Why innovative fintech requires scalable regulatory support

You have to have been hiding in a bunker not to have heard of “fintech” — but have you heard of “regtech”?

As the traditional financial services industry continues to be disrupted by new technologies and payment apps, it doesn’t change the fact there are complex architectures and frameworks needed to meet regulatory and compliance requirements. “So much goes in background in terms of compliance,” said Zac Cohen, general manager at Vancouver-based Trulioo.

The main mission of the company is to solve the problems related to verifying identifies online. It just enhanced its global anti-money laundering (AML) watch list capabilities for its flagship solution, GlobalGateway, to include extensive, country-specific sanctions lists and an enhanced Politically Exposed Persons (PEPs) watch list containing more than one million entities worldwide.

To create trust networks, said Cohen, there a number of different methods to verify individuals, whether it’s for traditional banking or emerging fintech. “We solve the regulatory concerns. We are enabling fintechs as they start to scale.”

Trulioo’s global watch list allows financial services providers and financial institutions to effectively meet critical compliance obligations with real-time watch list checks against known or suspected entities and individuals with association to money laundering, terrorism, financial fraud, arms proliferation, drug trafficking or PEPs. The enhanced watch list provides the additional screening, due diligence and compliance checks for global organizations with the highest requirements for screening potential risks to meet global regulations.

Geopolitical uncertainties, tightening policies and regulatory enforcements have combined to make watch list screening among the greatest challenges for financial institutions. Since 2013 worldwide, financial institutions failing to meet AML and “Know Your Client” rules have been fined more than $10 billion. With more than a billion name checks conducted globally each day, institutions continue to grapple with the sheer volume of screening, while being confronted with the challenge of meeting complex and increasingly vigilant data governance procedures.

Trulioo’s watch list sources are collated from an extensive network of reputable sources including sanction lists, law enforcement lists, including Interpol, country specific government and state agencies, and police forces, and local and global governing regulatory bodies. The enhanced data sets also encompass Adverse Media that analyzes more than five million media articles to identify reported criminal activities and relevant risks in real-time.

So we don’t the banks just do this themselves?

Cohen said there are processes in places at a regional level if you walk into a local bank, which will run a name against an AML. But once a bank wants to streamline and scale that process globally, it’s difficult to set up a process. “The compliance process isn’t necessarily centralized.” Trulioo enables the scaling and streamlining of the process across 50 countries.

The company is in a sense a fintech company, but it is also helping other fintechs as a regtech company, said Cohen. “We really ride both aisles.”

Last year, Trulioo, release a normalized API, which a customer only needs to integrate with once, he said. “Typically our customers can onboard in less than week.” After that, it’s easy to add new countries and data sources.
Trulioo’s customers span traditional financial service organizations, including banks and credit unions, as well as online payment services and crowdfunding platforms, essentially anywhere where a trust network is required and payments are being made online, said Cohen. “Our job is to keep our customers in step with regularity changes.”

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Gary Hilson
Gary Hilson
Gary Hilson is a Toronto-based freelance writer who has written thousands of words for print and pixel in publications across North America. His areas of interest and expertise include software, enterprise and networking technology, memory systems, green energy, sustainable transportation, and research and education. His articles have been published by EE Times, SolarEnergy.Net, Network Computing, InformationWeek, Computing Canada, Computer Dealer News, Toronto Business Times and the Ottawa Citizen, among others.

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