Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
The Transformative Impact of Instant Payments on Financial Crime Mitigation
Payments | Jul 30 2023
Image: Unsplash/Blake Wisz
The advent of instant payments is revolutionizing the financial landscape, acting as a catalyst for speed and innovation in financial crime mitigation.
This article explores the insights shared by Adam Gable, Product Director of Financial Crime, Treasury, and Risk at Temenos, and Hani Hagras, Chief Science Officer at Temenos, during the Temenos Community Forum in Vienna.
Instant payments demand real-time processing
- This necessitates swift and precise security checks to prevent financial crime. Any inefficiency in this process can lead to interruptions in customer experience, loss of customer goodwill, and potential damage to brand reputation. For instance, a security check that ends up in a queue for manual review or inaccurate checks that lead to customer fraud can have serious repercussions.
- Impact for banks:
- Banks must ensure robust security protocols are in place.
- Gable emphasizes that as checks are conducted, some will invariably require investigation. This time-consuming process can negatively impact customer experience.
- There is a cost factor for banks transitioning to instant payments. They need to proactively consider the systems and processes required for this shift and others payment trends driving the future.
See: Future of Neobanking: Exploring the Landscape of AI-Powered Digital Banks
- Artificial Intelligence (AI) plays a pivotal role in mitigating crime in instant transactions.
- Hagras explains that AI can leverage automation to provide a seamless user experience, coupled with a solid audit trail, making it easier for banks to scale up.
- AI can combat financial crime through sanctions screening and anti-money laundering processes. It can automatically detect fraud while allowing false positives to be processed without interrupting the customer experience.
- AI is responsible for generating models that comply with various regulatory requirements, enabling banks and financial institutions to use AI with trust.
- The key is to use explainable AI, where generated models are easily understood, analyzed, and audited by business users and authorities.
The battle against fraud is ongoing
- Opaque [AI] box models, which do not sufficiently explain the decision-making processes, are not accepted by many regulators.
- Hagras concludes that explainable AI processes are a key focus for Temenos, and meeting current and future AI 'explainability' regulations will be essential.
See: FedNow Real-Time Payment Service Launches: A Game Changer in the U.S. Financial System
Conclusion
In conclusion, the introduction of instant payments is accelerating innovation in financial crime mitigation. With the right systems, processes, and the use of AI, banks can effectively combat financial crime, ensuring a secure and seamless customer experience.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
 |  |  |
Support NCFA by Following us on Twitter!Follow @NCFACanada  |
Related Posts
Sam Bankman-Fried Accused of Witness Tampering Now Awaits Trail Behind Bars – Lessons Learned- Minister Morneau Launches Advisory Committee on Open Banking
- After Shanghai Upgrade, ETH Passes $2k
- Regulation Crowdfunding Surpasses $100,000,000 in Capital Commitments – Signaling an Industry that is Here to Stay and Reaching $1 Billion in the next 5 years
- How to Draw People Into Your Crowdfunding Campaign
- EY 2024 Financial Sector Report: Navigating New Norms
Leave a Reply