About 342 billion have been collected in fine between 2009 – 2017 kudos to the companies not following the AML rules clearly.The misconduct is the other reason for which the fine has been collected. If such a trend continues then it has been estimated that by 2020 the amount collected in terms of fines will rise to $400 billion. The FI is one of the institutions that take into consideration many factors before moving forward with the implementations of the penalties. It includes the funding resources,terrorism financing, and money laundering. The KYC regulations which are to be implemented are also done by the FI for making sure that the customers are known thoroughly. It is very important that the RegTech tools are used for optimal performance. The transactions that are deemed to be suspicious should be reported immediately. It also makes sure that the consumption patterns are also recorded without breaching the privacy overall. Large FI's or the financial institutions spend about $150 million in total when it comes to KYC regulations. For the best performance, such institutions also spend about 32 days on average for the implementation of plans and strategies.
Customer due diligence and the identification programs are the most important ones that are these institutions bound to introduce when it comes to the Patriot Act 2001. The CX/UI/UX is the ones which are closely monitored and they directly connect themselves with the CIP. Obtaining,verification and the recording of the information of any individual are very important before they proceed to open an account with the banks. The banks are bound to perform every check as per the federal law in form of the Patriot Act of 2001.
To cope with the requirements it is important that the technologies are also used increasingly as without this it is not possible at all. The banks all over Europe and Americas are spending about 20 billion per year to make sure that the technological advancements are met to cope with the ever-increasing sheer number of regulatory requirements. To cope with the huge volume of the regulatory info it is important that the organizations also get vigilant so that less is spent on info collection.
Though the organizations are spending billions on compliance the costing is ever increasing when it comes to financial misconduct. Regardless of the fact that 10 – 15 % of the staff is assigned to the compliance regulations the cost and the manpower is ever increasing for no reason. Misconduct is increasing with the passage of time and so do the cost which in 2018 has reached up to $320 billion. It means that the cost will also be increased as the time pass by.
RegTech seems to be the only solution in this regard. AML/KYC/CTF compliance is embedded within the systems which are being used by over 700 startups all over the world. Pendo Systems is a company that has the wide range of experience across the AML and regulatory compliance platform. The AML should be digitalized and this is the finest and the most important step that has been taken by the Pendo systems to reduce the time overall. The unstructured data and the analysis is connected to the TMS which will save both time and cost of the overall management of the AML regulatory performance.