Introduction Lysis Financial researched the impact the coronavirus COVID-19 has had on regulatory operations and payments within the financial service industry. The research was carried out through a survey which was distributed globally to people working in regulatory operations and compliance departments within financial institutions. The assessment into payments was carried out using anonymised data from a global payment service provider. Geographical Reach The respondents of the survey were mainly focused within Europe with greater concentration in the UK, Ireland and the Netherlands. Broader participants were located across East Asia, India and the Middle East. Given the impact COVID-19 has had on Italy and France, the research into payments was limited to these countries. Executive Summary The wider and more stringent “lockdown” in Asia, and the inability for most personnel working in large Business Processes Operation (BPO) centres in India to work remotely resulted in a greater impact in these regions in managing and facilitating regulatory operational processes and controls. Ireland appears to be one of the countries least impacted by COVID-19 and the subsequent lockdown. This appears to be due to stringent and well tested Business Continuity Plans being in place.

The UK and the Netherlands also fared well due to a wide ability of regulatory and operational personnel to work remotely. The majority of the global respondents said COVID-19 had a negative impact on the processing of new client onboarding and KYC refresh. Regulatory reporting is unlikely to be affected. The number of credit card payments being processed from January to April in Italy and France has radically reduced from the previous year. This is relatively easy to understand as the figures are concerning the data which was based on a service provider used predominantly by non-European tourists to spend money in shops, restaurants, airports and other similar social scenarios. Impact of COVID-19 on Regulatory Operations Business Continuity Planning Only 60% of all respondents said their firm had an effective Business Continuity Plan (BCP) which had been tested before the “lockdown” which was enforced due to COVID-19. 40% of respondents located in the UK said their firm did not have an effective BCP designed before the “lockdown”. All respondents located in Ireland said they had an effective and test BCP in place whilst many respondents located in the UAE and Japan said there was no BCP documented before COVID-19. 30% of all the respondents said they were not aware or trained on a BCP before the lockdown. Remote Working & Processing 60% of all respondents said the firm’s entire regulatory operational personnel were working remotely whilst 20% said only 50% of personnel were working remotely. Only 30% of respondents said there had been no impact on the management of new client onboarding requests and KYC refresh processing.

Risk Assessment & Regulatory Reporting Only 20% of firms have carried out an internal risk assessment concerning financial crime since the COVID-19 outbreak. The majority of respondents said there are no planned changes to their regulatory reporting but 30% reported there would be an impact on regulatory reporting due to the lockdown. 10% of respondents said there would be an impact to regulator auditing but the majority of these were located in countries with stiff lockdown measures or in India where there was a widely reported impact of little remote working. Training 20% of respondents said the financial crime compliance training programme has or will be impacted by the COVID-19 lockdown.