Financial Crime World

Fintech Compliance Challenges in Malaysia: Uncovering the Unprecedented AML Dilemmas

The fintech space in Malaysia is facing unprecedented challenges when it comes to anti-money laundering (AML) compliance, according to experts. The rapid growth of online transactions and economic downturns have led to a surge in AML-related issues, posing significant risks to fintech companies.

High-Quality Data for AI-Based AML Technology

Fintech companies must strike a balance between onboarding customers quickly and preventing malicious actors from taking advantage of their services. Governance becomes a critical component of success, requiring a shift to a more robust governance model that adapts to the company’s growth.

  • Fintech firms need high-quality data to produce accurate results from AI-based AML technology.
  • Companies must balance onboarding customers quickly with preventing malicious actors from taking advantage of their services.

Finding the Right Talent to Scale AML Operations

Fintech outfits often face a shortage of specialized workers with financial crime compliance expertise. Outsourced solutions can help balance increasing alert volumes or customer growth with regulatory scrutiny.

  • Fintech firms struggle to find specialized workers with financial crime compliance expertise.
  • Outsourcing solutions can help fintechs balance increasing alert volumes or customer growth with regulatory scrutiny.

Rise of Online Fraud and Impersonation Scams

Financial institutions and fintechs must focus on awareness and education to prevent customers from falling victim to these scams. The report highlights the rise of online fraud, particularly impersonation scams that are difficult to detect.

  • Financial institutions and fintechs must focus on awareness and education to prevent customers from falling victim to impersonation scams.
  • Online fraud and impersonation scams pose significant risks to fintech companies and their customers.

Digital Assets and Cryptocurrencies

Digital assets and cryptocurrencies pose another challenge for fintech firms. As regulations evolve globally, companies must create and review their AML risk-rating methodology to consider the nuances of different virtual assets.

  • Fintechs must adapt to evolving global regulations on digital assets and cryptocurrencies.
  • Companies must create and review their AML risk-rating methodology to consider the nuances of different virtual assets.

Sanctions

Sanctions are another area of concern, with fines resulting from breaches posing a significant risk to fintechs. In 2022, AML teams faced challenges related to Russia-sanctions following the conflict in Ukraine, and this trend is expected to continue in 2023.

  • Fines resulting from sanctions breaches pose a significant risk to fintech companies.
  • AML teams must stay vigilant and adapt to evolving sanction regulations.

Regulatory Changes and Requirements

Regulatory changes and requirements are constantly evolving alongside financial crime threats. Fintechs must remain agile and collaborative with regulators to ensure meaningful outcomes.

  • Fintechs must stay alert, agile, and innovative while navigating the evolving regulatory landscape.
  • Companies must balance customer service with compliance requirements using digital identities and innovative solutions.

Practical Solutions and Strategies

Refinitiv provides comprehensive solutions to help fintech firms tackle AML and KYC-related challenges and meet evolving regulatory obligations. The company’s targeted solutions include risk screening, due diligence, identity, and account verification, as well as digital onboarding.

To learn more about practical solutions and strategies recommended by the fintech community to futureproof AML compliance operations, download the full Refinitiv report.

Conclusion

Fintechs in Malaysia must stay alert, agile, and innovative while navigating the evolving regulatory landscape and balancing customer service with compliance requirements. By understanding the key trends and issues covered in this report, fintech companies can better prepare themselves for the challenges ahead and futureproof their AML compliance operations.