Industry Sharing Series: JP Morgan Chase & Co.
On 5 September 2016, the Faculty invited Mr Nikhil CHOGLE, Executive Director, JP Morgan Chase & Co. to share on the highly interesting and topical issue of measures taken by banks against money laundering.
In his talk, Mr Chogle took the audience through the methods used by money launderers, the stages of the money laundering cycle and the impact of money laundering on the economy and society. He gave an overview on the key regulations related to Anti-Money Laundering regulations and Combating Financing of Terrorism, and the consequences of non-compliance with these regulations.
Money laundering is the process used by criminals for cleaning illegal money through a series of transactions so that they appear to be proceeds from legal activities. The illegal money could originate from various offences such as illegal arms sales, smuggling, drug trafficking, prostitution, human trafficking, embezzlement, insider trading, bribery, computer fraud and tax evasion.
Mr Chogle went on to share his insights on the three stages of money laundering, namely: placement, the removal of proceeds from criminal activity and the insertion of illegal proceeds into the financial system; layering, the disguising of illegal proceeds from their sources by conducting layers of financial transactions; and integration, the re-entry of funds into the economy in a legitimate form.
Noting that money laundering had serious repercussions if left unchecked, Mr Chogle highlighted some of the economic and social consequences, including the rise in crime and corruption, the deterioration of financial institutions, misallocation of public sector resources and loss of tax revenue.
Given the negative impact of money laundering, it is therefore crucial for those in banking careers, such as client onboarding operations, front office, audit and control, to have knowledge of Anti-Money Laundering regulations. Such knowledge is also pertinent to higher risk industries, which include investment companies, money service-related businesses, gaming establishments and private equity funds.
Sharing on his current role, where he leads a team of specialists who perform Know-Your-Customer (KYC) reviews for customers, Mr Chogle went on to elaborate on the importance of KYC diligence in safeguarding the banking system from money laundering. KYC comprises standards that include due diligence of customers, accounts and products, transaction monitoring, and suspicious activity investigation and reporting.
Through KYC analysis and diligence, bankers could better understand customers, their use of financial products and services and their requirements as well as be alert to potential issues. These could include customers’ income levels not matching with its infrastructure, complex or opaque corporate structures, inconsistencies in account activity, portfolio churning or jurisdictional issues such as business transactions in countries with weak Anti-Money Laundering controls.
Mr Chogle has over 23 years’ experience in Corporate and Investment banking with leading American banks.
JP Morgan Chase & Co. is a global financial services company, with businesses in investment banking, commercial banking, private wealth management and asset management.
Mr Nikhil Chogle spoke to attendees on the topic of money laundering
Attendees listened intently during the sharing session