The Role of Regtech Companies in Combating Financial Crimes

As the effect of financial crime on businesses and society grows, more companies are seeing the value of RegTech (Regulatory Technology) in their risk mitigation plans.


The cost of failing to adopt RegTech to effectively handle financial crime risk management responsibilities pales in contrast. RegTech is a fraction of the cost of regulatory penalties for non-compliance. In addition to penalties, failure to protect against financial crime may result in data loss, financial loss, and reputational harm for organizations.


Despite companies' recognition of the significance of integrating technology within their financial crime risk management plans, take-up may still lag behind what is required to protect the company. According to PwC's Global Economic Crime and Fraud Survey 2020, the cost of economic crime and fraud surpassed US$42 billion in the past 24 months.


Firms must follow the FATF's advice and include an enterprise risk assessment. In addition, as a member of the Financial Action Task Force (FATF), Australia establishes Anti-Money Laundering (AML)/Countering Terrorist Financing (CFT) standards, evaluates member progress, and finds vulnerabilities that may expose the global financial system to abuse.


The FATF’s high-risk reporting organizations are illustrated in the image below: 


High-risk Groups Defined by FATF

The FATF statements should guide an organization's AML/CTF program. It emphasizes the role of risk assessment in the AML program. Australian Transaction Reports and Analysis Center (AUSTRAC) advises companies engaging with high-risk nations and areas to:


  • Follow up with customers,
  • Consider the risk while monitoring transactions.
  • Report suspicious activity.

How May Regtech Help Control Financial Crime Risk?

Increasing data quantities, more regulation, and reform regulator pressure mean that businesses of all sizes must consider RegTech for risk management and compliance. RegTech developments may help to improve compliance in areas as shown on the visual below:



Regtech Innovations> RegTech systems are completely trackable and auditable. Companies may use pre-built risk assessment systems to set up their own anti-money laundering policies, conduct enterprise risk analytics and controls testing, and produce board-level reports. Building and completing evaluations may produce these.</span></p><p style=

Regulatory compliance isn't a one-time job. With reduced dependence on manual procedures, RegTech solutions enable organizations to evaluate risk more often as risk levels vary. Using this technology ensures that the risk variables being evaluated are up to date and that problems are identified and addressed quickly.


The human aspect and societal effect of many financial crimes are frequently concealed, which may foster a sense of responsibility when addressing these problems. RegTech adoption may help drive cultural change inside an organization by raising knowledge of funding terrorism and money laundering problems.


This involves understanding not just the regulatory consequences for the company but also the effect on the victims and society. Financial crimes supporting money laundering may fund human trafficking, enslavement, drug trafficking, and terrorism. 


Effective anti-money laundering risk management includes:


  • Analyzing national AML legislation
  • Assessment of money laundering and terrorist funding risk
  • Knowing your client collection and verification needs
  • Introducing enterprise risk analytics
  • Creating a comprehensive audit trail for AML risk management
  • Notifications of AML regulatory changes

AML Compliance with Sanction Scanner

Sanction Scanner's AML programs aim to promote financial crime monitoring. It helps organizations comply by offering a technological solution that strengthens their financial crime barriers. These solutions assist organizations in managing regulatory compliance by discovering, evaluating, managing, and reducing risks. If you want to learn more about our products, please contact us and request a demo.

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