RegTech can eliminate human errors, Here’s How.
Is your business facing risks caused by human errors? Fret not, RegTech is here to help.
Many businesses make use of labour-intensive operations to implement regulatory requirements. However, since the 2008 financial crisis, both the volume and complexity of regulation has increased so as to prevent a repeat of the crisis. Many businesses have thus struggled with these changes, with some implementing automated processes so as to generate the required reports in a more efficient manner.
These traditional methods are not only labour intensive but also have high room for human error especially in the area of Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT). It was found that 9 out of 10 alerts generated by traditional AML monitoring systems tend to be false alarms. These alerts then have to be manually scrutinised so as to sift out the suspicious activities. This often leads to more room for human error, posing a risk to your business.
RegTech to the Rescue
With Regulatory Technology (RegTech), this can be changed as RegTech has the capacity to increase the productivity of compliance teams by as much as 100% whilst reducing risks.
Requirements like client onboarding, know your customer (KYC) and AML can be better managed through the automation of authentication processes. This automation of processes helps to optimise production capacity as it allows more human resources to be used efficiently for tasks with greater added value. RegTech also helps to reduce operational risks, as well as increase efficiency, accuracy and lower costs through the automation.
RegTech also offers Know Your Transactions (KYT) which helps businesses to manage their risk exposure to illegal activities by utilising advanced risk algorithms for transaction limits, laundering trends, and by layering heuristics and robust cryptocurrency addresses database. Lastly, RegTech can help to improve customer experience as the digitisation of the onboarding process, appealing to more customers as it offers a fast yet seamless online experience.
The automation of processes by RegTech poses as a solution to many businesses especially those who struggle with labour-intensive operations. The tools that RegTech offers can immensely help businesses to not only be compliant but also productive, accurate and cost-efficient. As regulatory changes occur, more and more businesses are obligated to be compliant. As such, the shift to RegTech should be made where possible so that businesses can eliminate problems such as human error and be compliant in the most efficient manner.