the full picture, this week – 04 October 2019

by | Oct 4, 2019 | All Blog Posts, the full picture this week, Featured

Let us put you in the picture this week, as we round-up and react to the latest news from the financial crime compliance and technology sectors.

This week, research shows that more than half of financial services leaders are concerned that their organisation could be left behind by technological innovation.

Elsewhere, there’s the suggestion that a skills shortage is the biggest hurdle to increasing the adoption of artificial intelligence (AI) in the UK.

These issues, and more from around the globe, give us plenty to dive into for your Full Picture, This Week…

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how KYC automation solutions can help businesses prepare for 6MLD

The fight against financial crime will step up a gear with the introduction of the EU’s Sixth Money Laundering Directive (6MLD) next year.

Placing more emphasis on punishments and changing the way that offences are defined, the Directive comes on the back of the Fifth Money Laundering Directive (5MLD) and requires organisations to have much tighter procedures in place when it comes to entering into relationships and monitoring entities.

Find out what we can expect and how Know Your Customer (KYC) automation solutions can help businesses ensure they are ready ahead of the implementation date.

financial services leaders fear being left behind by innovation

More than half (56 per cent) of financial services leaders are concerned that their organisation could be left behind by the pace of technological innovation.

the full picture, this week - 04 October 2019 | left behind | Encompass blogA survey of 800 business leaders and 3,000 consumers across the UK and the Republic of Ireland, by Fujitsu, found rising demand for financial services companies providing a wider range of digital services, with a third of people saying that the way they bank has changed in the last five years.

Whilst the view of the role of technology within financial services is a positive one, more than a third of business leaders said that keeping up with regulation and governance and protecting themselves from cyber attacks and data theft (30 per cent) are major threats to their organisation’s success.

Ian Bradbury, financial services chief technology officer at Fujitsu UK & Ireland, said:

The country’s financial services landscape has undergone incredible changes in the last five years; the pace at which new technology is transforming the way banks and insurers interact with their consumers is tremendous.

 

It’s not surprising that many in the industry feel as if they haven’t put the right foundations in place to take advantage of all that technology has to offer for their business; and their customers. But they are clearly open to the potential of technology and are open to adopting new ways of serving their customers, so now is the time for them to put the right plans in place to ensure they are prepared to tap into the innovations to come.

the Encompass view

There can be no denying that the financial services landscape has changed significantly in the last few years, with technology being a key driver. The way people bank and the kind of experience they expect has transformed as a result of the increase in the array of digitally-focused services that we now see.

The industry and its key players have had to expand and adapt to what customers need at a point in time, which is currently quick and easy access to solutions. The evolution of the digital age and the way consumers and businesses operate has meant there is more of an onus than ever on firms to offer efficient and innovative options – or face losing out.

When it comes to keeping up with regulations, which is a concern for some of the business leaders surveyed, we know that Know Your Customer (KYC) is a key area of focus for savings, but this cannot come at the expense of customer experience or meeting regulatory obligations.

KYC automation, like that from Encompass, addresses this challenge, ensuring businesses are able to demonstrate compliance to regulators and also provide the fast, reliable and effective service that the market demands.

Firms must keep up with the developments dictated by the advancements in technology, laying the right foundations and building it into plans that will best serve their customer base, or they will end up lagging behind more forward-thinking competitors.

the Encompass view

There can be no denying that the financial services landscape has changed significantly in the last few years, with technology being a key driver. The way people bank and the kind of experience they expect has transformed as a result of the increase in the array of digitally-focused services that we now see.

The industry and its key players have had to expand and adapt to what customers need at a point in time, which is currently quick and easy access to solutions. The evolution of the digital age and the way consumers and businesses operate has meant there is more of an onus than ever on firms to offer efficient and innovative options – or face losing out.

When it comes to keeping up with regulations, which is a concern for some of the business leaders surveyed, we know that Know Your Customer (KYC) is a key area of focus for savings, but this cannot come at the expense of customer experience or meeting regulatory obligations.

KYC automation, like that from Encompass, addresses this challenge, ensuring businesses are able to demonstrate compliance to regulators and also provide the fast, reliable and effective service that the market demands.

Firms must keep up with the developments dictated by the advancements in technology, laying the right foundations and building it into plans that will best serve their customer base, or they will end up lagging behind more forward-thinking competitors.

Ed Lloyd | EVP Global Head of Sales & Marketing, Encompass

skills shortage ‘biggest hurdle’ to AI adoption

the full picture, this week - 20 September 2019 | Benoit Coeure, European Central Bank | encompass blogThe adoption of AI and automation technologies in the UK is still being stunted by a lack of digital skills in financial businesses, according to research.

Rainbird surveyed senior decision-makers in enterprise organisations, finding that the main reason behind financial services firms not implementing AI is a shortage of talent in their workforce for handling automation processes.

While this was the overall biggest barrier to adopting AI in the UK, when broken down into sectors, the data highlighted a number of different concerns across business functions.

Within professional services, a lack of regulation was cited as a key barrier to AI adoption (87.5 per cent), however in financial services it was technology’s lack of transparency that inhibited adoption (88.8 per cent), whereas within the IT industry a shortage of talent has become a major hurdle (91.7 per cent).

Despite these barriers, 81 per cent of those surveyed revealed that their organisation planned to increase investment in AI over the next five years. Of those planning to increase spend on automation technologies, 22 per cent suggested this investment would be significant.

The financial sector is set to be the biggest adopter, with 94 per cent of those surveyed planning to increase investment in AI over the coming years.

PayPal first foreign company to win Chinese payments licence

the full picture, this week - 04 October 2019 | PayPal | Encompass blogPayPal has become the first foreign company to acquire a payments licence in China.

Guofubao (Gopay), a Chinese online payments company, confirmed that the central bank had approved PayPal’s acquisition of a 70 per cent stake in the company for an undisclosed sum.

PayPal’s acquisition gives it access to Gopay’s various payments licences, which allow it to offer online, mobile and cross-border renminbi payments and to issue debit cards.

“China’s domestic payments industry has great opportunities but the obstacles that foreign companies will face are not small,” wrote Dong Ximiao, chief analyst at Zhongguancun Internet Finance Institute, in a briefing note.

Mr Dong cited the WeChat-Alipay oligopoly as a significant challenge, as well as the typical domestic payments fee rate of 0.5 per cent, which is lower than the international average of 1.5 to 2 per cent.

The Financial Times has more [subscription required].

news in brief

The banking industry stopped £820 million of unauthorised fraud in the first half of 2019 – equivalent to £4.5 million a day – according to new figures from UK Finance. New data from the industry association found that financial services institutions succeeded in preventing 14 per cent more cases of unauthorised fraud in the first six months of 2019 than last year.

HM Revenue and Customs (HMRC) has published a list of businesses that have not complied with the Money Laundering Regulations 2017 (MLR 2017) for the tax year 2019 to 2020. Get the latest.

Cyber security risk and AI are amongst the top business concerns of compliance and procurement professionals. A ComRes poll of 630 compliance and procurement professionals for Dun & Bradstreet found that respondents were increasingly less confident of their ability to manage third party relationships.

Nationwide Building Society is working with five fintech startups in a collaboration space in London’s Covent Garden as part of its £3 million Open Banking for Good challenge. Find out more.

European lawmakers have demanded that rules designed to clamp down on money laundering and terrorist financing be better enforced across the bloc, saying that improved coordination is needed. Read more [subscription required].

The Monetary Authority of Singapore (MAS) has identified IT supply chains as a critical weakness in the defences of major banks. The central bank’s Cyber Security Advisory Panel (CSAP) notes the growing frequency of attacks on IT supply chains as a means to circumvent the cybersecurity walls put in place by banking institutions. Read more.

key learns from Sibos 2019

the full picture, this week - 04 October 2019 | SIBOS London 2019 | Encompass blogBilled as “the most ambitious Sibos ever”, this year marked a first for the event as London’s ExCel played host to 8,000 business leaders, decision makers and experts at the annual conference organised by SWIFT for the financial industry.

With access to a programme packed with hundreds of speakers and conference sessions, exhibitors and a number of networking events, professionals gathered from 23-26 September as they heard about the key issues facing those working within the landscape and debated what we can expect in the future.

Here, our Head of Partnerships, Nick Ford, shares his key learns.

meet the Encompass team

The Encompass team will be out and about across the globe, participating in key industry events.

Money 20/20 | Sun 27 – Wed 30 October | The Venetian, Las Vegas

Money20/20 is the doorway to the epicenter of the payments, banking, fintech and financial services ecosystem. This global event brings together visionaries and innovators from across the spectrum who are inventing new ways to spend, manage, save, borrow, share and protect money. We will be attending Money 20/20 this coming October and would love to see you there.

View all our upcoming events here.

The world of Know Your Customer (KYC), compliance and financial crime never sleeps, and if your challenges are keeping you up at night let us help. Encompass intelligently automates information and news discovery for KYC requirements for onboarding ongoing monitoring.

Driven by your internal policies, our platform automatically constructs corporate ownership structures, discovers beneficial owners, and in minutes screens all relevant entities and persons for regulatory, reputational and financial risk.