The impact of instant payments on compliance is under discussion by the industry. The benefits to customers are clear: speed, certainty, irrevocability and transparency. But banks need to balance their customer demands for speed with regulatory demands for financial crime and risk controls.
This can be extremely challenging for compliance professionals. With payments moving faster, cash outs can be made quicker, and the window for carrying out compliance checks shrinks significantly. So how can financial institutions continue to ensure payments are secure?
Work as a community
Taking a community approach is fundamental to creating a globally secure network.
Real time is facilitating greater collaboration to support straight-through processing, and these shared approaches have the potential to further benefit the effectiveness of compliance processes.
As a community, we have already taken significant steps forward, creating solutions that speed up the compliance process. Swift’s KYC Registry is just one example. It delivers huge benefits to banks, with a global standard agreed upon by the community and a secure platform enabling efficient data sharing. It is truly a community solution, and banks are aligned on the processes.
Growth through innovation
As payment teams invest in upgrading systems in preparation for ISO 20022 and improve data quality for real time, the potential for compliance teams to innovate grows. Shared solutions will reduce cost and deliver greater precision in the identification of sanctions and AML breaches.
Data is key in real-time compliance
Real-time cross-border payments will also deliver cleaner data and more transparency across the payment process. This is an opportunity to build greater levels of trust across the banking community and new, more collaborative ways to address financial crime.
How can compliance teams help to build a secure future?
Compliance teams can play a critical role by facilitating greater levels of trust, transparency and collaboration while mitigating risk.
- Identify and address unnecessary duplication within AML and sanctions, which can introduce risk and inefficiencies for banks.
- Deliver greater precision through AI and machine learning, based on common platforms and standards.
- Drive innovation in information sharing without compromising personal data privacy to proactively address financial crime.