Financial Crime World

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Countering Financial Crime: A Guide for Payment Service Providers

As Payment Service Providers (PSPs), complying with regulations and preventing financial crimes are top priorities. In this article, we’ll discuss key takeaways, lessons from banks, and additional recommendations to help PSPs effectively counter financial crime and stay compliant.

Key Implications

Regulatory Scrutiny

  • Expect increasing regulatory scrutiny as incidents of fraud and money laundering surface in connection with your business model.
  • Compliance should be an integral part of the processes for designing and approving products, including e-commerce platforms that face risks posed by potentially fraudulent merchants.

Collaboration

  • Work with PSPs, banks, and customers to help them fight financial crime in their own offerings.

Lessons from Banks

Embedding Controls

  • Embed controls within processes and decisions to avoid wasting resources on ineffective approaches.
  • Design controls in proportion to the business model, investing in more effective and efficient controls and frameworks for serving higher-risk parts of the market.

Focusing on Data

  • Define data requirements early and standardize and start capturing these data to make products and services better and improve the customer experience.

Business Case

  • Infrastructure investments should be supported by a clear business case to avoid expensive solutions that are only marginally effective.

Additional Recommendations

Plan for Complexity

  • Establishing a robust and effective infrastructure for managing financial-crime risks is a complex undertaking that should be planned and tracked by dedicated experts.

Extract Better Value from Existing Controls

  • Many anti–financial crime controls can be better utilized, yielding insights into company activities that can be used to qualitatively assess their environmental, social, and governance (ESG) profiles and impact.

By following these recommendations, PSPs can effectively counter financial crime and comply with regulations.