Challenger Banks and AML Compliance

What is Challenger Banks?


Challenger banks are small, retail banks that compete with older banks. The concept of "Challenger Banks", which has entered our lives in recent years, has become increasingly popular and creates serious competition threats for old banks. Most Challenger banks do not have branches. Despite this, Challenger banks achieved customer satisfaction with their solutions and reached millions of customers. The not of branches of Challenger banks save them from a considerable cost and allows them to provide more affordable services. The most important feature of Challenger banks is to avoid unnecessary costs caused by traditional banking by using new financial technology. Customers of Challenger banks can perform all their transactions through digital channels without going to branches.


The most important advantage of Challenger banks is that they have their own banking licenses. Challenger banks can provide traditional banking services to its customers through more flexible and cost-effectively with their license. Due to these services, it is expected that the demand for Challenger banks will increase in the following years and the number of Challenger banks will increase.


Challenger Banks under Financial Crime Threats


While Challenger banks want to keep customer experience and customer satisfaction at the top, they face some risks. Challenger banks' inexperience against financial crimes during their establishment made it easier for criminals to commit crimes such as money laundering, corruption and bribery through challenger banks. Criminals have created new crime channels by abusing the fast and digital services provided by Challenger banks.


AML Requirements For Challenger Banks


Also, the fact that Challenger banks are among the institutions at risk made it compulsory to meet the AML obligations. Challenger banks are required to protect their companies from financial crimes and ensure AML & KYC compliance. Challenger banks should determine the risk level of their customers by performing AML and KYC controls during customer onboarding processes and perform a customer monitoring process appropriate to the customer's risk level.


Challenger banks should perform all these checks quickly and without damaging the customer experience, as by the service they promised. The slow progress of anti-money laundering controls causes delays in customer transactions and consequently reduced customer satisfaction. Therefore, Challenger banks aim to support AML compliance processes by using advanced AML software without harming customer satisfaction.


How can Sanction Scanner Help


Sanction Scanner provides solutions that meet the AML needs of Challenger banks. Challenger banks can meet regulatory requirements without delaying customer transactions with the solutions of Sanction Scanner. Sanction Scanner provides screening service among 200 countries' sanction, PEP, wanted and watched lists data. Challenger banks can perform necessary AML controls within seconds in customer onboarding, customer monitoring and transaction screening processes. All controls are performed automatically in seconds with the API and customer transactions are not delayed. You can contact us for more detailed information about our Anti-Money Laundering and Countering the Financing of Terrorism solutions. While Challenger banks focus on customer satisfaction, they can get support from Sanction Scanner in AML compliance processes.

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