The use of RegTech in fighting financial crime

Igor Sumkovski
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Igor Sumkovski: Senior Manager, Sanctions Policy & Complex Advisory, Legal & Regulatory, Santander, UK

Journal of Financial Compliance, 2023, vol. 6, issue 2, 138-147

Abstract: The fast pace of technological change and the ever-evolving regulatory landscape create a unique environment in which the financial institutions (FIs) are expected to perform at their maximum while remaining compliant with complex regulations. The compliance complexity ultimately results in higher costs for FIs and banks specifically, as this often means increased numbers of compliance staff and investing in new technologies. However, while investing in a sophisticated RegTech solution may seem a viable option for addressing the complex compliance requirements, in practice the situation is much more complicated. Implementing the latest RegTech solution in a traditional bank, particularly in one with a history of mergers and acquisitions where the legacy systems may still be in use, and where the data is held on different and sometimes incompatible platforms, is a good example of the complexities that arise in the decision-making process. This paper focuses on the practical challenges faced by a traditional bank when considering the implementation of a RegTech solution and also explores how RegTechs and banks can work together in order to overcome these challenges by better understanding each others' perspectives.

Keywords: financial crime; AML; sanctions; compliance; screening; RegTech; machine learning; AI (search for similar items in EconPapers)
JEL-codes: E5 G2 K2 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:aza:jfc000:y:2023:v:6:i:2:p:138-147

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