At Januar, we are excited to share that the Danish Financial Supervisory Authority’s (DFSA) only has given Januar 4 executive orders on the back of their inspection in May 2024. Their investigation, encompassing both our AML and payment services frameworks, has left us brimming with pride. Notably, the DFSA did not find any deficiencies in our AML processes - an achievement rarely seen elsewhere, that underscores our unwavering dedication to compliance and risk management, particularly for AML, in an inherently high-risk industry.

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“I am very proud of the results from our inspection. When I tell people that we have gotten 0 findings for the AML area, they are visibly impressed. So I like to tell that a lot, and will begin to tell it even more, now that the report is public" - Marcus Mølleskov, Chief Risk & Compliance Officer at Januar.

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The executive orders the DFSA did give us are not too harsh and provide valuable insights into where we need to improve the governance and risk posture of the company. 

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“It is always tough to get criticism, especially in public, but 4 executive orders is very good for an inspection by the DFSA. I hope other people will read it in that context. We have decided to consider it free consultancy hours on how to improve the company and we have already staffed up in the area and delivered on most of the executive orders, which of course are subject to follow up, but I feel confident that we are a better and more resilient company on the back of this inspection” - Marcus Mølleskov, Chief Risk & Compliance Officer at Januar.

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DFSA Findings and Our Proactive Response

Here is how we have tackled their recommendations to maintain our commitment to excellence:

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1. Addressing Potential Conflicts of Interest

Finding: The DFSA noted that our board’s structure did not adequately delineate potential conflicts of interest, particularly concerning overlapping roles within the company.

‍Action Taken: To align with the DFSA’s mandate, our Founder and MLRO, Simon, has stepped down from the board. This decisive action ensures there are no overlapping roles within the company, effectively removing any conflict of interest and reinforcing the board’s independence and integrity.

‍DFSA Directive: “Virksomheden har fået påbud om at sikre tydelig afgrænsning af dobbeltroller og interessekonflikter i bestyrelsen.”

(Translation: The company has been given an executive order to ensure clear delineation of dual roles and conflicts of interest within the board.)

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2. Enhancing Documentation and Oversight

Finding: Insufficient documentation of board discussions related to Risk & Compliance Committee activities created potential gaps in accountability and oversight.

Action Taken: We’ve introduced a fixed agenda item for discussing Risk & Compliance Committee minutes at every board meeting. Additionally, we are now documenting discussions and decisions more extensively to ensure clarity and traceability.

‍DFSA Directive: “Virksomheden får påbud om at sikre, at bestyrelsen i nødvendigt omfang forholder sig til beslutninger truffet i risikokomitéen.”

(Translation: The company has been given an executive order to ensure the board adequately considers decisions made by the risk committee.)

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3. Strengthening Risk Management Procedures

Finding: The DFSA highlighted inadequacies in our risk identification and management procedures, potentially exposing the company to unidentified risks.

Action Taken: We’ve developed and implemented comprehensive risk management procedures. These are now fully documented and actively monitored to ensure effective identification, mitigation, and reporting of risks. We have also added external experts to the Risk & Compliance Committee to strengthen its advisory role to the CRCO.

DFSA Directive: “Virksomheden får påbud om at sikre effektive skriftlige procedurer til at identificere, forvalte, overvåge og rapportere om risici.”

(Translation: The company has been given an executive order to ensure effective written procedures for identifying, managing, monitoring, and reporting risks.)

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4. Establishing Robust Internal Controls

Finding: A lack of internal control procedures meant non-compliance with operational guidelines could go unnoticed.

‍Action Taken: We’ve hired a new Compliance Manager and established a 2nd-line control framework. This ensures independent oversight across all operational areas, reducing dependency on individual assessments and strengthening our systemic integrity. Furthermore, this appointment frees up time for our Chief Risk and Compliance Officer (CRCO) to allocate additional focus and resources toward enhancing our risk management capabilities.

DFSA Directive: “Virksomheden får påbud om at sikre interne kontrolprocedurer således, at manglende overholdelse af forretningsgange opdages.”

(Translation: The company has been given an executive order to establish internal control procedures to detect non-compliance with operational guidelines.)

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Read the Full Inspection Report

For those interested, the full inspection report (Redegørelse om inspektion) from the DFSA can be accessed here. Please note that the report is available in Danish.

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Moving Forward with Confidence

The DFSA’s executive orders serve as both a recognition of our achievements and a blueprint for continuous improvement. At Januar ApS, we embrace these directives as opportunities to strengthen our compliance and governance framework. By adhering to the highest standards, we reaffirm our commitment to protecting the integrity of financial transactions and safeguarding against financial crime.

Stay tuned for more updates as we continue to lead with transparency and innovation in the ever-evolving financial landscape.