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Software for cleaner money

Motorists wait for the traffic lights to change in front of Canadia Bank’s Olympic branch yesterday afternoon in central Phnom Penh.
Motorists wait for the traffic lights to change in front of Canadia Bank’s Olympic branch yesterday afternoon in central Phnom Penh. Pha Lina

Software for cleaner money

Tess International, a Malaysia-based provider of software solutions for the financial sector, signed a distributor agreement yesterday with Cambodian management consulting and business technology firm IdeaLink Consulting to provide software to Cambodian banks and microfinance institutions that helps them combat financial crimes.

Chhor Sophanak, managing director of IdeaLink, said Cambodia’s booming financial and property sectors have resulted in a sharp increase in the number of financial transactions, as well as the amount of money transferred into and out of the country each year.

This creates opportunities for money laundering, where illicitly gained proceeds, or “dirty money”, are made to appear legal, typically through transactions involving offshore banks or legitimate businesses.

He said the increasing risk of financial crimes in Cambodia requires banks and microfinance institutions (MFIs) to be more careful in handling transactions, and is driving demand for professional automated solutions.

“Money laundering is coming from everywhere around the world and it’s difficult to identify its sources, so it requires caution,” he said.

Sophanak said Tess International was providing software solutions that help financial institutions implement anti-money laundering (AML) measures, protecting them from financial fraud. Through their new distribution agreement, the two companies plan to extend sales into the developing financial sectors of Laos and Myanmar as well.

“Tess International has data on blacklisted individuals with a history of involvement in money laundering activities, so when a person on that list is involved in any activity related to a financial transaction, the system will alert financial institutions so that they can follow up and check more effectively,” he explained.

He said that two major banks in Cambodia – namely Canadia Bank and Vattanac Bank – had already installed the company’s AML software on their servers. However, he declined to disclose the cost of the software, explaining that it varies from one institution to the next according to its actual operation.

Cambodia has a notoriously poor international reputation as a potential haven for money launderers and terrorism financiers. The 2016 Basel Anti-Money Laundering (AML) Index, an annual ranking by the Switzerland-based Basel Institute on Governance, named Cambodia as the worst country in ASEAN for susceptibility to money laundering and terrorism financing, and the sixth-worst globally behind Iran, Afghanistan, Tajikistan, Uganda and Guinea-Bissau.

Liew Boon Yen, CEO of Tess International, said his company has supplied financial crime solutions to financial institutions in many ASEAN countries, including Thailand, Vietnam and the Philippines, which he credited with improving their AML scores. He expressed confidence that his company’s software could help boost Cambodia’s ranking as well.

“We will share the success story of Thailand and Vietnam in fighting financial crimes,” he said. “First we have to get financial institutions to comply [with AML measures,] and then we can move to other sectors, such as insurance, remittance, leasing companies or casinos.”

Tess International’s software is one of many third-party AML solutions on the market that are helping Cambodian banks and MFIs meet their international obligations to monitor, prevent and report suspected money-laundering and terrorism financing activities.

So Phonnary, vice president of Acleda Bank, Cambodia’s largest bank by assets, said the bank recently installed AML software developed by US-based financial services technology provider Fiserv Inc. Previously, the bank used its own proprietary AML software.

“We have thousands of [financial] transactions every day so we needed expertise to develop a system for us that fights any action related to money laundering,” she said. “The automated system is very helpful for us, as it gives us detailed information for analysis.”

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