RegTech and Financial Crime Prevention


By FINTECH Books Contributor, Jennifer Hanley-Giersch
Follow: @Integrity_Risk

The British Bankers’ Association’s estimated that financial crime compliance costs its members some GBP 5 billion a year. Ever growing regulatory requirements coupled with market constraints facing organisations, in a time of globalisation and technological advancement, the need for technological solutions, which meet the challenges of compliance and financial crime prevention are apparent.

The proposed article would like to present some of developments in the RegTech market relating to financial crime prevention and to discuss how bourgeoning RegTech companies are becoming a welcome partner for compliance departments, who are increasingly under pressure to manage costs and produce performance indicators for their efforts. The article would provide an overview on how RegTech solutions are adding value to Financial Crime Prevention initiatives and will add value to investigators toolboxes thus freeing up resources, best assigned to those areas, which require analytical insights and judgement-based decisions.

Who are the leading and most innovative market players operating in the RegTech field and also provide some insights into the regulatory landscape and developments in this area? Regulators like the FCA, recognise that technology might be able to help streamline compliance processes with the help of Artificial Intelligence and Biometric Identification. Basic customers due diligence checks for example taken by many firms remain paper based, much as they were 20 years ago. This presents an opportunity to make a step change in efficiency and effectiveness. Although many believe that there are opportunities for banks to pool their resources in developing KYC Utility Services banks are still reluctant to buy into such private sector projects.

The on-going debates around data protection and ethics and suggested risk management limitations of RegTech in assessing indirect and reputational risk exposure continues to be discussed. The debate is balanced against the backdrop of an outlook assessing the future perspective of future actionable insights, which may emerge from RegTech tools given the advancement in the areas of Artificial intelligence and Data analytics.

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