The Latest Digital Solutions Helping Financial Companies Stay Compliant

The Latest Digital Solutions Helping Financial Companies Stay Compliant
The Siliconreview
12 January, 2022

41% of financial firms say they use technology to better stay compliant with regulations, including the international regulatory environment, along with internal rules. Indeed, digitization across the entire industry can be used to accurately understand common compliance issues, prevent financial crime, and protect customer data (in terms of digital wallets, online transactions, and mobile banking apps, for example). Digital solutions can also help firms successfully avoid fines and problematic audits and maintain a positive reputation and loyal client base. 

Semi-automated processes

Mistakes caused by human error are typically unavoidable across all industries, while machines (although usually accurate) can also sometimes make incorrect calculations. To solve this problem, semi-automated processes combining AI tech with human intervention can better help ensure compliance with regulations, improve accuracy, and save businesses time and money. In particular, AI solutions can be used to minimize or eliminate duplicate or overlapping documents, streamline rules and processes, and perform repetitive tasks. Able to accurately predict and analyze, AI can also issue in-depth reports to help people make better business decisions. Human employees are then freed up to focus on developing effective compliance strategies and solve non-standard problems. 

Cloud-based WORM solutions

Record-keeping that follows WORM (write once, read many) format allows firms to store data efficiently, so it can’t be altered or erased. US financial service firms, in particular, must comply with FINRA rule 17-a4, which requires business communications (like websites and social media) to be recorded and archived in WORM format. And, as an alternative to relying on physical records like tangible documents and hard hard drives, WORM compliant cloud storage means data can be kept more accessible and remain adequately protected. Crawl technology, for example, can be used to instantly search complete digital estates to devise a robust, tamperproof, and ISO-compliant archive. The resulting WORM archive can be easily accessed without letting itself be compromised.

Improving cybersecurity

Although digital solutions improve business operations and client opportunities, they can simultaneously leave the door open for cybercriminals, fraud, money laundering, and data abuse. As such, strict AML (anti-money laundering) and KYC (know your customer) procedures play a key role in maintaining cybersecurity. KYC, in particular, ensures financial institutions verify customer data (including, name, address, blacklist checks, and connections with various institutions) before taking them on as a customer. By sweeping through large data sets, AI can be used in this process to quickly and efficiently verify clients, as well as highlight high-risk customers, which in turn saves businesses valuable time and money. Additionally, reliable AI payment tools, including voice and iris recognition, fingerprints, and finger vein pattern recognition, can further improve cybersecurity, prevent unauthorized individuals accessing sensitive data, and facilitate compliance with AML regulations.

Digital solutions can play a key role in helping financial firms stay compliant. Semi-automated processes, cloud-based WORM solutions, and AI-based cybersecurity, in particular, can help businesses successfully face the compliance challenge and keep both clients and regulatory bodies happy.