FinTech Paves way for a Stronger AML Program

FinTech Paves way for a Stronger AML Program

FinTech is not a new term in the rapidly growing industry that is taking the world by storm. Heading in the direction that it is currently, is all set to cross the 40 billion mark by 2020, according to industry insights!

Rapid advancements in financial technology, have spurred a new direction of business processes and transaction undertakings. Redefining how the society at large interacts and carries out payments in a manner that are not only safe but also ‘All Clear’ from global regulatory AML practices.

You might be wondering. How FinTech plays a part in an effective AML program, and safeguarding practices and standards?

Importance of AI in FinTech

Over the course of the last decade, the finance industry has seen rapid growth in customer onboardings and a tightening regulatory environment. As technology improved, so did the threat associated with money laundering from all the influx of people. Legacy financial service providers were quick to realize that, the industry is changing and out the date, practices were no longer effective in curtailing money laundering through their services. The answer? – Incorporate Artificial Intelligence in financial technology solutions.

Artificial Intelligence caters the industry with certain factors that cannot have been previously addressed through dated practices and cumbersome manual processes.

  • Scalable Application
  • Rule Base Configurability
  • Automation led Faster Repetitive Processes
  • Consisting of Operation Standards & Result Accuracy

AML Mandation | High-Risk Sectors

As regulatory environments tightened to prevent money laundering to take place, the requirement for tighter AML compliance regulations arose exponentially. To the point, that they are now in a compulsory state of implementation, through dedicated ‘Know Your Customer’ procedures mandated by regulatory authorities. The absence of such implementations could lead to financial repercussions for a business, in the eyes of global regulatory authorities. Since the environment surrounding financial service is considered a very high-risk sector, AML does not just constitute written policies but now seeks a ‘Risk & Rule-Based’ approach. 

Such a ‘Risk & Rule-Based’ approach can only be employed through a dedicated AML service that runs off an effective AI solution at its core. Not only does a system with AI functionality provide better services but also address the factors listed above with great ease and accountability.    

The RegTech AML of Today

Those hybrid solutions catered today are RegTech solutions that service the FinTech industry and help businesses to comply with global regulatory directives.

Scalable KYC services allow for the AML service to be tailored according to client expectations and business requirements. There is no ‘one solution fits all’, where KYC software today needs to exhibit some sort of configurability. This allows a solution to be configurable against various risk-based approaches that regulation might bring, from each of its iterations.

A FinTech solution functions to automate processes and speed up repetitive processes, in order to provide a consistency of results and its very accuracy.


Combating terrorist funding, money laundering, cryptocurrency tax crimes, and financial crimes is needed now more than ever. Inclusion of a hybrid of artificial and human intelligence in the system has allowed businesses and financial institutions to secure their assets, increase revenues and hence, profits, by employing appropriate methods of user verification. To truly comply with ‘Know Your Customer’ (KYC) policies, identity verification and screening against AML and criminal watch lists, databases, and PEPs lists is a must.

Rest assured, RegTech and FinTech are here to stay, holding such a profound effect on the global society from a regulatory and functional point of view. Both these aspects will continue to evolve and improve while complementing one another to establish a uniform and strengthened AML solution for a greater AML risk-based program.

Leave a Reply

Your email address will not be published. Required fields are marked *