RegTech is a set of technologies focused on the prevention of fraud, the management of risk and on complying with governmental regulations.
RegTech provides the agility for organizations to:
Reduce risk management and compliance costs: Expanding the team can significantly increase cost. Increasing capacity for an automated process is as simple as the elastic scaling capabilities of the risk management and compliance vendor.
Increase compliance speed and accuracy: Manual transaction monitoring can be slow with the quality varying with the experience and expertise of the team. Automated processes are fast and consistent regardless of the volume.
More efficient access to data: Data can overwhelm manual systems where additional inputs and analysis can greatly slow processing speed. On the other hand, an automated system can capture data across multiple systems and analyze it regardless of volume. These systems can produce easier and faster access for information reporting from businesses through to their regulators.
Quickly address new regulations and process changes: Changing a manual process requires training and a period for the team to absorb the new process. Changing an automated process can be as simple as changing one or more business rules.
For banks, fintech companies and merchants looking to get more efficient and effective,RegTech is the new way.
It offers a lower cost, agile solution that is focused on operational efficiency across high volume processing and regulatory compliance. It also provides analytics for decisions that helps close the gap with the best members of your team.
Areas where RegTech can be applied include:
However, not all solutions are created equal.
In the digital world, companies deal with a wide variety of issues and customers. This spans customers from different demographics, geographies with different risk profiles as well as transactions that span the full life cycle from onboarding to purchases. So, when searching for warning signs in transactions it is critical to review multiple transaction attributes (e.g. IP address of user, phone number of user etc). Such approaches are far more accurate at detecting fraud. Furthermore, if the identity of the user behind a transaction is known, one can detect if they are suspicious i.e. attempting to make multiple transactions at the same time, attempting smurfing, structured layering or whether, they are legitimate customers with good behaviors based on their transaction history. Consequently, a broader full life cycle solution provides a stronger foundation over time, with greater coverage across a variety of risk and compliance issues that a business is likely to face.
Do you think you have digital compliance & risk covered? Think again!
Digital business is the new normal, and financial services regulators are hot on the case. Indisputable record-keeping across all digital channels — online, social and mobile — is a legal requirement (SEC, FINRA, DOL, MiFID, FFSA, Fidleg,…). There is no room for doubt.
Unfortunately, legacy technology does not improve with age. Continued investment into legacy systems that are failing to deliver is like slapping lipstick on a pig; however much you add, you can never disguise what’s going on underneath. And in the case of digital compliance, that translates into higher costs and increased business risk.
New RegTech solutions such as Qumram are addressing the challenges Financial Service and FinTech companies are facing. Not only it ensure regulatory compliance and detects and prevents fraud, it also leverage the regulatory requirements to provide business growth benefits by improving the customer experience.
100% Transparency fully automated and at your fingertips
Qumram, based in Switzerland, provides a compliant and transparent digital audit trail of all online, mobile, and social interactions. Every digital interaction is 100% recorded, and can be replayed on demand, without technical assistance.
Source: medium posts