Which Technologies Should RegTech Systems Developed with an Integrated Approach Include?
Under current conditions, in many banks and financial institutions, compliance processes such as Know Your Customer (KYC), Customer Due Diligence (CDD), and sanctions list screening are carried out by different analysts using separate technologies. The results obtained from all these processes are then consolidated during the case analysis phase. However, drawing conclusions from these separately generated outputs largely depends on the investigator. Any oversight at this stage may lead to negative consequences for both the individual conducting the investigation and the team involved.
Managing all monitoring and screening systems in an integrated manner through a single platform—under the shared oversight of the entire team throughout the case analysis process—provides a modern approach to compliance. This enables more effective identification and reporting of suspicious behavior and, ultimately, improves the detection of financial crimes.
System Flexibility
System flexibility generally refers to the ability of users to customize the system according to their needs while minimizing reliance on IT support. All modern data analytics systems are expected to adopt the principle of data democratization*. This democratization—allowing users to easily access and evaluate the data they need—is made possible by enabling them to add features and functionalities to the system without requiring technical expertise.
Our proprietary Datactive Query Language allows users to define the functions they need without writing any code. Through the management panel, users can quickly manage all query-related features, from defining entities and sub-entities to configuring right-click actions—one of the key data discovery features of the network visualization interface.
With continuously evolving payment methods and technologies, the volume of data that compliance units must monitor continues to grow. As a result, auditing methods must also evolve. In this context, updating rule-based systems (such as PLSQL or TSQL) often cannot keep pace with rapid change. Consider the Russia–Ukraine crisis as an example: global dynamics can shift suddenly, creating unforeseen situations. The outbreak of the war and the subsequent sanctions imposed on Russia by many countries introduced highly sensitive compliance requirements for compliance professionals. These developments once again highlighted the importance of having an agile infrastructure capable of responding swiftly to sudden and critical changes.
Discovering Hidden Connections Through Graph Visualization
Graph visualization is widely recognized as the most modern approach to crime detection*. This approach is particularly essential for identifying organized financial crimes. By visualizing relationships within data, it becomes possible to uncover subtle details that cannot be detected through manual or rule-based alert systems. For example, during KYC checks, network analysis enables in-depth investigation of a customer’s indirect connections—such as companies in which the individual holds shares, other partners within those companies, and the risk profiles of those partners—allowing for more accurate risk scoring.
Datactive RegTech Solution offers all these capabilities and more through its advanced graph visualization features. Within the Datactive visualization interface, every real-world relationship can be fully customized by the user using images, icons, colors, and more. With conditional formatting and visual data mining techniques, connections that require immediate attention can be quickly distinguished at a glance.
Instant Access to Required Data
For the system to automatically and consistently generate accurate risk scores, it must be able to access all required data seamlessly. Ensuring continuous and reliable connectivity between internal systems and both internal and external data sources is therefore critical.
Data collected from different applications and stored across multiple data sources is one of the most important evaluation factors for compliance units. For this reason, logically connected data must be accessible through a single interface.
With Datactive, data stored in distributed systems can be analyzed through a single interface, and results can be viewed within the same environment.
By querying data directly at its source and connecting seamlessly to all data sources—including web services—Datactive automatically updates information based on near real-time data. Additionally, APIs such as facial recognition services and sanctions list services used within institutions can be rapidly incorporated into analyses.
Determining Risk Levels with AI Support
Intelligent automation enables time-consuming routine tasks to be completed quickly, freeing analysts to focus on in-depth investigations. For example, in KYC and CDD processes, machine learning algorithms play a key role in continuously enriching the system and generating dynamic risk scores. As internal and external data becomes more comprehensive, the system’s ability to evaluate this data effectively leads to more accurate risk scoring. This not only improves the accuracy of analysis and screening processes but also significantly reduces false positives.
False Positives
Factors such as inclusion on sanctions lists, negative media coverage, or presence on PEP lists are incorporated into risk scoring models. In bank-external transfers such as EFT or SWIFT transactions, or in sanctions list matches, individuals’ names may not always appear as exact matches. In such cases, name similarity algorithms are essential to ensure that critical details are not overlooked. For media screening, natural language processing (NLP) is used to interpret written content and perform sentiment analysis. The results of this analysis are automatically reflected in the risk scores of individuals and accounts associated with negative news
Although the system architecture described above may appear comprehensive and complex, a solution built on these technologies significantly increases the efficiency and productivity of analysts and related teams. Datactive RegTech provides all the technologies and infrastructure required to meet the compliance needs of the banking and financial sectors. By adopting an integrated solution with advanced capabilities such as Datactive, institutions can effectively eliminate the false positives generated by traditional rule-based systems.