the full picture, this week – 18 October 2019

by | Oct 18, 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 time, we bring the news that UK financial services firms are leading the way when it comes to global efforts to automate processes through technology such as robo-advisers.

Elsewhere, The European Banking Authority (EBA) has signaled its intention to prioritise Anti-Money Laundering (AML) next year.

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

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UK firms leading the way with efforts to automate processes through technology

the full picture, this week - 18 October 2019 | UK firms leading the way with efforts to automate processes through technology | Encompass blogThe UK’s financial services firms are leading the way in global efforts to automate processes through technology such as robo-advisers, according to PwC.

A global survey of 248 financial services organisations by the professional services firm found that the UK is ahead of the curve when it comes to implementing robotic process automation (RPA) services, with 37 per cent of firms successfully deploying such tools, compared to 28 per cent globally.

However, while automated services are taking root in the landscape, the survey showed that human interaction was considered a greater priority for UK firms than for their global counterparts.

Furthermore, businesses were found to be less confident than their global peers that they are meeting customer expectations with the right balance of personalised digital contact versus direct human contact. Of these, 27 per cent either strongly or somewhat disagreed that they have the right balance, compared to 13 per cent globally.

In addition, the UK is predicted to be among the leading countries for fintech growth in the next two years, alongside the US and China.

The survey found that 44 per cent of its financial services incumbents have already embedded fintech fully into their strategic operating model, compared to 48 per cent around the world.

27 per cent of organisations have also incorporated emerging tech into the products and services they sell.

the Encompass view

What these findings illustrate is that, in the UK, more companies than ever before are seeing the benefits of automation – and putting the time and resources required into utilising it in a way that demonstrates its value.

Automation has become key for many in financial services, with RPA being central to business’ strategies across the UK, as the figures show.

From bringing cost and time savings to improving client experience, it is a tool that is vital to continuing relationships and brand reputation, as well as making it easier to ensure compliance – all critical in an increasingly competitive market.

The survey also highlights UK fintech growth, which is no surprise, as the UK has long been a leader in the space, and we know the sector is attracting investment at a record rate. The inaugural meeting of the ‘UK FinTech National Network’ last week in Glasgow was yet another signal of the strength of this sector, as Innovate Finance, FinTech Scotland and all of the regional FinTech associations met for the first time to discuss how the UK FinTech proposition can be strengthened on the global stage through national cooperation.

The fact that the UK has a regulatory regime that embraces innovation has been key to the industry progressing and attracting top talent and what is important now, is that those within the industry do not become complacent – things must be enhanced and evolved in order for growth to accelerate.

the Encompass view

What these findings illustrate is that, in the UK, more companies than ever before are seeing the benefits of automation – and putting the time and resources required into utilising it in a way that demonstrates its value.

Automation has become key for many in financial services, with RPA being central to business’ strategies across the UK, as the figures show.

From bringing cost and time savings to improving client experience, it is a tool that is vital to continuing relationships and brand reputation, as well as making it easier to ensure compliance – all critical in an increasingly competitive market.

The survey also highlights UK fintech growth, which is no surprise, as the UK has long been a leader in the space, and we know the sector is attracting investment at a record rate. The inaugural meeting of the ‘UK FinTech National Network’ last week in Glasgow was yet another signal of the strength of this sector, as Innovate Finance, FinTech Scotland and all of the regional FinTech associations met for the first time to discuss how the UK FinTech proposition can be strengthened on the global stage through national cooperation.

The fact that the UK has a regulatory regime that embraces innovation has been key to the industry progressing and attracting top talent and what is important now, is that those within the industry do not become complacent – things must be enhanced and evolved in order for growth to accelerate.

Alex Ford | VP Operations, Encompass

European Banking Authority to make AML a 2020 focus

https://www.encompasscorporation.com/wp-content/uploads/2019/10/the-full-picture_18-October-2019_European-Banking-Authority.pngThe EBA has signaled an intention to prioritise AML and work towards an integrated EU data hub in 2020.

The 2020 Work programme covers 37 activities across six strategic areas, plus two horizontal proprieties for policy work.

Areas of focus will include supporting the development of the risk reduction package and the implementation of global standards in the EU, as well as making AML a real priority for the bloc.

The EBA said money laundering and terrorist financing are key risks for both AML/CFT and prudential supervisors, but that a European Supervisory Authority (ESA) review will deliver on this priority.

A statement from the EBA said:

Following its implementation, the EBA will establish a new permanent committee that brings together national AML supervisory authorities; will foster the strong and convergent implementation of all relevant policies through specific and thematic peer reviews of NCAs; will collect information on AML risks and trends and foster the exchange of such information between national supervisory authorities (data hubs); and will ensure that breaches of AML rules are consistently investigated, addressing direct requests to NCAs to investigate and take action if necessary.

The authority will also continue its work on a fintech roadmap by monitoring financial innovation and ensuring that regulation remains technologically neutral, while also assessing the impact on business models and the regulatory space.

IBS Intelligence brings the latest.

Italian bank blockchain project passes technical tests

the full picture, this week - 18 October 2019 | Italian Banking Association | Encompass blog The Italian Banking Association (ABI) says the country’s major banks could be ready to use distributed ledger tech (DLT) to run interbank reconciliations by March next year, after pilot tests proved its capability.

The move is part of the Spunta Project, a programme managed by ABI Lab, the association’s research and innovation arm, designed to implement DLT within the country’s interbank processes.

A total of 18 banks, representing 78 per cent of the banking sector in terms of the number of employees, are involved in the project, which uses technology from NTT Data, SIA and R3.

It is hoped that the migration to a blockchain will result in full visibility of the transactions between banks, daily rather than monthly reconciliations, and more effective communication between counterparties in the event of an exception.

More from Finextra here.

Amy Bell Q&A: your compliance questions answered

Amy Bell | encompass industry advisor Someone who knows how important compliance in the legal space is, and what a robust and effective programme looks like, is industry advisor to Encompass Amy Bell.

An experienced Compliance Consultant, she is director of Teal Compliance and, through her years in the industry, has become a crucial source of knowledge and advice.

That knowledge was put to use when Amy took part in a question and answer session for Encompass, tackling queries on key topics.

Delving into subjects including ongoing monitoring and risk assessments, Amy offered her expertise on day-to-day issues, as well as looking ahead and sharing what firms should be thinking about and prioritising when they are planning for the year ahead.

Take a look back at the session through a recap of the Q&A here.

news in brief

Nearly half (49 per cent) of IT decision makers in the UK believe that uncertainty surrounding the outcome of Brexit has not impacted their company’s decision to invest in IT infrastructure. A survey of more than 2,450 global senior IT professionals for connectivity firm Equinix found that political concerns were not deterring companies from making longer-term decisions on digital transformation.

Facebook’s Libra project has confirmed that 21 firms have signed the Libra Association charter, following an exodus of financial services firms from the initiative amid regulatory concerns. The formal announcement of a governance structure and charter for the digital currency project confirmed the continued membership of tech giants Uber, Spotify and Vodafone, but revealed that major early backers Mastercard, Visa, eBay, Booking Holdings and Mercado Pago have now followed payments firms PayPal and Stripe in abandoning the project.

US regulators issued a warning to cryptocurrency holders who think they’re not beholden to the usual rules. The Securities and Exchange Commission, the Commodity Futures Trading Commission and the Financial Crimes Enforcement Network issued a joint statement reinforcing that digital assets are subject to laws that prohibit money laundering and require reporting of suspicious activity.

Where do incumbents look for game-changing innovation? That’s the subject of this article from Finextra.

Corporate treasurers view the advance of cloud computing as the most important technological development facing the industry over the next five years, followed by Big Data analytics and AI. Read more.

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.

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