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Belgian Fintech Firms Face Compliance Challenges in Evolving Regulatory Landscape

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Brussels, BELGIUM - As the financial services industry continues to navigate an increasingly complex regulatory landscape, Belgian fintech firms are facing unique challenges in balancing innovation with compliance.

The Rising Tide of Anti-Money Laundering Fines

According to experts, the rising tide of anti-money laundering fines worldwide is a major concern for financial institutions. Over $2 billion in penalties were handed out in 2022 alone. In Belgium, where the financial sector is subject to strict regulations, fintech companies must navigate the complexities of MiCA, AML Act 2020, and PSD3.

The Principle of Proportionality

“The principle of proportionality should guide this balance,” says Franck Manoukian, Chief of Staff at RegSharp Audit & Consulting. “Compliance is a living program that requires a mix of internal and outsourced control, regulations monitoring, and training plans.”

Holistic Financial Crime Management

Iain Armstrong, Regulatory Affairs Practice Lead at ComplyAdvantage, emphasizes the need for holistic financial crime management and collaboration to combat evolving threats and regulatory pressures.

The Convergence of Fraud and AML Teams

“The convergence of once-separate Fraud and AML teams into multi-skilled functions is a testament to the industry’s need to innovate in combating evolving threats and regulatory pressures,” says Armstrong.

Technological Innovation: A Key to Addressing Compliance Challenges

Technological innovation can play a crucial role in addressing compliance challenges, according to Armstrong. “AI, applied thoughtfully and with appropriate oversight, can be a powerful tool for combating financial crime and for helping companies stay on top of regulatory challenges.”

Transforming Costs into Communication Investments

Historically viewed as a cost center, compliance is now seen by forward-thinking companies as an opportunity to leverage technology and streamline processes, accelerating time-to-market and transforming costs into communication investments.

The Road Ahead for Fintech: Embracing Innovative Technologies

In Belgium, fintech companies must stay ahead of financial crime by deploying solutions that can easily adapt to changing environments and new regulatory requirements. Armstrong emphasizes the importance of managing financial crime holistically and encouraging collaboration.

Detecting Sophisticated Fraud Scenarios

“A recent survey conducted by ComplyAdvantage found that 61 percent of firms have seen an increase in the number of payment fraud alerts in the last year,” says Armstrong. “To detect the most sophisticated fraud scenarios and anticipate the methods that will be used tomorrow by fraudsters, companies must deploy solutions that can easily adapt to the changing environment and new regulatory requirements.”

Conclusion

The road ahead for fintech is clear: embracing innovative technologies and transforming challenges into opportunities for growth and stability. “Guarding against financial crime is not just good business but also good for business,” concludes Armstrong.