The cost of global financial crime is estimated to be around $3trn – a sum that could fund the National Health Service in the UK for 24 years.
This stark comparison emphasises it is now more important than ever that banks and financial institutions use the resources at their disposal to obtain the full picture on potential customers.
Key to stopping criminals in their tracks – many of whom are using increasingly sophisticated methods to go unnoticed – is using the latest technology to truly understand a customer, both before onboarding and throughout that relationship.
Using intelligent process automation and artificial intelligence, Encompass gathers and analyses a wealth of information to build a picture of a company or individual in minutes, transforming the know-your-customer (KYC) process.
Discussing the current landscape, Encompass co-founder Roger Carson said: “It’s a significant problem and there are significant sums of money involved.
“Unless people have their guard up or have ways of being able to look at these companies in more detail, they do seem legitimate – hence the amount of money that is able to go around the black economy.
“But not everyone is laundering money. So if we can identify legitimate companies from the data we can allow a bank to focus on organisations that may not be as clean as they should be. The only way you can do that on a consistent basis is to apply technology.”
There is no denying that manually completing KYC processes that are both extensive and meet compliance regulations during customer onboarding can prove time-consuming and costly, largely because of experienced analysts being burdened with low-skilled manual tasks.
However, automation has been shown to reduce the time taken to carry out these duties – and, in turn, increase productivity and ultimately profitability – by 80pc.
This type of analysis, which looks across all sources and gives a more extensive background report of a customer, also establishes patterns to find new ways in which criminals are using the financial system.
The efficiency this brings not only reduces risk but also improves customer experience, making attracting and maintaining clients more likely.
Wayne Johnson, chief executive and co-founder of Encompass, said: “This is about helping to ensure that the institution deeply understands the customer.
“They [institutions] need to search and acquire information from many different sources around the world, so gathering information is time-consuming, analysis is time-consuming and then they have to draw a conclusion. That is where automation and AI [artificial intelligence] can really play a big role in reducing that cost.
“We have developed a platform which combines that automated gathering of information with the AI analysis to empower the analyst to effectively make decisions in a fraction of the [usual] time.”
Looking to the future, Mr Johnson commented that, with financial crime becoming more complex and criminals more resourceful, technology will remain the only answer.
He added: “Criminals are very innovative and will continue to find new ways to use the system. Without the use of technology to counter that, banks are always going to be on the back foot. They have to find ways to implement new methods to lower the costs, get a better result and manage the customer at the same time. That’s what our platform does.”
This article was originally produced and published by Business Reporter. View the original article at business-reporter.co.uk