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No more excuses: compliance doesn’t need to slow down remittance services

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Do you remember paying for things by paper check (that’s a ‘cheque’ if you’re reading this in the UK)? On the receiving end, remember the three-day wait, or more, while funds cleared?

Thankfully those days are gone. On a personal level many people can access faster payment services that enable real time and near instantaneous payments between accounts in the same country.

This is not a uniform global experience. Many payments are still slow to go from one account to another. This often include international Money Remittance services, where the fast movement of funds can be vital for the recipient.

In fact, remittance services play an essential worldwide role. Individual transfers may not be huge but their frequency means they account for considerable revenue: The World Bank estimates their value in 2022 as $626 billion1. There are numerous providers operating in a competitive market. The ones who ensure near instant payments will be the ones who grow.

What’s slowing down the movement of money?

Consumers used to assume banks held on to money being transferred because they could invest it overnight, for several nights, and keep the profits while the customer waited for money to arrive. But let’s not speculate…

Today, other reasons for the slow transfer of money can include the slow adoption of modern technologies, system security concerns and, the cause probably most often cited, compliance.

Compliance is multi-layered and complex. Plus, many systems in use for Know Your Customer (KYC), Anti-money Laundering (AML), Counter-terrorism Funding (CTF) and Sanctions checks rely on rules-based analysis which (even with computerized assistance) is labor-intensive and rarely provides complete coverage.

The outcome is cautious behaviour by compliance teams who are diligently responding to known patterns of financial crime, rather than being equipped to identify new approaches to fraud or other criminal activity.

Compliance does not have to be slow

The drawbacks of the status quo are discussed in some detail by Pedro Ferreira on financemagnates.com2. One of his comments is that even modern fintech solutions remain slow, at least partly because of compliance concerns.

While this is a widely held view, the reality is that better solutions are available.

Well-structured compliance services that cross-check multiple data bases can  support continual real-time transaction monitoring. They are highly efficient and very cost effective. They can provide comprehensive checks which take only seconds, yet still provide the highest level of protection – against accidental non-compliance and, more importantly, against the actual criminal activity itself.

Adopting these services needs to be purposeful and focused, but it shouldn’t be difficult. The best packages will not replace existing systems but will be accessible from them (no new hardware required!), and they’ll be easy to use. Adoption of these comprehensive and integrated services is the natural next step towards remittance services that work smoothly, efficiently and in an instant.

By Bjorn Larsson, Chairman of Essiell Compli.

Introducing Compli from Essiell Compli

Compli is a unique suite of services designed to deliver comprehensive checks for KYC, AML, CTF and sanctions busting. It offers always-on transaction monitoring, and analyses individual behaviours to identify different levels of risk, suggesting actions accordingly.

Compli operates worldwide on AWS and harnesses our unique “Global Person” concept to craft individual profiles from multiple databases.

Compli ensures an unrivalled richness and accuracy of data – non-negotiables in ensuring compliance in the fight against financial crime.

If you’d like to find out more  about Essiell Compli and Compli  and how we can help your business stay safe, remain compliant, and defeat financial crime, why not book a call back or a demo?

You can also get in touch via our website www.essiell-compli.com ,  or by email to enquiries@essiell-compli.com   

1 https://www.worldbank.org/en/news/press-release/2022/11/30/remittances-grow-5-percent-2022

2 Can fintech Solutions Streamline Real-time Remittances? , Pedro Ferreira, Friday, October 10 2023

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