At a Glance
A financial technology company geared towards promoting financial inclusion, Domus Semo Sancus (DSS) is best known for SafetyNet, a powerful compliance as-a-service tool capable of running rapid enhanced due diligence checks on virtually any subject. Recently, the organization identified a communications bottleneck between regulators and financial services organizations. To help address this challenge, DSS turned to BlackBerry® Spark Communications Services.
The Organization
Several years ago, E. Jay Saunders noticed that the global unbanked population seemed to be stuck at 2 billion, and despite efforts by many organizations, it wasn’t dropping. As the world moves rapidly towards a cashless society, these people are being left behind. In 2014, seeking to address the issue, Saunders left his position as CEO of Digicel Turks & Caicos Islands to found Domus Semo Sancus (DSS).
“Today, the unbanked number stands at about 1.7 billion adults globally,” explains Saunders. “When you’re unbanked, it’s difficult to pull yourself out of poverty. With the world becoming cashless, an e-commerce divide is developing and it’s creating far more problems than most people realize.”
The company initially set out to create Wowlet, a pre-paid digital wallet that can be funded with cash. Saunders envisions Wowlet as a means to encourage global financial inclusion and to help bank the unbanked. There was just one problem: in order for Wowlet to be a reality, DSS would need to address the matter of regulatory compliance, particularly the requirements around Knowing Your Customer (KYC).
“After the 9/11 attacks, an inter-governmental body known as the Financial Action Task Force (FATF) was created to combat money laundering and terrorist financing,” says Saunders. “The FATF’s guidelines, which over 200 countries have agreed to support, make it very difficult to open up a bank account and engage in financial services. FATF’s KYC and anti-money laundering regulations require financial organizations to perform extensive background checks on an individual before accepting them as a client.”
In order to ensure Wowlet could meet the FATF’s KYC requirements, DSS set out to develop another solution known as SafetyNet. An AI-driven, cloud-based platform, SafetyNet is capable of performing rapid in-depth background checks on any subject-of-interest. Upon being given a search term related to an individual or organization, it searches the surface web, deep web, and dark web using a complex combination of data mining, pattern recognition, and natural language processing.
“Within a few seconds, SafetyNet can pull together most of the information that’s in the public domain about a subject-of-interest and create a Risk Profile from it,” says Saunders. “SafetyNet looks at everything - public posts made about and by the subject-of-interest, public records, newspaper articles, court records, and so on. All this information makes it easier for a human expert to understand the level of risk a subject-of-interest represents.”
The Challenge
Realizing there was a significant market for a tool like SafetyNet, DSS spun it out into a separate product. Financial institutions, law firms, accounting firms, public sector agencies, and many others can all use SafetyNet for enhanced due diligence and regulatory compliance. However, as DSS began rolling the platform out to these clients, it uncovered a communications bottleneck – one that’s incredibly common throughout the financial services sector.
“There are a few tools on the market that help companies comply with KYC and anti-money-laundering requirements,” explains Saunders. “A major issue that the industry struggles with is the process of how reports are filed with the regulator, particularly where confidentiality is concerned. Let’s say someone comes into a bank with a large amount of cash. The cashier is required to check the source of funds to ensure legitimacy. If there is anything that appears questionable, the cashier must alert a compliance officer.”
“If the transaction appears suspicious enough to indicate money laundering or terrorist financing, the compliance officer must submit a Suspicious Activity Report (SAR) to the regulator,” he continues. “Currently, this involves printing out the relevant document template, filling it out, signing it, and submitting it to the regulator by post, fax, or an online system. Not only is this process incredibly time-consuming, it runs the risk of the person-of-interest being tipped off, which is itself an offense.”
KYC and money laundering compliance lapses have resulted in global banks being fined over US$320 billion between 2008 and 2018.
With this in mind, Saunders began looking for a way to bake secure messaging functionality directly into SafetyNet. Clients should be able to seamlessly and securely send documents and data uncovered by SafetyNet to the relevant regulatory agencies. He also wanted to provide clients with the capacity to communicate both internally and externally from within the application.
Security was paramount for this functionality, but usability was no less important.
“What we wanted was a way for our clients to communicate directly and securely with regulators without having to leave SafetyNet,” says Saunders. “We wanted our clients to be able to pass along information without having to contact anyone on the phone, print things off, jump between different apps, or fill out physical documents.”
Already familiar with BlackBerry’s portfolio, Saunders began his search there. He already knew BBM® Enterprise provided the functionality he sought and was curious if there was some way to implement that functionality into SafetyNet. It was through that curiosity that he came across BlackBerry Spark Communications Services.
The Solution
A platform that allows developers to easily snap rich chat, voice, video, and data transfer into applications and smart devices, BlackBerry Spark Communications Services is part of the BlackBerry Spark™ EoT platform. Its flexible APIs seamlessly connect to the core functionality of an application, allowing for the creation of nuanced interactions between users, processes, and endpoints. And perhaps most importantly, it’s backed by BlackBerry’s expertise in both messaging and security.
In short, it was exactly what SAIS Group was looking for.
“We knew about BBM®, and knew it had the functionality we wanted to offer,” explains Beattie. “We also knew that if we needed a secure platform, BlackBerry was our best option. Historically, they’ve always done security very, very well.”
Beattie’s team reached out to a BlackBerry representative in Singapore, who walked them through BlackBerry’s new portfolio and introduced them to BlackBerry Spark Communications Services. A short time later, SAIS Group started using the platform to develop a tool known as K Chat. This highly encrypted messaging application is designed specifically with the privacy and security needs of high net worth and ultra-high net worth individuals in mind. It provides end-to-end encrypted chat, voice, and video, with FIPS-validated, applevel AES 256-bit encryption, ensuring data is always protected on a device, no matter where it’s accessed.
“Whether or not a chat is secure may not seem like a privacy issue on a platform like ours, at least at first,” he explains. “But when you drill into it, it can be. Imagine a CEO of a Fortune 500 company is planning a dinner with someone who’s doing M&A activity with a business he’s looking to acquire. The information related to that booking is extremely sensitive.”
Initially, SAIS Group intends to bake K Chat into its CEM platform. This will allow easy communication between the organisation’s partners and its clients, as well as enabling SAIS Group‘s customer service team to seamlessly and securely reach out to users that require assistance. Although it’s still in the implementation stage, Beattie notes that BlackBerry Spark Communications Services has been quite easy to work with.
“In general, implementation has been very smooth,” he says. “The documentation is very thorough, and BlackBerry has been quite helpful.”
The Results
Reduced Fines: The most immediate benefit of Spark Communications Services is that it allows financial services companies to better meet the FATF requirements around KYC and anti-money laundering.
“Augmented by Spark Communications Services, SafetyNet is now better equipped than ever to help financial services companies avoid getting fined,” says Saunders. “It’s definitely a game-changer.”
Faster, Easier KYC Compliance: The primary reason DSS integrated Spark Communications Services was to address the communications bottleneck surrounding KYC compliance. With messaging functionality now fully integrated into SafetyNet, this goal has been fully realized. There’s no longer a delay when a financial institution needs to communicate with the regulator, and there is a significantly reduced risk of someone being tipped off.
“When financial institutions must contact a regulator, they no longer have to print and scan documents” Saunders explains. “They can speak immediately and directly to the regulator. Not only is it quicker, it’s much more secure than the way they did things before – and it can be done from anywhere.”
Perhaps more importantly, Spark Communications Services allows SafetyNet to offer a superior user experience to the other RegTech solutions on the market.
“In most cases, the user experience where regulatory reporting is concerned is horrible,” recalls Saunders. “Users need to jump between several different applications and systems. They need to manually file paperwork with the regulator and then wait for a response. It’s less than ideal – Spark Communications Services allows us to change that.”
Unmatched Security: “The fact that BlackBerry is such a strong name in security inspires a lot of confidence,” says Saunders. “The certifications held by the company indicate that even the most sensitive data is in safe hands. Moreover, the level of security offered by Spark Communications Services is above and beyond what’s required in financial services, which is why we selected it as the integrated communications platform for SafetyNet.”
Future Plans: In addition to integrating Spark Communications Services into SafetyNet as a regulatory reporting tool, DSS is also promoting it as a platform for enterprise communications.
“Let’s say a businessperson is traveling and he/she needs to communicate and share documents with colleagues back in the office,” Saunders says. “Currently, the businessperson would have to get in touch with his/her colleagues and have them email the documents. The other option would be for the businessperson to access the documents through a VPN. It’s a choice between poor security and poor usability – VPNs are not generally user-friendly on handsets.”
“With Spark Communications Services, businesspersons on the road can communicate with their offices and exchange documents from within a secure, user-friendly, integrated communications client that supports voice and video calls,” he continues. “It’s one more way Spark Communications Services takes SafetyNet to the next level.”