San Marino’s Digital Banks Face AML/KYC Challenges Amid Rapid Growth

The Dark Side of Technological Advancements

As the San Marino banking sector undergoes digital transformation, offering lower costs, 24/7 connectivity, and enhanced client experiences, financial institutions are grappling with the challenges posed by technological advancements. The rise of cyber-enabled money laundering and other illicit activities is forcing banks to balance their drive for innovation with the need to robustly enforce Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations.

Challenges in AML/KYC Compliance

Digital banks in San Marino, particularly those targeting millennials and generation Z’s, are struggling to reconcile the imperative of smooth onboarding experiences with the often burdensome demands of AML/KYC compliance. The traditional methods used for verifying customer identities and detecting potential illicit activity can create friction in the onboarding process, leading to:

• Increased costs
• Higher drop-off rates
• Operational inefficiencies

Seeking Technological Solutions

In order to meet regulatory expectations while preserving the seamless digital experience that their customers have come to expect, San Marino’s digital banks are seeking out technological solutions that can effectively integrate AML/KYC processes without compromising the customer journey. By prioritizing a user-centric approach to AML compliance, these institutions can:

• Reduce costs
• Enhance operational efficiency
• Maintain a competitive edge in an increasingly digital banking landscape