Did you know there were 837 criminal charges in the UK last year due to compliance failures?

Last week I spoke with the Head of AML, at a 2000+ person US bank, which had in the past been fined over 100M+ not once but twice for the same process failure.

It was a perfect case of how overstretched compliance teams default to temporary band-aid solutions in response to a failure, which is often throwing talent at manual pencil pushing tasks. This works just fine in the short term, but ultimately sets you up for failure in the long run. All of these manual processes are extremely fragile and fall apart when faced with any of these changes:

1. Your customer base grows or changes

2. Regulations change

3. Your team changes or leaves

And some of the results:

1. Customers are waiting in your review backlog, they start complaining and leaving to competitors. By the time customer support or rev ops has flagged this issue to you the problem has only gotten worse.

2. You missed several critical regulatory updates in multiple jurisdictions, and now your policies are outdated. Even if you can catch up you’ll still have to wrangle these into your operations somehow, more manual work and time.

3. Your best talent is fed up with doing the same mind-numbing tasks that keep showing up, and resolving the same issues. The remaining team are further stretched and moral drops. You dont have enough time to train new team members.

Your compliance process quality drops off a cliff, creating the worst kind of risk for the business, a silent risk. All the metrics look fine but your team are cutting corners to meet demands and outdated policies are being executed. It’s like Mark Twain says - "It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so." This is often how companies end up with 100M+ fines and criminal charges.

The next generation of fintechs and crypto providers will find a way to leverage their highly skilled compliance talent to prevent these business risks and provide an outstanding customer experience. Just like how engineers moved from using pencils to computers, the best compliance teams are arming their compliance analysts with AI Analysts to increase their leverage. These fragmented and repetitive manual processes such as AML and EDD reviews will be handed over in large part to AI analysts who can take into account your analyst's previous decisions, your risk based approach and your policies. The traditional gaps between policies, operations, your risk baked approach and the customer will no longer exist. This is our approach to compliance at RegSage, something we call Contextual Compliance.