By Jane Jee, CEO at Kompli-Global
As with any new and more innovative technology that enters the market, it is often the criminals, rather than law-abiding citizens or companies, who are often the first to exploit the technology for their own ill-gotten gains. This is true at any point but especially during exceptional circumstances, much like we’ve experienced this year.
The COVID-19 pandemic (and subsequent lockdown) has had a profound effect on us all. Businesses have had to furlough employees and take out additional loans, insurance policies and mortgage and rent requests. It has also meant that conventional banks have found themselves under pressure to act like their more agile FinTech counterparts and adopt technology to enable more activities to be carried out remotely rather than face to face.
If banks want to avoid facilitating financial crime, now is the time where they must adopt technologies which can protect their business and reduce the risk of fraud and money laundering.
The factors at play to tip the balance
Time for regulators to see criminals are exploiting technology
The time must come when the regulators take a step back and realise it is the criminals that are exploiting technology – criminals know their way round the system and know where the loopholes are.
I would go one step further and suggest that criminals could be so far ahead of the game that regulators will be forced to step in and mandate the use of certain tools to combat them. For example, the FCA could encourage more financial institutions to solve their regulatory challenges through innovative technology.
The United Nations estimates the cost of financial crime to be between $800bn and $2tn each year. So, what level do losses need to reach for the rapid adoption of new counter crime technologies?
This has been recognised by FCA Director of Innovation, Nick Cook, when he said: “….I think in an era where the advancement in the criminality is driven by the use of fundamentally exponential technologies, the idea that you’re going to address that by moving forward in a very cautious linear fashion doesn’t seem to stack up, you know? We’re in a world where actually standing still is moving backwards…” 
However, Megan Butler, Executive Director of Supervision – Investment, Wholesale and Specialists at the FCA went one step further in a speech delivered at the Royal United Services Institute, saying: “Now as a regulator, we are ‘technology neutral’ – I’m not going to tell you whether you need to automate all your systems or question why you aren’t using AI in every part of your business. But we all need to experiment with new technology, and together see how we can tackle criminals who want to exploit the financial system. We focus on outcomes – and if a new innovation can help reduce harm, we welcome it. We all have a public duty to explore all opportunities to combat crime. Together, we need to turn technology against criminals.”
Additionally, there was a recent announcement that the UK’s Intelligence and Security Committee’s long-awaited report into Russian activity in the UK – revealing that “lawyers, bankers, accountants and public relations professionals – have become wealthy from the Russian money that has flowed into the UK, and particularly into the City of London.” The report reveals that banks are failing to carry out enhanced due diligence on customers with Russian political connections who, although they may not meet the legal definition of a PEP, still represent a high risk of money laundering. The report comes as the FCA – the body responsible for overseeing banks – is increasingly imposing fines for failures to carry out proper customer due diligence.
Noise and confusion of the tech available
It is important to recognise is that the marketplace is so crowded that regulated entities are not sure what is required of them. This uncertainly should be viewed as an opportunity for debate about where technology should be used to combat financial crime.
Regulators expect companies to be proactive in detecting, preventing, and addressing issues within their own operations. These expectations are often costly and almost impossible to complete comprehensively if an organisation just relies upon manual processes alone. Technology enables their highly skilled human compliance staff to devote more time and expertise to customer focused activity rather than wasting time and resources on manual checks.
RegTech companies are pushing the boundaries and solutions are already available that provide access to global real-time data to help human compliance analysts make better, more effective judgments about the risk posed by customers. Technology which uncovers and analyses this data is ideal for countering financial crime and significantly enhances human judgment.
How can the latest technology help?
Many modern systems are designed to leapfrog legacy systems that can constrain banks and other regulated entities and have been developed API (Application Programming Interface) first. It enables the technology and data-intelligence to integrate and enhance existing legacy systems, rather than requiring a replace/rebuild strategy.
This is particularly useful to regulated entities as criminals are becoming more expert at finding loopholes in existing systems. This includes not failing Know Your Customer (KYC) checks because they know what the onboarding team is looking for.
Similarly, fraudsters also know how risk profiling works and will employ ‘sleeper strategies’ before conducting their money laundering activities. However, technology can help to defeat this strategy by incorporating a unique range of other checks that are essential to a comprehensive KYC onboarding process.
By using more than 500 search terms in multiple languages, such technology allows human compliance managers to perform real-time searches of the web, deep web and global government, regulatory and institutional databases to identify any adverse information on new and existing customers that could link them with financial crime. The added benefit is that the technology is able to automatically perform 24 hours a day, seven days a week, so human compliance managers can be alerted when any new relevant information is found.
These functions mean that all regulated entities can be more confident that they keep criminals out and avoid fines for non-compliance. The solutions are built on software that is constantly refined, improved and updated to keep pace with new sources of information.
Fighting financial crime in an increasingly digital world
There is an increasing amount of data available on individuals and businesses due to the globalisation of the financial system and the expansion of the global communications network. Similarly, the global COVID-19 pandemic is affecting the way consumers can transact and are able to access financial services – harnessing technology will enable these businesses to respond to those customers’ needs and wants.
U.S. inauguration turns poet Amanda Gorman into best seller
WASHINGTON (Thomson Reuters Foundation) – The president’s poet woke up a superstar on Thursday, after a powerful reading at the U.S. inauguration catapulted 22-year-old Amanda Gorman to the top of Amazon’s best-seller list.
Hours after Gorman’s electric performance at the swearing-in of President Joe Biden and Vice President Kamala Harris, her two books – neither out yet – topped Amazon.com’s sales list.
“I AM ON THE FLOOR MY BOOKS ARE #1 & #2 ON AMAZON AFTER 1 DAY!” Gorman, a Los Angeles resident, wrote on Twitter.
Gorman’s debut poetry collection ‘The Hill We Climb’ won top spot in the online retail giant’s sale charts, closely followed by her upcoming ‘Change Sings: A Children’s Anthem’.
While poetry’s popularity is on the up, it remains a niche market and the overnight adulation clearly caught Gorman short.
“Thank you so much to everyone for supporting me and my words. As Yeats put it: ‘For words alone are certain good: Sing, then’.”
Gorman, the youngest poet in U.S. history to mark the transition of presidential power, offered a hopeful vision for a deeply divided country in Wednesday’s rendition.
“Being American is more than a pride we inherit. It’s the past we step into and how we repair it,” Gorman said on the steps of the U.S. Capitol two weeks after a mob laid siege and following a year of global protests for racial justice.
“We will not march back to what was. We move to what shall be, a country that is bruised, but whole. Benevolent, but bold. Fierce and free.”
The performance stirred instant acclaim, with praise from across the country and political spectrum, from the Republican-backing Lincoln Project to former President Barack Obama.
“Wasn’t @TheAmandaGorman’s poem just stunning? She’s promised to run for president in 2036 and I for one can’t wait,” tweeted former presidential candidate Hillary Clinton.
A graduate of Harvard University, Gorman says she overcame a speech impediment in her youth and became the first U.S. National Youth Poet Laureate in 2017.
She has now joined the ranks of august inaugural poets such as Robert Frost and Maya Angelou.
Her social media reach boomed, with her tens of thousands of followers ballooning into a Twitter fan base of a million-plus.
“I have never been prouder to see another young woman rise! Brava Brava, @TheAmandaGorman! Maya Angelou is cheering—and so am I,” tweeted TV host Oprah Winfrey.
Gorman’s books are both due out in September.
Third on Amazon’s best selling list was another picture book linked to politics and projecting hope: ‘Ambitious Girl’ by Vice-President Kamala Harris’ niece, Meena Harris.
(Reporting by Umberto Bacchi @UmbertoBacchi, Editing by Lyndsay Griffiths. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)
Why brands harnessing the power of digital are winning in this evolving business landscape
By Justin Pike, Founder and Chairman, MYPINPAD
Delivery of intuitive, secure, personalised, and frictionless user experiences has long been table stakes in digital commerce, well before the era of COVID-19. As businesses harness the revolutionary power of digital technologies, they have pursued large-scale change to adapt to evolving consumer preferences (some more successfully than others, but that’s a blog for another day). Digital transformation is a term we hear repeatedly, and it looks different for each organisation, but essentially, it’s about utilising technology and data to digitise, automate, innovate and improve processes and the customer experience across the entire business.
As I said, this was already well underway but then came 2020 and no industry escaped the disruption of the coronavirus outbreak, which has had an indelible impact on businesses performance, operations, and revenue. Regardless of whether the impact of COVID has been very positive or very challenging, it has forced organisations globally to re-evaluate and re-orient strategies to adapt.
As lockdowns and pandemic-related restrictions continue to change daily life, this raises the question of how we can balance a dramatic shift to digital and the benefits it brings, while ensuring business continuity and innovation both during and post-COVID, and protecting everyone against fraud?
Digital is an essential survival tool, and even more so in a COVID world
No one could have predicted the dramatic digital pivot that has taken place over this year. Indeed, within weeks of the COVID outbreak cash usage in the UK dropped by around 50%. Digital solutions including delivery applications, contactless payments, mobile commerce, online and mobile banking have become essential components of a touchless customer experience in the era of social distancing. It’s no longer just about an enhanced and superior customer experience, it’s also about health, safety and survival.
In store, businesses have benefited from contactless payments enabling faster throughput and reduced need for consumers to touch payment terminals (therefore requiring greater cleaning, which degrades the hardware much faster). Mastercard reported a 40% increase in contactless payments – including tap-to-pay and mobile pay – during the first quarter of the year as the global pandemic worsened. Digital has also become an essential sales channel for many B2C brands. Where brick and mortar stores have been required to close, digital commerce enables continuity of customer relationships and revenue. This channel also provides brands with rich customer data, which can be used to enhance and personalise the customer experience and typically results in greater levels of engagement and uplifts in revenue.
Industry forecasts estimate that worldwide spending on the technologies and services enabling digital transformation will reach GBP 1.8 trillion in 2023 – a clear indication that the process represents a long-term investment and a global commitment to digital-first strategy. The key point here is that digital brings significant benefits, and regardless of COVID, is here to stay.
The challenges that rapid digital transformation brings to businesses
Regardless of whether businesses are operating in developed or less-developed economies, these times of crisis have levelled the playing field in the sense that all businesses are facing similar issues. Access to products and supplies, maintaining customer relationships, accelerating sales for some and declining sales for others, health and hygiene are just a few of the unique challenges brought about by COVID.
Many businesses in physical environments have had to swiftly implement changes to significantly reduce safety risks for staff and customers, such as contactless payments, mobile ordering and delivery options. But with these changes come a host of other benefits of digitisation, such as faster transactions, and reduced human error at the point-of-sale.
The reliance on technology, however, can also expose organisations and consumers to certain vulnerabilities. In particular, the risks of fraud and cybercrime have dramatically increased since the onset of the pandemic as scammers have taken advantage of digital technologies to target both businesses and individuals.
As a McKinsey report illustrates, new levels of sophistication in the activities of fraudsters have placed more pressure on companies that have been previously slow to go digital, bringing “into sharp relief how vulnerable companies really are”, and damaging the financial health of small and large businesses. In fact, the Bottomline 2020 Business Payments Barometer reveals that only one in 10 small businesses across the UK report recovering more than 50% of losses due to fraud.
But take these stats with a grain of salt. While it is important to be aware of the risks and challenges this new business landscape brings, it’s equally as important to have a lens firmly across your own business, industry and audience, and to identify the changes you can make internally to mitigate risk as well as improve your customer experience. Where can you make some quick wins? Do you have the right skillsets internally to achieve what you need to achieve? What technology is out there that will enable your business goals? There are tech companies like MYPINPAD that are making huge strides in software development, which will transform businesses globally.
A digital world post-COVID
Almost a year in, the line between business success and failure remains fragile. However, an ongoing transition towards greater digitisation will be the difference between survival and the alternative.
There is a wide range of initiatives businesses can implement to weather this storm. If we look at the space MYPINPAD operates within, secure digital consumer authentication is crucial to the ongoing success and security of not only financial products but also identification and verification across a range of different industry verticals. Shifting the authentication of consumers securely onto mobile devices enables businesses to completely reshape their customer experiences. By bringing together a more seamless, frictionless customer experience, accessibility, privacy, security and access to consumer data, businesses are able to drive digital transformation across day-to-day activities.
Against this backdrop, software with stronger security standards continue to play an ever more vital role in supporting society, protecting consumers and businesses from the increase in risks that rapid digitisation brings. Already, merchants can deploy PIN on Mobile technology from companies like MYPINPAD, onto their smart devices to speed up the digitisation process many are now tackling.
Essentially, opening up universal payments and authentication methods that feel familiar, for both online and face-to-face transactions, will be key to opening up a world of possibilities when it comes to redefining how businesses engage with consumers.
Brexit responsible for food supply problems in Northern Ireland, Ireland says
LONDON (Reuters) – Food supply problems in Northern Ireland are due to Brexit because there are now a certain amount of checks on goods going between Britain and Northern Ireland, Irish Foreign Minister Simon Coveney said.
British ministers have sought to play down the disruption of Brexit in recent days.
“The supermarket shelves were full before Christmas and there are some issues now in terms of supply chains and so that’s clearly a Brexit issue,” Coveney told ITV.
The Northern Irish protocol means there are “a certain amount of checks on goods coming from GB into Northern Ireland and that involves some disruption,” he said.
(Reporting by Guy Faulconbridge; Editing by Tom Hogue)
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