Encompass’ new white paper unveils key regtech trends

Scotland-based fintech Encompass just published a landmark whitepaper authored by Dr. Henry Balani, Global Head of Industry and Regulatory Affairs at Encompass, analysing trends in financial crime compliance. 

The document shows regulatory pressure concentrated on areas such as Ultimate Beneficial Ownership (UBO) and also an increase in fines against firms for non-compliance, especially crypto exchanges, brokers, asset managers and securities firms, and in the UK and Asia.

Interestingly the white paper also looks at the impact of Russia’s invasion of Ukraine, and the volatile and complex systems of sanctions this has created. These international issues are being exacerbated by internal factors, such as outdated technologies exposing firms to greater risk of non-compliance leading to failure to effectively identify suspicious customers. Internal inefficiencies are also impacting the speed at which regulated firms are reacting to change. 

The findings really show how opting for KYC automation can help fight financial crime as the sophistication of perpetrators increase.

Looking at 2023, the white paper mentions likely increases in sanctions regimes and money laundering scandals which should engender new regulations with KYC becoming even more important. 

Dr. Henry Balani, Global Head of Industry and Regulatory Affairs at Encompass, commented: 

“It is likely that we will continue to see investigative and enforcement activity in all jurisdictions focus on the quality of systems and controls, as well as the true application of a risk-based approach to managing financial crime compliance.

“The ability for firms to demonstrate they have a robust KYC framework, with efficient and effective controls - and a well-defined and comprehensive approach to customer risk assessment - is critical to standing up to regulatory scrutiny.”

Photo by Tima Miroshnichenko: https://www.pexels.com/photo/close-up-view-of-system-hacking-in-a-monitor-5380664/