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Legacy systems: tether or springboard?

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Compliance costs money – something well understood in the financial services sector, including niche areas such as Gambling, and Travel Money and Remittance providers. But making compliance cost-effective can seem elusive.

As geopolitical tensions multiply, and as criminal activity expands in the digital environment, legislation and regulations multiply. The burden on individual businesses intensifies.

The price of pioneering

Many financial service businesses were early to realize the advantages of computerization. As technologies developed, new systems piggybacked on the original infrastructure.

Over time, it became too costly and disruptive to replace entire systems. Many early adopters have ended up juggling outdated tech, attempting to keep pace with evolving needs.

Historically, much compliance work was (and is!) undertaken by dedicated teams carrying out checks manually. Yes, they had (and have) computers to help them, but the cognitive heavy lift was done by people. As compliance requirements – like KYC, AML, CFT, and Sanctions – swelled, the go-to solution was to onboard more personnel. But human resources come at a premium.

High costs cause compromise

Jonny Bell highlighted these challenges in a Gulf News* special. Amongst other things, he notes the high cost of compliance. “In 2022, financial institutions spent $274 billion on financial crime compliance, compared to $213.9 billion in 2020.” As global tensions increase, as sanctions lists lengthen, and as cybercrime proliferates, these costs will only increase.

Legacy-laden businesses, grappling with an avalanche of tasks, often resort to selective case management. This approach, however, leaves them susceptible to blunders. Compliance missteps are not only costly; they tarnish reputations too.

Approaches to risk vary – but the dangers are the same

Faced with these huge challenges, some financial services businesses adopt a “risk orchestration” approach. In theory this means KYC and risk management work in synch.

In practice there are still gaps in provision. Not all systems “talk” to each other, data silos block the flow of data, and overburdened staff still make judgment calls.

The reality? Only an holistic approach can cope with growing compliance demands.

And this is where I declare an interest. As Chairman of Essiell Compli, I’m proud our Compli suite has been developed to precisely tackle these challenges – automatically, efficiently, and economically.

Compli = consistently compliance

Compli, powered by Essiell Compli, operates globally on the AWS cloud. It is infinitely scalable, so case volumes are not a problem. Importantly, Compli can be adopted without pricey overhauls. Compli is accessed via existing hardware. Legacy systems are no longer constraints – they are springboards to new provision.

Compli uses our Global Person concept to build individual profiles from multiple databases. For collaborating organisations, data silos are a thing of the past. Automatic sanctions list checks and customizability make Compli even more potent.

Compli is always-on. At its heart is continual transaction monitoring, with analytics that identify different levels of risk and suggest countermeasures.

With Compli, unwieldy overstretched teams of analysts are a thing of the past. Compli delivers excellence – without compromise.

By Bjorn Larsson, Chairman of Essiell Compli.

If you’d like to find out more  about how Essiell Compli and Compli can help your business stay safe and meet compliance requirements – especially if you work in Gambling, Travel Money or Money Remittance services – then please our website www.essiell-compli.com ,  or drop us an email at enquiries@essiell-compli.com   

*Can ‘risk orchestration’ tech be businesses’ defence against financial crimes? Jonny Bell, Gulf News, 29th September 2023

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