Enhancing Enterprise Compliance Management

The FinTech revolution has allowed many new players to enter the market. Disruptive banks and open banking have become serious competition for traditional banks. These new banks and financial services applications have yet to build a reputation. But that also means that they are not notoriously unethical. Which is probably an advantage. 

Step 1: Make Integrity Your Core Value 

Banking is a business based on trust. And trust is based on the belief that a company conducts its business with integrity. Simply put, if customers think they can't trust you, they won't keep their money with you. While the personal banker used to be the face of the bank and also the key to building trust with customers, today local banks are disappearing. Rather than dealing with a personal banker, clients are asked to handle almost all of their banking online. This change requires banks to maintain impeccable reputations. As each defect has a negative effect on the trust that customers place in you. 

Trust is not just about one-to-one interaction between the bank and the customer. Clients also look at their general conduct in society. This is especially apparent in the Millennial and Gen Z generations. They are very critical about where they spend their money. They prefer ethical companies. 

Having a clean reputation has been beneficial to banks. This means that they will not invest in companies that are not necessarily risky in compliance but also do not contribute to creating a better world, such as tobacco companies or arms manufacturers. They are booming now and will continue to be in the future, as Millennial and Gen Z generations outnumber Baby Boomers in size. Soon these generations will represent the largest group of consumers. And they are very critical about where they spend their money. They expect businesses to have high integrity and ethical morals. 

Step 2: Take Control of Your Compliance 

Compliance with the perceived integrity of banks plays a key role. Many banks are viewing compliance as a burden. It is true that it is a difficult job to do. Most banks have a hard time keeping track of their compliance. They have too many alerts to handle. And too much pressure from your colleagues to "process the payment because the customer is waiting." 


And don't expect any praise for being in control of your compliance. No one ever says, "This bank is great at preventing money laundering, they have never had fines or comments from regulators." But the opposite happens. If a bank has a compliance problem, it is an immediate scandal and seen as evidence that the banks have learned nothing from the financial crisis. Customers and the general public will say, "Look, they still only care about money." 

It's a thankless job. But, vital to maintaining your business. 

So, the best thing you can do is solidify your conformity perfectly. Make sure you don't miss any positive alerts. Get to know your customers and make sure you are aware of what is happening at your bank. Be in control. And if you can, take it one step further. 

Step 3: Your Compliance Software Should Help You 

Rules-based surveillance is no longer sufficient to monitor compliance. In fact, most of the transaction monitoring systems currently in use by banks do just that: monitor transactions. But money laundering, for example, cannot be detected by a system that is as simple as rule-based surveillance and deals only with individual transactions, as money laundering often starts with small payments that are not detected by the system. 

From a regulatory standpoint, it is also impossible to keep up with compliance with rules-based surveillance, as regulators are increasingly shifting to enforce rules that, for example, prevent banks from processing payments. to companies that operate in certain industries, rather than placing limits on the amounts of individual transactions. 

With principled surveillance, many different factors are taken into account when evaluating a payment. Rules are used, but the signals that these rules give are enriched with, among others, the following information about a client: 

Behavior patterns: What kind of behavior does a customer usually display? Is there something different about his behavior in this particular case? 

Network information: Who is the customer connected to? 

Risk-based surveillance; Is it a high-risk or low-risk customer? 

If banks manage to raise the quality of their compliance, they will significantly increase their chances of maintaining their business. If not avoiding fines from regulators, then certainly maintaining your reputation. By updating current systems with modern compliance management technology, banks have a great tool to help them regain control. But even for banks that are in control, modern technologies help to be more proactive in investigating integrity issues, as well as strategizing and adequately preparing for what is to come. 

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