In 2024, the financial sector faces increasingly complex compliance challenges. Institutions juggle disparate processes that result in high costs and security risks. However, the combination of blockchain and artificial intelligence (AI) offers an innovative solution to improve these processes. This article explores the key compliance challenges and how Wecan Group, with its Wecan Comply product, is transforming this landscape.
Financial Compliance Challenges
In an increasingly complex financial environment, compliance has become a major issue for institutions. Yet many challenges persist, making these processes both costly and inefficient.
Lack of consistency in compliance processes
One of the biggest obstacles to effective compliance is the lack of standardization of processes. Each institution may have its own data collection and management systems, leading to a dilution of crucial information. For example, sensitive documents like identity documents are sometimes exchanged via email, exposing banks to security risks. This mess makes it difficult to trust the data, its security and its authenticity, because it is often duplicated or scattered.
The diversity of KYC/KYB structures
Managing customer data, particularly through the KYC (Know Your Customer) and KYB (Know Your Business) processes, is also a source of complications. Each bank has its own method of collecting information, making processes non-standardized and often incompatible between institutions. This lack of harmonization not only complicates the sharing of information but also leads to a multiplication of procedures for similar data. Although complete standardization seems difficult to achieve, improving KYC processes is crucial.
The high costs of compliance
All these dysfunctions translate into exorbitant compliance costs. For large institutions, these costs can reach several tens of millions of dollars. Additionally, this complexity overwhelms front-office teams, who should be focusing on higher value-added tasks, such as revenue generation, but often find themselves drowning in compliance-related administrative tasks.
The impact of blockchain and artificial intelligence on compliance
Faced with these challenges, blockchain and artificial intelligence (AI) technologies offer promising solutions to transform compliance in the financial sector.
Traceability and security
Blockchain offers an effective response to these challenges. First, it guarantees the traceability of data. Every action performed on the information is recorded and auditable, increasing confidence in the integrity of the data. Thanks to this transparency, institutions can demonstrate their compliance with current regulations. In addition, the concept of “Golden Copy” makes it possible to create a unique, secure and audited version of the data. This eliminates duplication and ensures that all stakeholders have the same reliable information.
Automation and efficiency
Furthermore, the integration of artificial intelligence into compliance processes opens up new perspectives. AI can automate many tasks, thereby reducing human errors. For example, KYC data analysis can be automated, allowing customer information to be validated quickly. Thanks to this automation, the time spent managing sensitive data decreases considerably. As a result, teams can focus on more strategic and revenue-generating missions. AI can also identify patterns in data that might go unnoticed by a human, strengthening fraud detection.
Improved collaboration
Additionally, blockchain facilitates collaboration between financial institutions. With a decentralized database, banks can share information securely and transparently. This not only improves compliance but also promotes better collaboration between industry players. Institutions can thus work together to combat money laundering and other illegal activities, sharing relevant information while respecting data confidentiality.
Wecan Comply – Revolutionizing compliance management
At the heart of this transformation, Wecan Group positions itself as a leader in the field of secure data management solutions. With its flagship product, Wecan Comply, the company is already revolutionizing the compliance practices of more than 100 financial institutions, including many Swiss private banks.
Data standardization and security
Wecan Comply allows institutions to standardize and secure their data while simplifying compliance management processes. Thanks to blockchain, data is not only protected but also easily accessible, making it easier to manage.
The integration of artificial intelligence
One of the next developments at Wecan Group is the integration of artificial intelligence into its solutions. This will allow the AI to reconcile data across banks, even when the KYC forms are different. In addition, AI will be able to analyze and standardize the information collected, making the management of the diversity of structures more effective.
An unprecedented transformation
With this combination of blockchain and AI, Wecan Group is poised to transform the way financial institutions manage compliance. The solutions offered by Wecan Comply provide answers to problems long considered insurmountable in the field of compliance.
In short, the alliance of blockchain and artificial intelligence represents a real revolution for the financial sector. Wecan Group, with Wecan Comply, is paving the way for more secure, efficient and standardized compliance management. As institutions seek to navigate a complex landscape, these innovations may well be the key to overcoming compliance challenges and ensuring greater trust between banks and their customers.
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