The technologies leading the way in fighting financial crime.
What are some of the technologies that are bringing the fight to all forms of financial crime?
How are they changing the market?

Financial crime continues to be extremely prevalent in the financial services industry and across wider sectors. In the UK, for example, 64% of businesses experienced fraud, corruption or other economic/financial crime in 2021, increasing from 56% in 2020 (PWC, 2022).

Many compliance operations professionals are still grappling with manual processes, out of date systems, and inconsistent client data. In turn, this is leading to too many human errors, audit issues, and a risk of not keeping pace with the regulators or sophisticated criminals.

Yet, there are an array of truly ground-breaking technologies on the market, spanning everything from CRM, onboarding and KYC to transaction monitoring, screening, ID&V and risk monitoring. The list could go on.

RegTechs across the Client Lifecycle Management spectrum are competing to differentiate themselves from one another, however the ones that will come out on top are those that can demonstrate how they solve the problems financial institutions are facing in the most effective way. Whether that is through automation of manual processes to realise cost savings, increasing visibility of the onboarding journey and improving the customer experience, or leveraging a wide array of data sources to help FIs unpack complex corporate hierarchies and understand their customer; they are all in the market to solve a problem, but it can be incredibly confusing for buyers of the technology. Getting vendors to actually demonstrate how they would solve your specific problem and the value they can bring to your organisation should be a key part of the selection process in order to provide clarity and suitability.

Zooming in on one part of the ecosystem, Onboarding & KYC remains incredibly manual in many large organisations. There are a huge number of point solutions as well as those claiming to solve the challenges in this space end-to-end. A key benefit of some key solutions on the market is the automation of simple manual tasks and low-risk cases, which frees up Compliance to add real value by focusing only on those high-risk clients. Although not yet fully solved, firms are also looking to a north star of perpetual ‘always on’ KYC. It isn’t here yet, however technology is starting to move towards real-time processing of data from a wide range of data sources to bring live data feeds that update internal systems as it changes in the market.

Platforms that can be rapidly configured allow organisations to adapt to ever-changing regulations to tackle financial crime and significantly reduce implementation timeframes. This ability helps firms realise value early and solve the parts of their business that are keeping them up at night.

Criminals are also acting quickly as they become smarter and more sophisticated. Capabilities such as AI and Machine Learning are now being incorporated into AML programs, enabling FIs to analyse transaction and client behaviour to make predictions about what they might do in the future. Additionally, AI is helping AML teams to reduce ‘noise’ created by false alerts, so they can focus their efforts on investigating genuine money laundering alerts and tackle financial crime in the most effective way.

These new evolutions in the RegTech marketplace are helping to transform the financial services industry for good, however it is also creating a market where FIs really aren’t sure who is in the zoo. Vendors can make the decision easier for their buyer by clearly communicating where they fit in the end-to-end puzzle and showing how they solve the problem the buyer is experiencing.

Ben Marsh CEO, iMeta Technologies
As published in Regtech Analyst, Dec 2022