• By quade
• 28 November 2023

Fintech Compliance Is Shaped by Data Technologies

Businesses that provide financial services, particularly fintechs, must keep an eye out for blacklisted people and companies on global watchlists. It is their duty to make sure they don’t supply financial services to criminals or companies that deal with individuals on any watchlist.

Although controlling these risks is a difficult and costly endeavor for any organization, it is getting easier to do so as data technology advances quickly. Fintechs are also benefiting from it by being able to comply with regulations and stay in compliance. Business assurance and anti-money laundering are the two main pillars of this watchlist monitoring (AML).

The 4C Group provides fintechs and African businesses with these two services. Watchlists for foreign countries are updated often, sometimes even several times a day. Fintechs can compare their offerings by utilizing data technologies and clever IT tools.

Why watchlists are important

In regards to international watchlists, governments and other authorities are stringent. Fintechs that are discovered to be doing business—whether on purpose or not—with sanctioned people or companies risk harsh consequences, such as fines, banishment from some markets, and compulsory closure. Fintechs ought to utilize these watchlists to safeguard both their own clients and themselves.

They offer financial companies a mechanism to cross-reference their customer base and transactions with a list of people who have been marked for political exposure, money laundering, terrorism, and other offenses. When interacting with sanctioned individuals and organizations, fintech’s consumers may also be put at risk, in addition to their reputation.

Data technology improves watchlist management

When given the responsibility of watchlist monitoring, businesses will encounter numerous difficulties. Fintechs should monitor both private and commercial watchlists for duplicates in addition to routinely updating these lists. To facilitate screening, the lists also need to be standardized.

Fintech companies can significantly decrease the time required for these procedures by automating them using data technology or managed services. Programs will keep track of frequent updates, synchronize lists, and eliminate duplicates. The monitoring of consumer behavior, transactions, and risk profiles is also possible with the same software.

Because of this, fintech companies are able to create precise consumer profiles and quickly identify any fraudulent activity. They have the authority to initiate internal inquiries and provide support to law enforcement when needed. These kinds of data tools can help financial services firms reduce risk and enhance watchlist management.

Along with fixing several downstream problems, this will also fix false positive flags and inaccurate alarms. Fintechs may enhance their alerting and client experience by knowing their consumers better and staying current with sanction lists. The most significant benefit is that it will guarantee their continued compliance with national and international laws and regulations.

Using the correct data

Fintechs must use the appropriate data at the appropriate moment. Expectations for regulations and compliance have evolved in recent years. Regulators now demand fintechs update their watchlists nearly instantly, which is only possible with the use of software and current data.

Typically, data is retrieved in numerous forms, from multiple sources, and from multiple watchlists. Fintechs must select the appropriate datasets and attributes to use as a foundation for developing efficient AML and compliance systems. Utilizing technology is the only accurate and efficient way to accomplish this.

The end result should be the same for fintechs, whether they choose to develop their own software, adopt a software as a service (SaaS) strategy, or outsource to a managed services provider: real-time watchlist monitoring and quick alerts for numerous protocols. More control, more efficiency, and more precise identification of possibly illicit transactions should be the objectives.

4C Group offers various business assurance services

Encompassing revenue assurance, fraud management, and AML. These smart and automated systems can help African fintechs guarantee compliance and efficient watchlist monitoring. Get in touch with us right now to learn more about these options.

At 4C Group of Companies

We strive to effect operational changes and cost savings for customers through our iNSight product and associated services. This product’s main function is to repurpose and deliver business-critical information to a variety of systems and stakeholders.

Our areas of expertise include fintech solutions, business assurance, information management, and a range of cyber security services. Visit our blog page or give us a follow on Facebook, LinkedIn, and Twitter for additional information about our offerings.