Financial institutions assign 10 to 15% of their staff to be responsible for compliance, but still wasting their funds on missteps. The legal and compliance market is expected to double in the next four years, so to avoid losses and successfully adopt innovative solutions (RegTech) we, first of all, have to identify key challenges financial institutions face when trying to comply with regulations:
Lack of data standardisation
A whole range of data standards creates an issue for financial institutions to find an efficient framework for stable financial system. To be fully compliant, it is important to monitor established practices and be ready to adapt to new data regulations. It might be time-consuming, but there is a solution: instead of investing their time and money in creation of own regulatory technologies, financial institutions now have the opportunity to use white labelled RegTech services that will do this duty for them.
Poor fraud monitoring
There is not much progress in AML and fraud monitoring systems when it comes to financial industry. Experts stress that the success in this area will only come with coordinated supervision in recognising suspicious trades.
Data privacy
Adoption of new solutions and technologies always implies some concerns on how it would affect clients’ data privacy. The confidentiality of such data must be prioritised by financial institutions, ensuring its security at all times and especially during the transfer of data. However, a range of restrictions on data usage only makes it more challenging to achieve full data security.
The part that contributes to a poor adoption of innovative regulatory technologies is the lack of knowledge on how they actually help to successfully comply with regulations by financial institutions. Additionally, the majority is not aware of while label RegTech services available — for example, such as Crassula RegTech product that allows companies efficiently manage risks and comply with regulations through provided AML/KYC solutions with unique algorithms. Using a white label service results in saving a big amount of funds and time on development of own ecosystem.
