New research from the global analytics provider LexisNexis Risk Solutions has examined fintech companies’ view of the UK’s anti-money laundering regime. The conclusion states that fintechs don’t condone shortcomings in the fight against financial crime with almost half (48%) of UK based fintech companies rendering the existing UK regulatory framework ineffective in combatting financial crime in the UK, with one in 10 fintechs (12%) going so far as to say that it is not at all effective.
Michael Harris, director, Financial Crime Compliance and Reputational Risk at LexisNexis Risk Solutions, comments: “With their agile approach to business, a good understanding of technology and being unencumbered by legacy systems, fintechs are in a strong position to take the lead in actively detecting and fighting money laundering within the UK economy.
However, there are some internal challenges to overcome. Recruiting talent with the right skill set can be difficult, as fintechs compete with banks with bigger budgets. There also needs to be an internal culture shift towards understanding the AML threat better and tackling complacency.
Some of the findings from the research include 46% fintechs believing advanced analytics and emerging technologies to be the most effective way against money laundering in the UK. 25% of fintechs cited one of their greatest concerns in relation to money laundering as evolving criminal methodologies, such as the use of cryptocurrencies, as the largest risk.
They see geopolitical events like Brexit (16%) and a lack of awareness of the threat of money laundering (16%) as the second biggest risks. 53% of fintechs view the lack of information sharing between regulated industries as the biggest external barrier to effective AML controls, along with 49% stating that lack of consistency towards AML across different sectors was a significant obstacle.
The research was conducted by LexisNexis Risk Solutions and The Economist Intelligence Unit and the findings are detailed in On the Frontline: Fintechs Vs Money Laundering.
Established in 1970 in Georgia, LexisNexis Risk Solution utilizes data and analytics to provide insights that help businesses and governmental entities reduce risk and improve decisions to benefit people around the globe. They provide data and technology solutions for a range of industries including insurance, financial services, healthcare and government.