Transforming Financial Crime Management Through Technology

Financial crime remains a trillion dollar issue and one of the key risks faced by both the financial services industry (FSI) and society today despite significant investment in detection, prevention, and deterrence capabilities.

This report considers how firms can deploy technology in the fight against financial crime to lift efficacy and improve the quality of outcomes, while increasing efficiency and reducing costs in the long-term. We showcase five case studies from across the Asia Pacific (AP) region, providing industry practices and insights into how technology is being used to prevent and detect financial crime.

While organisations are at different stages of adopting technology and have varying appetites and budgets to take on projects, all firms can benefit from the adoption of technology solutions. Moreover, the benefits of technology can be bolstered by embracing their use holistically across the entire customer lifecycle.

Key Takeaways

Firms can, in some instances, ‘supercharge’ their financial crime management processes by implementing a portfolio of RegTech solutions to reap the most significant benefits.

In order to gain the biggest return on their investment, firms will need to ensure that their technology solutions are designed with consideration to data, infrastructure and talent and supported by a robust governance framework.

Key considerations when implementing technology solutions:

1. Assess data quality and readiness
2. Know your systems
3. Ensure compliance through design
4. Form a robust governance framework
5. Ensure stakeholder buy-in
6. Establish diverse cross-functional, cross-regional teams
7. Thoroughly scrutinise third-party vendor
8. Arm the organisation with knowledge.
    

Looking to the future

Wherever you are in the RegTech journey, these emerging trends will help you to better understand and manage risk:

• Global partnerships and cross-organisational collaboration - It is vital that organisations work collaboratively to enhance visibility and ensure a coordinated strategy on data and technology sharing, while carefully managing the risks, regulations and rules around data privacy.  Here, regulators and international bodies have a role to play as facilitators and enablers of information sharing.
• Proactive financial crime prevention in the new digital era - Proactive prevention is becoming increasingly viable through the use of advanced AI predictive analytics techniques. For example, scenario analysis and threat modelling can enable firms to assess weaknesses in their AML/CFT processes and systems, and pre-emptively address high risk areas.
• Focus on the customer lifecycle - Consider how to use technology at every step of the customer lifecycle – from onboarding, to data collection and verification, client data management, transaction monitoring, investigations, and reporting. By focusing on the customer lifecycle, not only can firms close potential vulnerabilities for criminal activity, but they can also ensure a seamless customer experience.