We mention RegTech in our previous post. In this article, we will discuss the importance of an integrated approach to regulation technologies.
As we mentioned, since the legal regulations are critical, more specified systems are necessary for the compliance process. These systems are collected under the RegTech term. On the other hand, having a system that is positioned as a RegTech is not enough to manage compliance processes to avoid fines and sanctions. The competence of the system is also crucial. Most compliance and regulation software systems generally provide a single solution (such as sanction lists scanning, news scanning, reporting, or network visualization) or collect one or two of these solutions. Hence, it is necessary to invest in several products to meet compliance needs completely. This situation induces financial difficulties and diminishes the integrated approach to analysis which is necessary to capture all insights. Hence, an integrated approach that is strategically developed is a must to fight financial crimes in compliance with regulations.
Features That an Integrated RegTech Solutions Must Contain
The first requirement to define regulation technologies as integrated is the ability to collect and analyze all internal and external, structured, and unstructured data on a single platform. To manage compliance processes, it is necessary to scan and analyze both internal data (transfers, account, and customer information, etc.) and external data (sanction lists, news, etc.) together to reach the ultimate result. To detect all connections between data from customer traffics and profiles, it is necessary to analyze all these data on a single platform by using advanced network visualization. For example, integrated analysis is crucial to discover a person, who is involved in an illegal money transfer, is also on a sanction list, or is connected directly or indirectly to a person who is on a sanction list.
The necessities of integrated regulation technologies can be defined as below:
Connection to all data related to individual or corporate accounts: information such as beneficial owners, company information (shareholders, being mentioned in previous suspicious reports, etc.) should be included in the analysis. They are important for the system to give a risk point.
By querying data on its source, Datactive RegTech connects all structured and unstructured data for analysis.
Network Analysis: Visualization of connections between internal and external data on a single interface provides an effective solution to discover hidden details. Hence, we can define advanced network visualization as a necessary feature for financial crime detection.
Risk Points: Integrated regulation technologies can give a risk point by evaluating all internal and external data using artificial intelligence algorithms. The pointing system should be built by computing all customer activities for customer due diligence processes.
Scenario Creation and Alerting: RegTech systems have generally predefined scenarios. Nevertheless, due to the financial criminals use indirect ways, predefined scenarios are not enough to solve their methods. Besides, adding a new scenario is too challenging and costly since contacting the developers of the systems. At this point, the systems that enable users to create their unique scenario provides better results. The more the scenario creation interface is comprehensive (entity variations, dynamic filtering options, etc.), the fewer false positives occur. By saving scenarios, users are notified in case of a match with flowing data, and if it is defined previously, the system interferes with the activity automatically.
Scanning all news sources: Media scanning for persons or persons who are involved in any case is critical for risk analysis. It is possible to determine the positivity or negativity of the news through sentiment analysis by using natural language processing (NLP) as well.
Reporting: Integrated system must consist of a reporting screen without the need for a third-party application to enable users to follow cases. Reporting systems that have interactive dashboards and sharing options also provide reports to be filed regularly, shared, and presented.
Quick suspicious transaction reporting: creating reports for authorities may also be as challenging as the analysis process. If the integrated system can create reports suitable for the format of related authority, it makes reporting processes easier and time-saving for users.
Integrated RegTech systems that comprise all these features enable users to reach the best results in the shortest time and cost-effectively by minimizing false positives. A RegTech solution that has all these features must have the cutting-edge technologies to make the systems autonomous for corporate agility. Since the investments in integrated systems prevent companies from fines, so this invesment will be profitable in the long run.
Datactive RegTech Solution has all these abilities and more! Please contact us for more information.