The focus on compliance has accelerated, globally, after the global financial meltdown. However, Indian banks, once admired for their strong processes and sound fundamentals, are now increasingly getting mired in controversies related to the fundamental compliance issues. RBI fined Airtel payments bank ₹50 million for violating the Know Your Customer (KYC) guidelines. ICICI Bank was fined for non compliance with security maturity norms.
At most large banks, the compliance processes designed to fight financial crimes such as money laundering have grown so complex as to be barely manageable.
Most of the banks were using legacy software before they migrated to the Finacle, Flexcube or Bancs. During the data migration from legacy to one of these software banks have gone through multiple iterations, multiple handovers and multiple versions. These data migrations have resulted into low-quality and unstructured data which resides within most banks without being fully integrated with other important AML and compliance solutions. The low quality data results in
- Non compliance of the guidelines laid down by the RBI for creation of the customer id,
- Customer Names in the databases of the banks containing special characters.
- Multiple addresses containing only India as the address
This type of irregularities lead to difficulties with client reference data and documentation, as well as data extraction or aggregation from flawed databases. Today, the compliance processes and customer data migrations incorporate a high level of manual work for screening, alerts processing and other activities. From core banking the data needs to be exported to other specialised compliance software.
In order to effectively handle the problem of tackling the money laundering, kyc and other compliance issues a strong financial crimes compliance strategy now virtually requires some form of partnership with specialist regulatory technology firms, popularly known as “regtechs,” which have developed expertise that most banks would find too costly or time-consuming to develop in-house.
Regtech tools developed by Riskpro help the bankers to identify the potentially risky accounts before the bank is exposed to risk.
Regtechs range from know-your-customer or anti-money-laundering specialists such as Riskpro, to customer on-boarding and workflow process firms.
Regtech tools offered by Riskpro, seeks to monitor transactions that take place online in real time in order to identify issues or irregularities in the digital banking space. Any exception observed is notified to the bank to analyze and determine if a fraudulent activity is taking place. Banks that identify potential threats to financial security early on are able to minimize the risks and costs that are associated with lost funds and data breaches.
Riskpro offers the Application Programming Interface (APIs) to the database of Heightened Risk Individuals which can be easily embedded in the core banking technology
API is the set of programming instructions and standards for accessing a Web-based software. Riskpro help the clients to build the add-on tools to resolve the data quality problem with the help of the underlying data on the heightened risk individuals and entities.
Check out Riskpro API documentation on accessing the data related to Politically Exposed Persons in India.
Biznexxus is the database of heightened risk professionals which compiles the range of data from politically exposed persons to the data of financial defaulters. Regtech companies like Riskpro offers the APIs for accessing their database from the native software of the bank. APIs help the banks to access the data of heightened risk entities from the software like Bancs, Financle or Flexcube. APIs help the banks to avoid exporting the data to yet another compliance software to check the potentially risky accounts without leaving the core banking solution.