There is no denying that financial crime exists. It spreads like wildfire, putting businesses on edge and business compliance teams on high alert. It looks like 2022 will be no exception to this rule.
The signs indicate that the criminals are becoming more intelligent, faster, and more ruthless. The recent announcement by Interpol to open a center against financial crime and corruption has highlighted this nefarious trend.
The Complexities of Financial Crime
If your business is in the financial services sector, you need to understand the potential risks and take action. Due to the complex nature of financial services, detecting and preventing fraud is a constant challenge.
The financial risks you face could be domestic or international in origin. Also, not all attacks are from external fraudsters, as employees can pose a threat. Combined, they can be lethal.
Keeping On Top Of Changing Laws And Regulations
It’s not only the fraudsters you need to keep an eye on. The rules and regulations are forever changing. Your internal monitoring system for financial crime needs to be flexible but robust.
A compliance workflow is imperative to satisfy the regulatory requirements. It can help you make the right business decisions at the right time, using the right people in the organization.
Financial Crime In 2022
If you don’t protect yourself now, you might be wishing you had a time machine to go back in time. This still won’t help you rectify the situation if you don’t understand what you need to track.
Financial crime covers the following offenses:
- Bribery and corruption
- Cybercrime
- Financing of terrorists
- Fraud
- Market abuse such as insider dealing
- Money laundering
Some areas have become more active since the pandemic. Here are a couple of places where criminals have started increasing their activities.
Digital Payment Risks
Pushed by the pandemic, the reliance on digital payments has caused significant problems. The criminals are becoming more intelligent, faster, and far more ruthless. Fraudsters manipulate e-payments to carry out ID theft, and phishing is becoming the norm.
The Manipulation Of Money Mules
The manipulation of money mules has also reached dizzy heights in 2022. Vulnerable older people, who are not tech-friendly, tend to be the prime targets. Unknowingly, they allow criminals to use their accounts to transfer money and thus facilitate money laundering.
Financial Compliance Works Better With Automation
Automation is key to staying compliant in the financial services industry. It can give you the freedom to make quick business decisions guided by accurate information.
You’re not reliant on dodgy figures or struggling with old manual systems that are more a hindrance than a help. To say it’s empowering for businesses would be an understatement. It’s the perfect solution to match our high-tech environment.
According to statistics from PassFort, digital KYC checks through 10 of their most active customers had approval rates above 94%. With incredible stats like that, it makes sense to harness the power of automation. It helps your business generate more revenue and keeps your customers happy. Both are desirable business goals to achieve.
Streamlining Your Compliance Operations
Planet Compliance spoke with Alex Richter, Head of PassFort (a Moody’s Analytics company), to learn more about compliance automation and how it can help. Alex said, “The need for effective technology to meet the fast-evolving compliance demands in the financial sector is more critical than ever. The availability of software as a service (SaaS) RegTech solutions, like ours at PassFort, enables businesses to automate anti-financial crime and compliance processes.
“PassFort’s use of cloud technology is designed for the digital economy. Our low to no-code solution solves compliance challenges at scale across the 197 countries and 211 jurisdictions our customers operate in. We support businesses to streamline the onboarding process for more than 4 million customers each year, enabling those organizations to deliver the best services safe in the knowledge that their compliance is taken care of.”
Automated KYC and AML Compliance For All
Regardless of your company size, the transition to automation is essential for compliance. Startups can use these advanced technologies to automate their KYC and AML compliance. A startup also has a distinct advantage in using tech early in its development. Whereas larger organizations play catch up as they move from traditional manual systems.
Risk Monitoring With Perpetual KYC
PassFort has an innovative product that enables regulated firms to transform their KYC and AML workflows digitally. PassFort Lifecycle can help to automate everything from onboarding to offboarding. It can also deliver continual risk monitoring, helps compliance teams make easier risk-based decisions, and brings people into the process when they give the most value.
Some of the key aspects of the PassFort Lifecycle are as follows:
- You can use automated compliance checks with low-to-no-code. This usability means anybody in your organization can use it.
- A flexible risk engine lets you combine KYC, KYB, and AML datasets. You can go and define your low, medium, and high-risk profiles.
- You can use the portal to receive live notifications and real-time risk updates. It helps you to refine your compliance process even further.
- With integrated data, you can complete automated checks in your workflows. You can also arrange your checks through one single API.
- You can communicate with customers directly through the platform. The whole compliance process is easier for the customers and the business.
The process you use will define how effective your business is at staying compliant. From the above, you can see that an automated process can take a heavy burden off your compliance team. It gives the team time to handle other issues instead of spending it on KYC and AML checks. But at the same time, have the peace of mind that you have the proper identity checks in place.
Put In Place A Financial Crime Budget
Off the back of this, putting a financial crime budget in place is a top priority. You might have to justify this expenditure to the board. But the potential pitfalls and financial implications outweigh any budgetary requirements.
An automated fintech solution can make things easier. You will have greater control and can move quickly to match regulatory changes.
You can also list your RegTech and LegalTech businesses with us. Get listed today and let the world know about your products and services.