Gemba Heightens Focus on Compliance Excellence

The fast-growing company is taking proactive measures drawing on a global risk analysis prepared by Orrick

London, UK – In an increasingly complex global financial landscape, effectively combating financial crime requires a proactive, multi-faceted approach. Gemba, a UK-incorporated FCA-authorised payments firm with operations spanning the UK, US and EU, exemplifies this approach.  Most recently, the notable international law firm Orrick, Herrington & Sutcliffe analysed the measures that Gemba has implemented to counter financial crime as part of its commitment to maintaining the highest standards of compliance across its global operations. A detailed analysis prepared by the experts from the UK, US, and EU offices evaluates the sanctions- and Anti Money Laundering-related risks that Gemba encounters in applying its compliance framework in the context of its potential growth. 

Understanding Gemba’s Operational Landscape and Risk Exposure

Gemba’s global operations has been a key driver of its success, but it also places the company under a complex web of Anti Money Laundering and sanctions regulations across various jurisdictions. Orrick highlighted that some of these areas are considered sensitive to potential risks, underscoring the challenges Gemba faces.

In response to these regulatory demands, Gemba has taken a proactive stance on compliance. Far from viewing these regulations as mere hurdles, the company sees them as a critical part of its operational framework. By embedding stringent compliance measures into its processes, Gemba not only adheres to regulatory requirements but also strengthens its overall business integrity and resilience in a diverse and demanding global landscape.

1. Building a Foundation of Risk Awareness and Due Diligence:

The bedrock of Gemba’s compliance framework is a thorough and ongoing risk assessment process. This process goes beyond a perfunctory tick-box exercise. Gemba invests significant resources in understanding its clients, their industries, and the jurisdictions in which they operate. This process, particularly critical in the context of Gemba’s potential engagements with riskier profiles entities such as financial holding companies, forms the basis for a tailored and comprehensive risk mitigation strategy.

Integral to this risk-based approach is a stringent Customer Due Diligence (CDD) program. Gemba goes beyond basic identity verification, employing effective measures to understand the source of funds, scrutinising the beneficial ownership of corporate structures, and leveraging sophisticated data analytics to identify potentially more vulnerable customers. This commitment to “knowing your customer” is paramount in preventing financial crime and forms a cornerstone of Gemba’s compliance efforts.

2. Navigating the Labyrinth of International Sanctions:

The global reach of sanctions regimes, particularly those imposed by the UK, EU and US, presents a significant challenge for financial institutions. Given the serious implications of non-compliance, Gemba has implemented a thorough, multi-layered sanctions compliance strategy. 

This approach begins with a comprehensive sanctions screening program. Gemba utilises sophisticated software solutions to screen all customers and transactions against relevant sanctions lists, ensuring that it is not inadvertently engaging with sanctioned entities or individuals. This proactive screening, analysed among other things highlighted by Orrick, is especially crucial in light of potential relationships with entities operating in prone jurisdictions, such as those associated with financial holding companies.

Gemba’s commitment to sanctions compliance extends beyond reactive measures. The company has implemented ongoing monitoring processes to stay abreast of updates and changes in sanctions designations. This ensures that Gemba’s compliance program remains agile and responsive to the evolving sanctions landscape, minimising the risk of inadvertently engaging in prohibited activities.

3. A Proactive Stance on Transaction Monitoring and Reporting:

Gemba’s commitment to compliance goes beyond onboarding customers. Recognizing that financial crime is a dynamic threat, Gemba has strategically invested in sophisticated transaction monitoring systems, which are essential for managing the complex risks associated with potentially challenging clients and jurisdictions. These systems leverage advanced data analytics and machine learning algorithms to analyse transaction patterns, identify anomalies, and flag potentially suspicious activities in real-time.

This proactive approach allows Gemba to detect and investigate potentially illicit activities swiftly, minimising potential financial losses and mitigating reputational damage. Furthermore, Gemba has established solid internal procedures for reporting suspicious activities to relevant authorities. The company’s commitment to transparency and cooperation with law enforcement agencies is exemplified by its meticulous adherence to Suspicious Activity Report (SAR) filing requirements, ensuring that any potential instances of financial crime are brought to the attention of the appropriate authorities.

4. Cultivating a Culture of Compliance through Employee Empowerment:

Orrick mentions the importance of maintaining a strong compliance culture, recognizing that a well-designed framework is only as effective as the people implementing it. Gemba has prioritised building a culture of compliance by investing in comprehensive training programs for all employees. These programs go beyond simply outlining policies and procedures, instead focusing on fostering a deep understanding of the rationale behind Anti Money Laundering and sanctions regulations.

Employees are trained to identify red flags, understand their reporting obligations, and feel empowered to raise concerns without fear of reprisal. This focus on education and empowerment ensures that Gemba’s compliance framework is not simply a top-down directive, but rather a shared responsibility embedded in the company’s DNA.

5. Embracing Cross-Border Cooperation and Information Sharing:

In an interconnected world, combating financial crime requires a collaborative approach. Gemba recognizes the importance of information sharing and maintains open lines of communication with regulators and law enforcement agencies in all jurisdictions where it operates. This commitment to transparency and collaboration facilitates the timely exchange of information, enabling a coordinated response to emerging financial crime threats.

Gemba: A Strong Focus on Compliance in Finance

Orrick highlights Gemba’s commitment to mitigating financial crime risks through the thoroughness of its compliance efforts, particularly in the context of potential engagements with high-value entities. By adopting a proactive and holistic approach to Anti Money Laundering and sanctions compliance, Gemba’s robust compliance framework, coupled with its cautious approach to elevated-risk partnerships, positions it as a leader in the fight against financial crime.

Gemba’s story serves as a potent reminder that compliance is not merely a regulatory hurdle, but rather a business imperative. By embedding a culture of compliance within its operations, Gemba has not only mitigated its own risk exposure but has also contributed to the global effort to combat financial crime. As the regulatory landscape continues to evolve, Gemba’s commitment to compliance will undoubtedly serve as a model for others in the financial services industry.