In a world where financial crime is becoming increasingly sophisticated, it is only natural that the rules surrounding Know Your Customer (KYC) and Anti-Money Laundering (AML) are becoming ever stricter. However, legislation and regulations are becoming increasingly complex. New directives such as AMLD6 and the European AMLA bring stricter requirements and higher expectations. Compliance departments are groaning under the increasing pressure to keep up and avoid heavy fines.
However, we note that compliance processes are often inefficient, manual, and slow in practice. This causes frustration among employees and entails considerable risks and costs for the company. What was once an administrative obligation has now become a strategic challenge for every organisation that is subject to supervision. But with that challenge also come opportunities.
The compliance paradox: more rules, fewer resources
Compliance departments are caught between a rock and a hard place.
On the one hand, they are faced with an explosion of regulations: AMLD6, the establishment of AMLA, stricter PEP (Politically Exposed Persons) verifications, and a broader scope that now also includes sectors such as crypto and real estate. Each new rule means more paperwork, more checks and more complexity.
On the other hand, resources remain limited. Recruiting additional staff is expensive and often impossible in a tight labour market.
The result? Compliance officers are drowning in repetitive tasks: collecting documents via email, manually analysing ownership structures, drawing up risk profiles in Excel files. It is an inefficient reality that is unsustainable in the long term.
The data maze: fragmented and unreliable
An additional challenge is the fragmentation of data.
Data is spread across different systems and jurisdictions, often in varying formats and of varying quality. UBO registers are organised locally, sometimes inaccessible, and rarely up to date. Building a complete and reliable customer profile is therefore a time-consuming and error-prone task.
In addition, companies are not making things easier for themselves with complex ownership structures. These so-called UBO (Ultimate Beneficial Owner) structures are often spread across multiple countries, making it complicated and time-consuming to identify and verify the individuals involved. And that is precisely where the problem lies. At a time when speed and accuracy are crucial, organisations are losing valuable time searching for missing or incomplete information. This leads to delays in processes such as customer onboarding and periodic reviews, which in turn increases the pressure on compliance teams.
Manual processes: time-consuming and risky
It has already been mentioned earlier in this article. It remains striking that many compliance departments still rely on outdated, manual processes. Documents are requested by email, often multiple times because data is missing or incomplete. Or because the other party simply does not respond. Every email exchange slows down the process and increases the risk of errors. In addition, risk assessment is still regularly carried out using spreadsheets. Without fixed guidelines and clear standards, this leads to chaos, inconsistency and uncertainty. All of this contributes to high workloads and unnecessarily high costs.
New rules offer opportunities
However, these challenges also present opportunities. For example, the introduction of AMLD6 and AMLA emphasises stronger cooperation and information sharing between financial institutions and regulators. AMLA even introduces centralised European supervision, which can provide greater clarity and uniformity. These are important changes which, if properly utilised, can represent a significant step forward in the fight against financial crime. Compliance is then no longer a burden, but a strategic advantage. However, this requires a fundamental shift in approach.
The solution: automate, or fall behind
The only sustainable way to tackle the compliance challenges of today and tomorrow is through automation. Not as an end, but as a lever to streamline processes, reduce errors and enhance insights.
By automating repetitive tasks and processes, you ensure that compliance departments spend less time on administrative tasks. This frees up time for what really matters: risk assessment, strategic analysis, critical decisions and customer focus.
- Automatic systems collect and enrich documents and data from various sources in real time, ensuring that up-to-date and reliable information is always available.
- • By applying automatic risk scoring, each customer is consistently assessed based on predefined rules. This not only reduces the risk of errors, but also significantly speeds up the decision-making process.
- In addition, automation provides a digital audit trail, ensuring that compliance processes are always fully verifiable. This is an absolute added value during inspections and audits by supervisory authorities.
- A central case management system also strengthens cooperation within compliance teams and with other departments, making work smoother and more efficient.
- Finally, use your people for what they are trained to do. Not to perform simple administrative tasks, but to evaluate information and then, make decisions.
Conclusion
Compliance staff are being given even more tasks to deal with. This situation is no longer sustainable. Automation is therefore no longer an option, but a necessity. Given the increasing complexity of regulations and the growing workload, it is essential to organise compliance processes more efficiently. Automation not only ensures better compliance with the rules, but also offers companies significant time and cost savings, while improving the customer experience.