There is no doubt that the latest technologies for regulatory compliance remain a complex issue for banks because with the ever-growing and changing regulations aimed at anti-money laundering (AML) and Know Your Customer (KYC) compliance, large banks may just find it burdensome but mid-sized and smaller banks are finding the cost of obtaining the necessary trained staff and adequate compliance technology a major concern.
New compliance technologies are evolving rapidly by using sophisticated analytics, automation, machine learning and artificial intelligence to help banks mitigate risks and avoid financial crime and money laundering. But, the need for this new technology has become so great that according to the Accenture’s 2018 Compliance Risk Study, 89% of their respondents said that the investment made in compliance will continue to rise over the next two years. It also states that there will be a heavier emphasis placed on the need for better technology and less on the need for more staff. And banks lacking access to this technology are being placed at a disadvantage to their competitors who do have access.
Due to the rising costs of creating and maintaining the latest compliance programs and the need to deliver first-rate customer service, smaller banks have opened up to the idea of shared platforms. The concept of sharing information between banks has never been considered a solution before because of the importance in protecting and maintaining the privacy of the sensitive information given to them by customers.
By using a shared platform, banks are allowed to share non-competitive data sets and improve their risk management capabilities to enhance their compliance. Using this approach, a group of banks can leverage a host platform to perform either part of a control process or the whole control process which will enable them to keep the “open door” policy to other technologies as they emerge. The collectiveness of the participating banks can help drive innovation further. Looking forward, more and more banks, as well as compliance technology innovators, are expected to use this approach in an effort to continuously improve risk management solutions and reducing compliance costs for financial institutions.
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