As published in The Fintech Times
The Fintech Times examines the issue of risk orchestration as one of the biggest issues regarding compliance and financial rules, and a solution to ease the compliance journey for firms and make the fintech world fairer and safer. While new technologies could potentially help protect firms from attacks, the very same tech is being leveraged by cybercriminals to achieve the opposite result.
With this in mind, remaining agile enough to see off emerging threats can seem like an impossible task. However, risk orchestration is a process promising to help fintechs and financial institutions combine their customer onboarding, authentication, and risk management processes into one place.
In this article, FinScan’s Director of Advisory Services, Steve Marshall, provides his insights on “Encompassing the ‘full spectrum’ of financial crime risk”:
“Risk orchestration should not be limited to AML and fraud but encompass the full spectrum of financial crime risk.
“Over the past decade, there has been a significant evolution in how companies approach risk management. Previously, the AML focus was primarily on conducting due diligence during the onboarding of new customers and periodically throughout the customer lifecycle. For fraud, the focus was historically on customer identity. However, the modern landscape demands a more holistic approach, requiring companies to evaluate their entire network of customer and counterparty relationships and the associated financial crime risk.
“This necessitates a complementary risk identification and mitigation effort involving AML and fraud. However, combining the organisations may not lead to the intended benefits. Rather, looking at the potential overlap of risk and risk mitigation may be the appropriate focus.
“Fintechs must vigilantly identify and monitor financial crime risks to identify potential sanctions violations and suspicious activity. Failure to do so can lead to significant financial penalties. Beyond financial repercussions, inadequate risk management can lead to severe reputational damage, emphasising the importance of a robust and forward-looking financial crimes analysis and risk assessment process.”