Regulatory Minimums: A Recipe for Disaster?
Experts are sounding the alarm that the current regulatory system to prevent financial crime is woefully inadequate and may even be contributing to the problem.
The “Gamekeeper” Mentality
According to a recent study, many employees tasked with preventing financial crime are operating under a “gamekeeper” mentality, adhering strictly to regulations and guidelines without questioning or challenging the status quo. This approach leaves them ill-equipped to identify and respond to new threats.
The Need for Proactivity
In contrast, a “poacher” mentality, which involves thinking outside the box, being proactive, and adapting to changing circumstances, is seen as essential for effective prevention of financial crime. However, this approach requires a level of creativity, courage, and independence that may be lacking in many organizations.
The Importance of Employee Education and Training
The study also highlights the importance of employee education and training, suggesting that informed and educated employees are better equipped to identify and prevent financial crime. Furthermore, it emphasizes the need for IT systems and support services to aid in the detection and prevention of criminal activity.
Complacency and Regulatory Minimums
Despite these findings, many organizations remain complacent, relying on a compliance-based approach that focuses solely on meeting regulatory minimums rather than taking proactive measures to prevent financial crime. “The quote at the beginning of this article is not accidental,” says Damian, an analyst. “In the absence of effectiveness, further regulations and interpretations will continue to appear, entailing additional costs for institutions.”
A Call for Bold Action
The study concludes that bold actions taken by obligated institutions, going beyond regulatory minimums but remaining within the law, could ultimately be more effective and cost-efficient in preventing financial crime.
Cooperation with Sii: A Solution?
For those seeking support in ensuring compliance with regulations while optimizing costs, Sii offers a range of services in the area of Know Your Customer (KYC), Anti-Money Laundering (AML), and Countering Financing of Terrorism (CFT).
Services Offered by Sii
With over 250 experts at their disposal, Sii provides professional support for companies looking to gain control and transparency in KYC/AML processes. Their services include:
- Automation of processes
- Adjusting processes to regulations required by national and European institutions
- Compliance with the highest security standards confirmed by ISO 27001 and ISO 9001 certificates
Experience and Expertise
With experience in the banking and insurance sectors, Sii offers process and cost optimization through a combination of business know-how and technology. For more information on how Sii can support your company in preventing financial crime, contact them today.