AML/FT automation platform began operating in December 2015.

author = Vyacheslav Tsyganov, Vice President, Information Technology Director, Tinkoff Bank With the launch of the system into pilot operation, we immediately noticed a decrease in the labor cost of creating regulated reports and facilitating investigations. The growth of the business and the increase in the number of transactions processed will have an even more noticeable effect on the automation of many procedures that usually required manual labor. The automated AML/FT system will allow our specialists to reduce the amount of routine work and focus on intelligent analysis of suspicious schemes and operations.

author = Evgeny Lisitsin, Consulting Director, GlowByte Consulting It was an interesting, productive project. As soon as possible, a unique solution was deployed that meets the requirements of the law and is ready for significant loads. Together with SAS, we have done a lot of work to adapt and localize the product in terms of reporting. Now GlowByte Consulting has one of the best in Russia team of consultants on AML/AML solutions and unique experience in implementing SAS AML solutions.

author = Elena Kupriyanova, Head of Anti-Money Laundering, SAS Russia/CIS I would like to note the courage of Tinkoff Bank, which was not afraid to launch a whole complex of automated systems simultaneously with the launch of a new business segment. Usually, Russian banks are cautious about innovations in the field of regulatory requirements and try to close these issues with human resources. Despite the importance of these issues, not all banks have an understanding of the benefits of using automated systems. Initially, the correct process building and use of modern industrial solutions for this is an approach that guarantees success and the opportunity for business development in the future.