No doubt, the economy is the most affected area by the Covid-19 epidemic process. The operational stagnation in industries caused economic collapse all over the world. The fact that the virus has undergone recent fluctuations in many countries is the most significant factor in maintaining the process's uncertainty. The new world order brought new restrictions and regulations in the economy as well. It seems that even if the pandemic ends, the economic effects of the epidemic will continue.
The traces of the new world order seen in the economy have created challenging conditions, especially for compliance experts and companies. Financial compliance requirements are seen as the main factor in gaining the banking system's trust in the public sphere. Depending on the new technological developments and the acceleration in the digitalization process, the financial world is exposed to several risks and threats. It is now more critical for companies to have an adequate compliance program.
What Are The Effects of Covid-19 on The Economy?
Throughout history, the country's economies have entered into a stagnation and recovery period for various reasons. Although these processes are seen as country-based, their impact on the global economy has been great. For example, the Great Depression is the economic crisis with the most shocking effects on the world economy. Bad structuring of banks and inadequate financial regulation of companies caused the collapse of the US stock market. With this collapse, the world economy also shrank by 65%.
The economic crisis because of the Covid-19 is not the first crisis seen in the global economy. However, there is no doubt that it is the most uncertain so far. With the current crisis, external pressures that countries are exposed to in the field of health and society have imposed a moral responsibility on governments. A series of restrictions were imposed in line with this sense of responsibility. During this process, the state was obliged to prevent the victimization of the people. For this reason, various financial support packages have been implemented to meet the needs of businesses and individuals.
However, breaking the current cycle and the unilateral flow of money put states into various financial crises. On the one hand, countries such as South Korea and China, which managed to contain the epidemic, tended to be less affected by this crisis. It is observed that developed European countries are more affected by the epidemic than these countries.
During the Covid-19 process the economic recession has certain effects on compliance activities. In such recession periods, criminal financial activities such as obtaining illegal income and laundering these revenues increase.
The Compliance Solutions That Shaped the New World
Adverse Media Screening
One of the biggest problems encountered in the Covid-19 process is information pollution. Digital execution of many economic activities and processes caused a significant increase in information resources. Also, current data is changing more rapidly than before the pandemic process. For this reason, it has become difficult for businesses to access up-to-date data.
The increase in criminal activities that occurred with Covid-19 also affected adverse media. Therefore there is a need for adverse media screening software more than ever. Businesses should have a correct AML compliance solution to take appropriate security measures and easily access the right information.
For more information, you can check out our content: The Importance of Adverse Media in Covid-19
AI Technology for Authentication Processes
For financial institutions, supply the requirements of KYC and AML regulations is not always easy. They need to realize to Customer Due Diligence(CDD) and identity verification processes quickly against potential money laundering risks. Therefore, financial institutions can apply to technologies supported by artificial intelligence and perform their transactions automatically.
With the AI-supported AML solutions offered by Sanction Scanner, it is much easier to increase identity verification, CDD, and KYC processes and detect the money laundering activities that companies are exposed to.
To report is one of the most effective AML regulations for financial institutions. Institutions have a responsibility to report any suspicious activities against money laundering and terrorist financing. Otherwise, organizations that did not report potential risk activity sustained may be exposed to certain penal sanctions.
Real-Time Transaction Monitoring
The digitalization of financial processes has led to an increase in financial crimes. Depending on this increase, real-time tracking of economic activities has also got significant importance. Therefore, Banks and other financial institutions must instantly aware of any risk situation and take action.
Sanction Scanner offers end-to-end solutions for the AML requirements of businesses. Through the real-time alarm monitoring system of AML Transaction Monitoring developed by Sanction Scanner, you can instantly notice every alteration made and reduce your workload.
Covid-19 in 2021
The Covid-19 outbreak, which we have seen since January 2020, seems to be with us some more. Although there were economic movements in the last summer, the second and third fluctuations in some countries caused new bottlenecks in the global economy. While all the pandemic theories remain uncertain, the 'new normal' is already showing its effect everywhere. All these changes have significant implications for compliance activities. For instance, All financial institutions should update the measures they take against risk situations in line with the new regulations and restructure them to meet the new risks.