The banking sector is always in the limelight by reporting entities in several due diligence regulations. The goal here is to free the banking sector of any frauds, and financial crimes such as money laundering and terrorist financing. But the current scenario is counterproductive; several major banks received negative publicity during 2019. The cases of Swedbank and Danske bank are top of the list.
AML compliance is inevitable for the banking industry but the question is, what is the right way to do it? This is the mystery that the banking industry needs to solve to practice efficient AML compliance that would actually reap benefits to improve their future. The solution to this mystery is the digital AML screening. It is the ultimate solution as it can perform necessary AML screening within 30 to 60 seconds. It can screen anyone on the planet earth with high precision. Outsourcing such a solution is a click away and you’ll be all set to tackle fraudsters and criminals.
The banking industry is exposed to fake or stolen identities, money laundering, terrorism financing, corruption, account takeover fraud, data breaches, cybercrimes, and several other frauds. All these frauds can take multiple facets which can be captured within seconds using a digital identity screening solution.
Still not convinced to use a digital AML screening solution? Read more to know why it is the best solution for the banking industry.
- The evolving regulatory landscape
Regulatory authorities are becoming more stringent towards the financial sector. Imposing non-compliance penalties is becoming second nature of regulatory authorities. When manual verification fails, digital screening solutions work best for the banking industry.
2.External competition coming from fintech
In their wake of competing with fintech, banks are quickly adopting modern technology. Fintech is coming up with advanced solutions for the typical banking operations, and in wake of that, the banks are also moving towards introducing technology in “some” of their operations. This technological evolution without necessary firewalls exposes the banks to a huge risk. So it is important for banks to introduce technology into their due diligence protocols.
Also, the launch of Facebook’s Libra is expected in 2020 and it will give even more competition to the banks as it is a fully fiat-backed cryptocurrency offering global transactions. Now the banks would try to counter this competition but stringent regulations on the banking sector might create hurdles.
The best solution to practice thorough due diligence and AML compliance is through next-generation AML/KYC screening solutions.
3. Fraud is increasing
Data breaches are increasing and losses worth millions of dollars occurred in 2019. The financial sector also incurred huge losses. Some of the major data breaches like Equifax, facebook, and Google exposed the data of millions of individuals and businesses. So it means that the risk is higher than ever. It is inevitable for businesses to perform identity screening at a global level on all their stakeholders. One exposed credential (e.g. ID card number) can be used to defraud several banks with weak security protocols.
Third part data breaches might become your loss so using an AML/KYC screening solution helps businesses identify that the legitimate person is making the verification through an ID card or another identity document.
To wrap up, the world is moving towards complete automation. If bots are taking the place of humans, then how could banks survive without adopting technology at an organizational level. Also, it a cost-effective solution and provides global coverage in AML screening services. So be wise and automate your AML compliance department to stay in the game for long.