ComplyAdvantage: Using tech & talent for finance compliance

Comply Advantage believes more hiring isn’t a scalable solution alone, with AML fines surging 50% in 2022
In its latest report, ComplyAdvantage details how financial bodies can leverage tech and talent to remain financially compliant and mitigate adverse media

Compliance software company ComplyAdvantage has released its latest report, detailing ways financial institutions can and should leverage both tech and talent to better their financial compliance and mitigate the detrimental effects of adverse media coverage. 

ComplyAdvantage: A growing budget to mitigate adverse media and stay compliant

Per the report, ComplyAdvantage found that 90% of financial organisations expect their adverse media budgets to increase over the next 12 months. 

This comes as data becomes more abundant and complex, with many firms finding their current negative news screening tools are labour-intensive and time-consuming, resulting in potential risks not being identified. 

ComplyAdvantage notes the solution to this, currently enacted by 56% of surveyed firms, is to increase the size of their compliance staff. 

This policy shows no sign of waning across the board either, with 50% of firms planning to hire between 21-40 new senior compliance staff in the next 12 months. 

However, ComplyAdvantage believes more hiring isn’t a scalable solution alone, with AML fines surging 50% in 2022, with banks paying out over US$2bn in penalties despite having the most extensively staffed compliance divisions. 

ComplyAdvantage Global Head of Regulatory Affairs, Andrew Davies, says: “The reality is that hiring alone isn’t a scalable solution and won’t solve data-related problems.

“While staff that possess the most in-demand skills of governance, reporting, and data science can undoubtedly add value, increasing analyst headcount is a workaround I repeatedly see in the hopes that staffing up will reduce alert backlogs over time.”

The data suggests this isn’t enough, though. So what should financial organisations do? 

ComplyAdvantage: Leveraging tech to mitigate human error-prone tasks

According to ComplyAdvantage, the key is to not only scale up compliance staff but also invest in advanced screening solutions, to make the best use of their new talent who can then operate with maximum efficiency. 

One of the primary ways an adverse media solution can support compliance staff is by removing repetitive tasks, which not only serves to minimise errors but also boost employee morale. 

In fact, of the financial organisations surveyed by ComplyAdvantage, 53% saw improved morale as the number one benefit of integrating adverse media solutions. 

Another 49% said such technology does – or would – allow them to apply dynamic risk scoring, while 47% said it would reduce costs driven by removing repeated screenings of false positives. 

ComplyAdvantage Regulatory Affairs Practice Lead, Alia Mahmud, adds: “Businesses preparing for the future of work must understand the changing technology preferences among their workforce if good levels of employee morale and low staff turnover rates are to be maintained. 

“This will be particularly pertinent to firms looking to hire junior or mid-level staff and should be considered when pitching for longer-term investment.”

Furthermore, adverse media solutions can also help better integrate data flows, breaking down tech and talent siloes. 

Some 53% of those surveys believe their current adverse media tools are not well integrated, which is where a comprehensive adverse media solution can help. 

Mahmud continues: “By consolidating disparate data sources and seamlessly integrating the solution into a broader financial crime architecture, firms can create a comprehensive and centralised view of individuals or entities, uncovering hidden connections and nascent patterns in fraudulent behaviour.

“This will allow for more accurate and efficient adverse media screening.”

The reduced time to complete tasks, alongside added value insights results in more time being allocated to driving the longer-term vision from all faculties of a financial organisation. 

This is where the problem of not integrating adverse media solutions becomes cyclical; with 56% of organisations yet to employ one saying it is because of a lack of long-term strategy that has held them back from doing so.

With this in mind, it seems the first step to levelling up compliance risk and adverse media tools is to implement an adverse media solution, freeing up an organisation’s ability to work on future strategies and long-term growth aims. 

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For more insights from FinTech Magazine, you can see our latest edition of FinTech Magazine here, or you can follow us on LinkedIn and Twitter.

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Please also take a look at our upcoming virtual event, FinTech LIVE London, coming on 8-9 November 2023.

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