How Can FinTech Fight Financial Crimes?

Financial Technologies (FinTechs) continues to change habits with its easy, fast, and competitively priced solutions. With FinTechs, we witness how technologies that facilitate human life have grown and adopted. FinTechs have reached billions of customers with digital banking, e-wallets, and digital payment services. The solutions provided by financial technology companies based on customer experience have the most significant share in this success.


FinTechs Faces Financial Crime Risks


If we look at the coming years, the growth of the FinTech customer mass with the services types of financial technology companies is not far away. Although some financial technology companies provide similar services in traditional banking, it is a great mistake to think that FinTech and traditional banks are rivals. FinTechs should not forget that they can achieve great growth with the supportive solutions they will provide to the banking sector. In recent years, we have been witnessing win-win focused agreements between banks and financial technology companies frequently.


While following the growth of FinTechs, we also face some important financial crime risks. As a result of the abuse of fast financial services provided by FinTechs, financial crimes have started to be committed. Committing crimes through fast and easy solutions provided by financial technology companies made it compulsory for companies to take some precautions. You can read some on this blog about the precautions that FinTechs must take to prevent financial crimes such as money laundering, terrorist financing, corruption, and bribery.


How Can FinTechs Make Customer Onboarding Process Safer?


Financial technology companies aim to perform customer account opening processes quickly without waiting for the customer. In this regard, they abandoned traditional onboarding processes and started to apply digital onboarding processes instead. With digital onboarding, customers can now open accounts from their home, work, or a cafe without having to go to a branch to open an account physically. Although this is a process where customers are very satisfied with their account opening processes, financial technology companies face with crime risks.


AML Compliance For Fintechs - Case Study


To protect itself from financial crime risks and to comply with AML regulations, FinTechs have to identify and verify the identity of the customer during the account opening process. FinTechs must detect the customer's risk level by following the Customer Due Diligence (CDD) procedures and apply the AML control program to its customers based on the risk level. Sanctions and PEP scanning is one of the methods used to determine the risk level of customers.


AML Name Screening Software


Transaction Screening for Fintechs


Financial technology companies must adopt a risk-based approach to fight financial crime effectively. The risk-based approach that should be followed by the customer onboarding process should continue during the customers' financial transactions. FinTechs need to determine whether the money transfer and payment transactions mediated by them are a financial crime. For this, they can use software such as Sanction Scanner, which can scan the receiver and sender in the transactions in sanction & PEP lists and detect unusual amounts of transactions. Suspicious transactions detected must be reported to the Financial Intelligence Units by the company's AML compliance officer.


Transaction Screening Software


Transaction Monitoring Software for Fintechs


All financial transactions involve financial crime risks. That's why FinTechs must detect anomalies in customer transactions. There is a variety of money laundering and financial crime techniques. Manual AML controls today are ineffective in detecting financial crimes. Our solution, "AML Transaction Monitoring Software," helps financial institutions to detect anomaly transactions. Financial institutions create rules and scenarios suitable for their own risk levels with the software. Then, all transactions mediated by financial institutions are scanned in the background according to these rules and scenarios. Thus, the entire control process is carried out automatically and more effectively.


AML Transaction Monitoring Software

Effective Fighting with Financial Crimes


In this article, we have frequently drawn attention to the importance of Fintech attaches to the customer experience. Although financial crimes and AML compliance are confusing for Fintechs, Fintechs can protect themselves from financial crimes and ensure AML compliance without harming customer experience. As Sanction Scanner, we know the needs of Fintechs and offer solutions that meet their needs. With our data consisting of thousands of sanctions & PEP lists of more than two hundred countries, we facilitate the processes of detecting and preventing financial crimes.


AML Compliance For Fintechs


Fintechs can protect itself from financial crimes and meet AML obligations in all these steps, from customer onboarding to transaction screening processes with Sanction Scanner. Fintechs can perform all these control processes automatically with API integration and can perform all these controls in seconds without harming the customer experience. If you want to protect your financial technology company from financial crimes and not ensure AML compliance, you can contact us.

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