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The Pandemic and the Payments Sector – How RegTech is Meeting the Challenges of the European Market

Close to 40 million adult EU citizens still lack access to formal financial services, according to the European Savings and Retail Banking Group – that’s roughly half the citizens of Germany, or 10 times the entire population of Ireland!

For the most part, these citizens are in Eastern Europe: almost 40% of Romanian residents lack a bank account, closely followed by 37% in Bulgaria, 23% in Slovakia, and 28% in Hungary. And while such high percentages are to be expected in less developed countries (where a lack of infrastructure and resources block access to formal banking services), it’s staggering in Europe. But it won’t last. Given the recent pandemic and the consequent change in consumer habits, such a figure will very soon be a thing of the past.

COVID-19: Adapt or go Bankrupt

Over the last 12 months, COVID-19 has completely reshaped retail behaviours, increasingly forcing consumers to purchase products and services online. But it’s also totally redefined the other side of the equation: the sellers. And, by default, the entire nature of the Payments Sector…

Today, product and service providers have only two choices: adapt or go bankrupt. Most have chosen to adapt, and this has led to an unprecedented boom in the financial services landscape. And with COVID-19 restrictions curtailing physical business actions around the globe, digital financial services are now not just the norm, they’re a must.

Such rapid growth means, of course, that the Payment Services industry (PSPs, eWallets, NeoBanks etc) has had to adopt technological advancements at an exceptional rate. As of spring 2021, we’re seeing any number of remarkable digital services coming into play: services which are, above all, user-friendly and easily accessible. But while this is good news for both retailer and consumer, the rapid adoption of digital technology is proving a huge challenge to the Payments Industry itself…

Compliance Challenges, Digital Solutions

Compliance is the new watchword here, as organisations across the Payments Industry endeavour to stay in line with ever-changing regulations (such as the European Commission’s stringent 6AML Directive) or else fall foul the law and its consequent penalties, which now include exorbitant AML fines.

Fortunately, while technological advancements may have increased the compliance risk factor, they’re also the solution to these woes: RegTech (or regulatory technology) is completely revolutionising the Payments Sector with its introduction of automation, cutting-edge digital tools (which enable seamless client onboarding), and wholly automated KYC, AML and identity verification checks.

These automated RegTech solutions are hugely beneficial to the Payments Sector. Always up-to-date with the latest regulations and news, such software can screen and monitor payments effectively and effortlessly, minimise the need for human intervention, and deliver machine learning and publicly available databases.

All of which means that, when those 40 million rush to join the world of formal financial services, the Payments Sector organisations will be ready and compliant – as long as they’ve adopted comprehensive digital financial solutions!

At iSPIRAL, we have years of experience in helping Payments Sector organisations adapt to the latest challenges, and work with a host of international payment firms who trust us implicitly with their business.

Our RegTek+ platform is a market-leading solution which provides a tailor-made, risk-free compliance environment for financial service providers, and offers seamless onboarding and automated KYC, AML and identity verification checks.

Check out how you can join our list of satisfied Payments Sector clients and achieve a fail-safe compliance culture for your organisation.  

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