AML Study reveals manual processes are slowing down banking compliance

AML Banking Survey by RiskScreen finds 8 in 10 complain their compliance processes are too labour intensive, slowing down onboarding and screening.

The study commissioned by RiskScreen, an award-winning provider of onboarding, screening and in-life monitoring technology, also found two-thirds of compliance professionals at banks rely on manual processes for performing necessary KYC checks.

Despite 70% of respondents agreeing that the pandemic has accelerated digital transformation in the banking sector, over half of respondents said that the number of false positives delivered by their existing solutions are too high.

The AML survey, which was highly targeted to the banking sector, also revealed that 65% of compliance workers are still relying on Google for manual adverse media searches. Adverse media screening is a part of the anti-money laundering (AML) and know-your-customer (KYC) due diligence processes that regulated entities, such as banks and insurance providers, must perform when onboarding new customers.

According to Stephen Platt, RiskScreen CEO and co-founder of the International Compliance Association, relying on manual processes is hampering financial institutions’ ability to generate revenue whilst simultaneously exposing them to unnecessary risk.

“Manual processes not only waste valuable employees’ time and add to the friction of a negative customer experience, they also significantly impact a bank’s time to generate revenue from new and existing business. From a financial crime perspective, they can leave banks unnecessarily exposed to human error, risk from regulatory fines and huge reputational damage.” 

Interestingly, the survey found that – despite a majority of respondents admitting to relying on manual processes in part to conduct their due diligence checks – the risk of fines and serious legal consequences was their top concern in relation to AML compliance failures.

Although the adoption of regtech solutions in the banking sector accelerated throughout the course of the pandemic, Mr Platt argues that banks are still struggling with onboarding and screening customers efficiently whilst remaining compliant.

“While the pandemic’s certainly accelerated digital transformation, financial institutions still seem to be struggling with overly long onboarding times as well as dealing with monitoring risk with existing customers. If the banking sector wants to truly accelerate their processes and achieve faster revenue, then they must start investing in the technology and tools that will make it easier and quicker for compliance professionals to do their job effectively.”

The full report is accessible from this page.

About RiskScreen

RiskScreen is an award-winning AML & KYC technology provider dedicated to improving the effectiveness of compliance departments through intelligent process automation of risk-based customer onboarding, screening and in-life monitoring.

RiskScreen solutions are flexible, scalable and auditable. Crucially, they are comprehensible allowing compliance professionals to understand the logic behind decisions RiskScreen helps them to make.

Founded by pre-eminent compliance experts including the original co-founder of the International Compliance Association, RiskScreen is a trusted technology provider to thousands of compliance professionals globally and a partner of the world’s leading data and CRM businesses including Dow Jones, Refinitiv and Salesforce. www.riskscreen.com

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