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Future Fast Forward: How RegTech has transformed Compliance

A decade ago, KYC processes and AML checks took months. Teams of workers often devoted weeks to examining endless criteria. And, by the time the checks were complete, regulations had inevitably changed.

Larger companies could just about cope. But SMEs – who often lacked money, time, and staff – were also subject to the same rules; no matter how hard they tried, they lacked the resources to comply.

Then RegTech burst onto the scene, and the game changed completely. So great was this transformation that, from 2014 to 2018, nearly $6 billion was invested in RegTech solutions that specifically addressed KYC and AML. And, over the last five years, more than $9.5 billion has been invested in RegTech companies around the world!

When it comes to RegTech, the financial sector is clearly on board. Why? Because RegTech is the only – and complete – solution to cutting time, costs, and effort in KYC and AML procedures; ensuring any company (no matter its size) can not only compete, but also thrive in the modern market.  

PAST PROBLEMS

Traditional KYC processes took an inordinate amount of time and money. And as all those involved – including lawyers, accountants, tax advisers and asset managers – waited for checks to be completed, costs spiralled.

At the same time, many companies fell foul of a rapidly changing regulatory landscape. The EU’s first AML Directive was launched over 30 years ago, in 1990. But the 4th Directive was implemented by member states in June 2017; the 5th came into force exactly a year later, in June 2018; and the 6th appeared in January 2020.

Human error was another pitfall. No matter how meticulous the staff, errors inevitably occurred during the checking of the huge numbers of data sources (including government sanctions lists, watchlists, politically exposed person lists, newspapers, and international court cases) required by KYC and AML. Critical data fell through the cracks, and hundreds of companies, try as they might, fell foul of the regulations. Reputations were lost; penalties levied. And companies which had tried their hardest to comply went bankrupt.

THE GAME CHANGER

Then came RegTech: an innovative digital solution which streamlined the entire KYC and AML process. Suddenyl, manual procedures (with all their incumbent waste of resources) became obsolete. A new AI age had dawned, and firms around the globe breathed a sigh of relief.

Now, KYC processes could now be completed in a matter of minutes. Speed and accuracy rocketed, as infallible technological solutions that could learn and adapt simplified the entire process. Transparency increased a hundredfold; specific parameters, analytics, and digitalised alerts helped vanquish financial crime.

FUTURE PERFECT

But there’s still more to come. The ever-increasing billions invested in RegTech are proof that this is the technology of the future. And in the coming decade, RegTech is expected to further transform financial sector regulatory compliance by:

  • Simplifying data
  • Increasing the efficiency of information sharing
  • Closing the gap between intention and interpretation

 

And, ultimately, ensuring that all regulation and compliance processes are a matter – not of months, weeks, or even hours – but of minutes!

Comply faster with RegTek+

Trusted by 350+ Financial Institutions Globally, the RegTek+ Complete Client Lifecycle Management, KYC & AML (On-Premise and SaaS) Solution ensures businesses comply faster and more efficiently than ever before.

A leading platform from one of the region’s most trusted solution providers, RegTek+ streamlines all your day-to-day compliance operations; automates ID verification and collection of data; provides real-time data, decisions, and monitoring; and – most importantly – speeds up the entirety of your KYC and AML processes.

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