The regulatory landscape is a global phenomenon with a consistent pattern. Especially with start-ups and the Fintech industry, it’s common to implement automated, real-time, AI-driven digital solutions to minimize financial crime risks and protect companies from KYC and AML non-compliance damages.
Following regulatory compliance helps businesses detect and prevent violations. Many argue that should be an ongoing process. In practice, some companies choose different scenarios. The lack of compliance culture remains a common issue, leading to massive fines and lawsuits.
Significance of KYC
As per United Nations, only 1% of illicit funds are detected by authorities, and $2 trillion is laundered every year. The pandemic hasn’t slowed the value of charges, and regulators focus on Know Your Customer (KYC) and Anti-Money Laundering (AML) failings. According to the “AML Fines H1 2021 Report“, this is a growing tendency, as financial institutions were fined $1,972,797,500 for regulatory non-compliance requirements in 2021.
KYC safeguards companies in the fight against money laundering, terrorist financing, corruption, and fraud. This procedure is required to establish one’s identity for security reasons, such as registering on an e-payment service website, opening a new bank account, asking for a loan or insurance. Since many industries have gone digital in recent years, this form of identity verification can be implemented anywhere – if a company has money flowing through, it will need to comply with mandatory KYC regulations.
The real question is if society is too dependent on technology; according to Domantas CIulde, the CEO of iDenfy, the European FinTech startup that combines identity verification, fraud prevention, and compliance services into one platform, only automated security measures can control, mitigate and prevent money laundering in an efficient, secure way. That’s why companies who choose the path of inadequate risk assessment also put themselves in danger of facing regulatory action.
Capgemini Research Institute’s survey suggests using automated solutions to avoid losses and upgrade cybersecurity. One of the key takeaways – 69% of organizations think AI is necessary to respond to cyberattacks. According to iDenfy’s CEO, due to this rapidly evolving digital sphere, security systems that aren’t driven by technology slowly become a form of outdated, ineffective KYC and AML solutions. As a result, the company focuses on perfecting its KYC expertise, and to this day, it is best known for the fully automated identity verification engine.
How AI-powered online security is shaping businesses?
The AI-powered online security market is in demand, as more companies leave traditional, non-automated security measures and paper-like methods behind. Cogito, a company that provides real-time KYC services to AI-enabled businesses, agrees with the technology-based tactics. According to the automated solution enterprise, its KYC and Identity Verification operations ensure compliance with regulations and detect suspicious activity to prevent fraud, all thanks to artificial intelligence. According to the enterprise, to support the development of this game-changing technology, AI will continue to spread in many fields, such as healthcare, agriculture, or even the automotive industry.
“There’s no doubt that artificial intelligence is transforming cybersecurity. This powerful tool identifies potential threats and prevents dangers, such as data breaches. Without technology-dependent solutions, companies depend on inefficient manual methods without technology-dependent solutions, leaving enormous security gaps. In the fast-paced regulatory landscape, you need to stay ahead of the cybercriminals and choose safe, AI-powered digital solutions.” – expressed Rohan Agrawal, Co-Founder & CEO at Cogito.
