The ideal payment system is frictionless, seamless and instantaneous – and free from the risks of financial crime.
There’s the catch. As the financial world continues to get more complex and inter-reliant, the holy grail of simplicity and full regulatory compliance becomes seemingly more elusive. And while digital banking continues to grow more robust, systems which offer greater efficiencies are themselves complex and potentially susceptible to bad actors; those seeking to commit fraud, launder money or indulge in other criminal activity.
There’s an urgent and ongoing need to find ways to stay ahead of financial crime without adopting systems which cripple commerce with caution.
The customer always comes first
A lot can be done by customers – businesses as well as individuals – to counter online fraud. Indeed, it is the customer’s responsibility to act with caution and avoid becoming vulnerable to deceit. Most people, most entities, try to act prudently, but businesses as well as private citizens remain at risk.
Scams include confidence tricks of varying scale, the hi-jacking of accounts, the syphoning off of funds little but often, and impersonation based on unlawfully gained information. It no revelation to recognise that financial service businesses are better protected if they know their customers well. If they do, they can identify anomalous behaviours that could indicate financial crime.
Does regulation help?
Governments and regulatory authorities can help create an environment where compliance is rigorous and criminal activity harder to get away with. But in the same breath, anti-crime defences can act as barriers to the efficient and timely movement of money. For many compliance teams, this is an ongoing challenge.
So, while regulation creates the environment, financial service businesses have a vested interest in taking control of fraud prevention and risk management themselves.
This is something discussed recently by Dave Glaser in Payments Journal*. He neatly captures important approaches that provide considerable strength: real time transaction monitoring and setting the levels of cautionary process friction at a Goldilocks level – not so much to slow things down, but just enough allow to analysis and verification. With just the right built-in safeguards, it should possible to respond to anomalous behaviours quickly and effectively without creating bottlenecks. He’s right.
Digital can deliver the best of both worlds
Sounds like a big promise? It would if it were not achievable at a practical level. With the right digital services, it really is possible to have efficient and effective risk management.
At Essiell Compli, our Compli suite of services delivers thorough but frictionless onboarding, always-on real time transaction monitoring, and automated escalation to enhanced authentication when behaviours change. Our Global Person concept creates a unique profile for each customer using multiple databases, and collaborating organisations can share data to step beyond ‘silo’ limitations.
At the heart of this offering is a deep understanding of the logistical and practical challenges involved in ensuring compliance, while also facilitating seamless business transactions.
Transitioning to state of the art tech – it needn’t be daunting
It used to be. For example, for a large bank to replace its legacy systems can seem prohibitively expensive – in terms of time as well as resources. However, Compli needs no hardware replacement yet it comes with multiple measurable benefits.
Compli is accessed easily via an intuitive application programme interface. This API integrates with the host system without big architectural changes. Point of sale and in-house terminals can access Compli quickly and easily. Installation and operation are cost effective. Benefits are accessible by all sizes of financial institution. The user experience – for staff as well as customers – is excellent and rewarding. Value for money is outstanding.
By Bjorn Larsson, Chairman of Essiell Compli.
If you’d like to find out more about Essiell Compli and Compli and how we can help your business stay safe, run smoothly and remain compliant, and defeat financial crime, why not book a call back or a demo?
* Navigating Risk and Fraud Management in the World of Bank Transfers, Dave Glaser, Payments Journal, October 17, 2023