Global total transaction value is expected to show an annual growth rate (CAGR 2024-2027) of 11.58%, resulting in a projected total amount of US$14.78tn by 2027. Regulatory authorities are rapidly changing regulations to fight against financial fraud, tightening their grips on loose compliance frameworks by imposing fines. Different regulations around the world keep updating, leading to an expansion of compliance, but it also creates a backlog, as organizations find it difficult to implement quickly. And it’s very challenging for companies to address this backlog with traditional approach.
The traditional compliance approach can be replaced either by an automated solution or by a smart solution. An automated solution makes tasks easy by implementing rules to detect abnormal patterns. However, with the rapidly growing use of AI, compliance faces challenges as fraudsters are using AI to find loopholes in automated solutions. Is there no alternative to this?
There is. Why not use fire against fire, that is, using smart solutions powered by AI? These solutions are becoming an indispensable requirement across all industry verticals.
What makes a Smart solution better than automated and traditional methods?
Smart solutions, backed by AI, offer flexibility to handle various types of money laundering and fraud. They can process all types of input data, from structured to unstructured, with some featuring fuzzy match, such as the Effiya Compliance Suite, for enhanced screening. Offering higher recall rate and precision, providing room for further false positives reduction by 30%. Such solutions allow quick and easy implementation of regulations and a framework to battle financial crime. Additionally, smart solutions automate repetitive activities of the investigators.
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Is implementing any smart system the answer to continuously increasing frauds?
The one-word answer to this is No. To remain at the top of compliance, there is a continuous need to stay updated with regulatory norms and swiftly implement changes to current policies and plans. This is why Effiya Compliance Suite offers a no-code platform where changes can be implemented on the fly. And Effiya’s Sanctions solution contains black-lists and grey-lists that get updated automatically.
Training is the key:
A sound compliance system also requires regular training of the compliance team from the head of compliance to managers, associates, and compliance analysts. Training should be comprehensive to define regulations, laws, and policies required in day-to-day tasks. Well-documented Standard Operating Procedures (SOP) updated at regular intervals help in leveling up compliance standards.
Strategic Compliance:
A strategy for compliance is another important factor that helps streamline compliance and increase operational efficiency. Having a well-planned strategy will help achieve the set goals and level up compliance standards.