A mere 21% of banks think their current technology is flexible enough to handle always-changing compliance requirements rapidly, according to a recent survey. This means that many financial institutions are facing a great deal of risk, especially given the increasingly harsh Anti-Money Laundering (AML) regulations. Consider that nearly a dozen global financial institutions have been assessed fines in the hundreds of millions to billions of dollars for money laundering and/or sanctions violations in recent years.
That’s more frightening than any ghost story.
Many times, banks have good intentions; however, it’s important to remember that the road to noncompliance is paved with good intentions. The strength and flexibility of a compliance system is critical, because as with most things, all compliance systems are not created equal. A piecemeal or reactive approach can waste a great deal of money and time without doing much to make processes more compliant and, in some cases, can make the situation worse.
Below are three common reactive – and ultimately ineffective – approaches:
Mix and Mismatch
- Adopting multiple new systems in an attempt to automate. But often, these systems are poorly integrated, with mountains of data housed in systems that don’t (or can’t) communicate
Ignore the Obvious
- Pushing the limits of legacy non-digital processes and systems that were simply not built to adapt or evolve.
Throw People at the Problem
- Mass hiring of additional compliance staff, which not only adds expense when coupled with outdated manual processes, but also introduces human bias.
Compounding the issue is that banks often feel torn between spending their limited time and resources on compliance or focusing on customer engagement to gain market share.
The good news is you don’t have to make such a choice—better compliance and better customer engagement aren’t mutually exclusive. There are clear steps your bank can take to streamline and beef up your compliance processes, while simultaneously delivering the intuitive, engaging experience customers demand.
Compliance Begins With Empowerment
Above all, your bank needs the flexibility to adapt and respond quickly to change—whether that’s changing compliance regulations or changing customer expectations. This is where a digital transformation platform with a comprehensive range of capabilities for end-to-end-digitization can deliver enormous benefit.
What if your bank could be empowered to meet compliance regulations via an open architecture that bridges new and legacy infrastructure? What if your customers could be empowered through a hassle-free user experience that lets them engage on their terms (whether that’s in the branch, on a laptop or on their mobile phone)?
Here’s a snapshot of the must-have capabilities for achieving Grade-A compliance and customer empowerment:
Adopt and Adapt
- Adopt digital technologies on your timeline with a self-paced transition path that aligns with your unique business priorities.
- Adapt quickly as regulations change by employing an open architecture that integrates with (and doesn’t strain) your legacy systems.
Accelerate and Authenticate
- Accelerate information intake through omnichannel capture (via mobile app, etc.) and error-free data integration.
- Authenticate on mobile devices through form prefill, ID verification and facial recognition, and remove the need for customers to visit a branch office by offering electronic signatures.
Automate and Aggregate
- Automate AML checks using software “robots” to mimic human data verification tasks.
- Aggregate customer data from websites and other hard-to-reach sources, in real time on an ongoing basis, and protect your bank with detailed audit trails.
Access and Analyze
- Access information quickly to discover critical issues that could lead to problems, missed opportunities or costly violations.
- Analyze processes and identify issues to address (bottlenecks, exceptions, etc.) before you are at risk of noncompliance.
Learn more about how you can protect your bank from risk and offer a better onboarding experience for your customers. Download the infographic AML Compliance: What You Don’t Know Could Hurt Your Bank and the white paper Anti-Money Laundering (AML)—The Compliance Acronym That Could Really Cost You.