Recent fraud cases put tech-enabled protection in the spotlight and illustrate how perpetual know-your-customer checks could transform compliance.
Recent news highlights why financial institutions need to revamp their compliance culture to be real-time and continuous – or face the consequences.
Fraud protection is already hijacking headlines in 2023:
Both PNC and JPMorgan are facing lawsuits that blame them for their customers’ fraud losses through insider threats or phished credentials, while Coinbase agreed to a $100 million settlement related to its anti-money laundering (AML) and know-your-customer (KYC) controls.
While each story contains its own unique details (and PNC and JPMorgan’s cases are still ongoing), at their core they involve accusations that the financial institution should have caught red flags before it was too late.
That’s where sophisticated fraud-fighting tech comes in. As one exec recently put it to us: Technology is “transforming the culture of compliance to be real-time, continuous, and complete.”
While FinServs have historically viewed KYC protection as a customer onboarding issue that requires manual processes, paperwork, and legacy systems, technology is now allowing them to shift to a customer lifecycle management mindset, according to a recent Moody’s Analytics report.
Perpetual KYC uses AI-powered data crunching to transform from “an activity that occurs irregularly every few years after onboarding to an automated trigger-based activity that works in real time,” the report says.
As a real-world example, Standard Chartered is using tools from Chekk for real-time risk assessment and anti-money laundering.