Adopting latest technologies has made things easier for banks and has also saved costs. But, at the same time, it has also paved the way for discrepancies.
FREMONT, CA: Technology along with data and automation does not only help businesses integrate into the financial industry but also revolutionize it. This is also true for the compliance that had to follow the integration of unique technology and data to anticipate the regulatory demand, witness cost reduction practices.
"You cannot fight what you do not see" would be a more precise way to look at this market development. Financial firms need a creative mindset, but they also need to understand how data models work in detail to address these contrasting purposes. Know-Your-Customer (KYC) is crucial from a regulatory perspective, but the way financial institutions employ this principle entirely depends on the "Know-Your-Data" question.
Across surveys of compliance risks in the financial industry, a substantial majority of respondents said that digital technologies have helped detect financial crimes. The use of technology to detect and prevent financial crime is directly related to financial crime awareness.
The collaboration of AI and self-learning components in the latest technologies has enhanced the transaction analysis by recognizing complex and multi-layered transactions as well as irregular transactional behaviors of clients.
An Economist article said that it will cost around 75,000 dollars each year for each client who is at high risk to manage. In this regard financial firms have great potential to adopt digital solutions in order to reduce costs. However, the adoption of new technologies in the context of compliance has paved the way for the troubles for banks regarding the wealth management sector. The big question is, who actually is responsible for the digital transformation process in the banking sector? Is it banks based on regulatory demand or digital solutions providers on the basis of permanent growth near never-ending solutions?
