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Combating Financial Crime: A Guide for Payment Service Providers
Payment service providers (PSPs) are increasingly vulnerable to financial crime. To combat this threat, PSPs must adopt a robust and proactive approach that leverages technology and prioritizes customer-centricity.
Leveraging Technology
PSPs should harness the power of advanced technologies such as machine learning and artificial intelligence to enhance their anti-financial crime capabilities.
- Embracing innovation: Leverage cutting-edge technologies to stay ahead of emerging threats.
- Automating processes: Implement automation to reduce manual errors and improve efficiency.
Customer-Centricity and Transparency
Stronger anti-financial crime controls can actually improve customer experience by providing clear requirements, communicating progress, and informing customers of outstanding documents.
- Communicate clearly: Provide transparent information about your policies and procedures.
- Engage with customers: Foster a collaborative relationship to build trust and confidence.
Holistic View of Controls
PSPs should strive for a holistic view of controls to ensure that financial-crime risks are addressed across different risk types and processes.
- Integrate controls: Align anti-financial crime measures with existing business processes.
- Monitor and adjust: Continuously evaluate and refine your control mechanisms.
Sustainable Operating Model
The control mechanisms for countering financial crime will likely have implications for the business model, customers, and internal operations of PSPs.
- Adapt to change: Be prepared to adjust your operating model in response to evolving threats.
- Invest in infrastructure: Allocate resources to support anti-financial crime initiatives.
Lessons from Banks’ Experience
PSPs can learn from banks’ past reactive approaches to establish a robust and effective infrastructure for fighting financial crime.
- Proactive approach: Adopt a proactive stance to stay ahead of emerging threats.
- Collaborate with stakeholders: Engage with law enforcement, regulatory bodies, and industry peers to share best practices.
Considerations for PSPs
When developing their approach to combatting financial crime, PSPs should consider the following factors:
- Embedding controls within processes and decisions
- Designing controls in proportion to the business model
- Focusing on data: Define data requirements early, standardize, and start capturing these data.
- Building a business case for infrastructure investments
- Planning for complexity
- Extracting better value from existing controls
By following these guidelines, PSPs can create compliant-by-design processes with few data or system constraints, design controls in proportion to their business model, and focus on data to enhance their anti-financial crime capabilities.