Our RegTech100 inclusion, and the crucial need for evolving regulatory technology

Criminal webs that launder money are only getting trickier to identify and prosecute. That’s why local and global regulators, particularly in light of the open-border nature of transactions these days, are requiring firms to adhere to stricter rules when strengthening their anti-money laundering (AML) processes. That can often mean adapting to regulations that are introduced or altered at a moment’s notice. 

This ever-evolving regulatory landscape is necessary for fighting sophisticated financial crime. However, it poses multiple challenges for firms looking to streamline their compliance protocols and avoid damaged reputations or hefty fines. Without efficient, adequate modern systems and a well-introduced compliance-first culture, staying one step ahead of fast-moving dirty money becomes that much harder and can have further drastic implications for the world. 

Luckily, regulatory technology (RegTech) can be instrumental in alleviating the operational pain points that businesses face when looking to improve their AML capabilities.

RegTech: a strong line of defence

A more technological approach to compliance marks a move in the right direction. Each year, the prestigious RegTech100 list recognises the most innovative companies that are reshaping ways to face regulatory challenges from a pool of 1,400 businesses. It showcases the range of technologies available to make the world a better place, and RelyComply is thrilled to be included in 2024’s roster.

We are dedicated to continuing to develop a transformative solution that can have a great impact on the way financial businesses conduct their AML compliance. With RegTech experts on board – and the sector anticipated to grow to $60.77bn by 2030 – financial firms stand a better chance at not just complying with regulations but exceeding the standards expected of them. And while change is inevitable, a powerful RegTech solution should be able to adapt to whatever direction future regulations take.

The need for cutting-edge compliance

Maintaining proper compliance systems and risk assessments is the sum of many intricate moving parts. Without a thought-through strategy – from onboarding new customers through know your customer (KYC) to periodic audits – maintaining proper oversight of customer data for every step is a necessity that can have costly consequences without correct implementation. Fines in South Africa have been incurred up to R100,000 for failing to provide thorough, ongoing AML employment training alone. Other violations include failures to spot beneficial ownership structures during identity verification checks, or suspicious activity during transaction monitoring. 

The regulatory environment is tough, encompassing global holistic recommendations laid out by the Financial Action Task Force (FATF) and jurisdictional watchdogs. Companies are caught between investing in well-maintained RegTech to improve the operational efficiency of company-wide compliance workflows and maintaining oversight of the costs to the wider business. As such, financial pressure remains a problem (with 45% failing to monitor their cost of compliance with regulations), while the use of legacy technology, sporadic data being divided across multiple software, and a lack of awareness about the repercussions of poor compliance efforts identify the necessity for sophisticated RegTech.

Where uptake is slow to adopt RegTech, the troubles of manual labour can also affect each part of an AML compliance system. Systems can differ according to a firm’s risk management preference, but innovative platforms redefine compliance by integrating easily with existing data sets and bolster solutions that every firm requires. These include suspicious activity reporting, alert scoring, screening customers against sanctions, politically exposed person lists, and adverse media. 

Using automated technology can reduce the impact of many challenges posed by stringent rules. Real-time alerts are achievable through the continuous tracking of potential fraudulent behaviour or anomalous transactions, as well as a reduction in false positives that can be missed or accounted for during traditionally manual assessments, and an increased throughput rate for customer due diligence.

The RelyComply edge

Detailed risk reporting relies on the strength of a powerful RegTech provider. RelyComply’s platform provides businesses the ability to streamline their entire AML compliance system at every stage in one single view, alongside other unique solutions:

• Our AI-driven platform provides the advantage of speeding up tasks traditionally handled by hand while processing vast amounts of data to identify risks and flag suspicious transactions around the clock to provide audit evidence immediately. 
• Firms can integrate our flexible solution swiftly and readily according to their specific compliance objectives and customer risk profiles set up in KYC. The ability to tweak thresholds and scenario-based flags for transaction monitoring helps to tune an AML system according to a firm’s risk framework and spot anomalous information in real-time.

RelyComply’s highly configurable smart technology not only applies to diverse business cases but adapts to suit the ever-changing nature of the regulatory landscape, future-proofing AML compliance from the get-go. 

The continued innovation of RegTech

More regulatory obstacles are bound to appear as fincrime techniques evolve and new rules are introduced at global and local levels to battle them. However, it does not mean that maintaining a consistently successful compliance process is impossible. Forward-thinking technologies, such as those listed by the RegTech100, can automatically adhere to bespoke risk profiles and maintain compliance oversight. 

RelyComply is dedicated to empower businesses to more easily adapt to the complex regulatory environment, with our inclusion on the RegTech100 recognising our continued commitment to transformation within the compliance space. 

If you’d like to know more about how RelyComply can assist in overcoming your regulatory hurdles, contact our team for an initial chat – our solutions suit a range of compliance needs.