The rules governing international regulations and finance can be a minefield for companies wanting to expand internationally. Compliance can be difficult and expensive given the variety of requirements, and failure to comply can have serious financial and legal repercussions. The good news is that technology can be a useful aid in navigating this labyrinth. We’ll look at how businesses can utilise technology to adhere to rules governing foreign money in this blog post.
1. Use Regulatory Technology (RegTech)
Regtech is the use of technology to manage regulatory procedures within the financial sector. The major responsibilities of regtech are regulatory monitoring, reporting, and compliance.
Regtech is a community of tech companies that handle difficulties originating from a technology-driven economy through automation. Data breaches, cyberattacks, money laundering, and other fraudulent activities have grown due to the development in digital goods.
Regtech lowers the risk to a company’s compliance team by providing information on money laundering operations carried out online—activities that a traditional compliance team may not be aware of due to the growth of underground marketplaces online.
2. Implement Know Your Customer (KYC) processes
Background checks, often known as KYC (or know your customer) checks, should be performed as part of your risk-based strategy. During the KYC process, the customer’s identification is verified using documents such a photo ID, a birth certificate, and a proof of address. This can be done manually with paper documents, but doing it electronically with data from the internet is quicker and more dependable.
After a customer has been onboarded, a longer procedure known as customer due diligence, or CDD, continues that includes sanctions and PEP screens checks to regularly evaluate the risk level that a customer provides to a business.
AML compliance is critically dependent on both KYC and CDD. To avoid unintentionally working with a company or person with a history of financial crime or penalties, regulated firms are required to identify and check everyone they engage with.
3. Leverage Blockchain Technology
By offering a safe and open platform for transactions, blockchain technology can assist firms in navigating the complex web of international financial rules. Blockchain is a distributed ledger system that enables safe data sharing and secure data access amongst numerous parties.
Businesses can use blockchain to comply with rules governing things like data privacy and security. By providing a tamper-proof and auditable record of transactions, it can also lower the risk of fraud.
Giving customers access over their personal data, for instance, firms can employ blockchain technology to adhere to the General Data Protection Regulation (GDPR). By offering a secure platform for exchanging and verifying consumer data, blockchain can also assist companies in adhering to Know Your Customer (KYC) rules.
4. Use Data Analytics and Artificial Intelligence
Businesses produce enormous amounts of data in our lightning-fast age of computer connectivity, which can be difficult to keep up with. Yet, when you learn to use artificial intelligence to evaluate data, you may get findings that are far faster and more accurate than those produced by humans.
Since they have been used in conjunction for so long, people rarely distinguish between AI, or artificial intelligence, and data analytics. Data analytics and AI skills, however, are becoming more widely used and apply to commercial activities like supply and marketing. Understanding the differences between the two and how AI is used to data analytics is crucial.
5. Invest in Cybersecurity
For firms wanting to negotiate the maze of global banking regulations, investing in cybersecurity is essential. Data breaches and ransomware attacks are examples of cybersecurity dangers that can cause major financial losses and reputational harm.
Technology can be used by businesses to defend their data and systems from cybersecurity threats. For instance, they can use multi-factor authentication to stop unwanted access and utilise encryption to protect critical data.
In conclusion the international finance regulations can be a real headache for businesses. However, if you utilise some of these technologies you can avoid the potential risks that come with not complying with the regulations.
IT Support for Dubai and UAE based Businesses – Truly Secure
If you need any assistance with implementing any of these technologies in your Dubai or UAE based finance business to assist with complying with international finance regulations or if you need help with anything else to do with technology please get in contact with us hear at Truly Secure.