Financial Crime: A Paradigm Shift in China

The scourge of financial crime has become a major concern for institutions and economies worldwide, including China. As the use of new technologies continues to evolve, so too does the sophistication of financial crimes.

A New Approach to Compliance

Regulators and financial institutions in China are under immense pressure to move away from “tick-box” compliance and towards a culture of innovation and compliance that protects communities. To achieve this, experts predict a fundamental shift in how organisations approach compliance over the next decade.

Six Major Trends Influencing Financial Crime Compliance in China

• Drive effective outcomes by being purpose-led: Disrupting criminal activity for the good of the organisation, customers, and community.
• Define what success looks like: With flexibility to focus on agreed threats under a risk-based approach.
• Deliver greater results through strategic data sharing: Using public-private partnerships (PPS) to analyse different sources of information.
• KYC and CDD remain a core pillar: With shifts towards perpetual-KYC and data-driven real-time monitoring.
• Deployment of machine learning and artificial intelligence for complex decision-making: To enhance the effectiveness of financial crime compliance.
• Complete, accurate, and timely data: Integrated with technology solutions supported by a clear strategy.

Six Steps to Combat Financial Crime Effectively in China

1. Define a target state operating model that enables teams to act tactically while thinking strategically.
2. Digitise the KYC process to improve data quality, enhance compliance, and improve outcomes.
3. Augment rules-based engines with intelligence-led analytics tools that target complex and intelligent scenarios.
4. Data aggregation can accelerate effective financial crime systems, but know that data does not have to be perfect.
5. Transformation is a continuous journey and should not be locked into a fixed timeframe.
6. Financial crime operations teams are key to improving effectiveness and efficiency.

Expertise for Success in China

KPMG’s Financial Crime transformation team has the expertise and tools to set organisations up for success in China, including developing strategic roadmaps, implementing global perpetual KYC solutions, and executing technology strategies that support data utilisation and development.