The future of FinCrime and compliance technology - should officers be upskilling now?

    The world is now in the full swing of the Information Age.

    Over the last few decades, technology has worked its way into almost every business sector and evolved from a luxury into a necessity for success.

    The Financial Crime and Compliance sectors are far from exempt. The introduction of FinTech and RegTech alone is thought to have shaken up the industry significantly.

    As a result, FinCrime and Compliance officers have already seen some major changes in how they carry out their roles, and it is predicted that these developments will continue well into the future.

    The question that therefore arises is: Should officers be upskilling on FinCrime and Compliance technology now in order to prepare for these developments?

    Let’s have a look at this in more detail:

    compliance technology

    How has technology affected FinCrime and Compliance officer roles already?

     As the world transitions into an increasingly cashless society, the opportunities for financial crime to take place physically have decreased but have subsequently increased digitally. Therefore, the need for technological preventions and interventions have also amplified.

    Only last year, there was a significant focus on how advanced FinCrime features like intelligent automation and advanced analytics could assist in monitoring and detecting unusual behaviour.

    Plus, just this year, there has been a call to favour contextualised and real-time monitoring of transactions over monitoring in isolation and in batch, alongside a whole host of other considerations.

    At the same time, compliance technology has evolved from simple documentation data storage to encompass digital advancements such as automation, big data, AI/machine learning and more in order to help Compliance officers stay up to date with and manage regulatory requirements.

    RegTech in particular, as noted above, has caused quite the stir by “providing technologically advanced solutions to the ever-increasing demands of compliance within the financial industry.” In fact, it has been said that “Systems, not people, are now the compliance guardians.”

    Subsequently, FinCrime and Compliance experts are looking to digital solutions to combat financial crime and harness regulatory change more than ever before.

    From big data-processing analytics to cybersecurity and other technologies such as blockchain and machine learning - plus much more - FinCrime and Compliance officers have seen a large shift from the more traditionally-known aspects of the role to a greater focus on technical skills and IT knowledge.

    And how is it predicted that tech will continue to affect these roles in the future?

    As technology becomes more advanced, financial criminals will adapt to discover new opportunities for crime and override the controls designed to prevent it. As a result, new regulations will continue being implemented, and new technologies created to align to them.

    Some experts have questioned whether AI will take over the role of FinTech and Compliance officers altogether; indeed, it has been predicted that 50% of financial jobs could be lost in the future due to AI as more departments shift towards deploying technology rather than people to fulfil its goals.

    However, it has been noted that the use of AI and other technologies in FinCrime and compliance are still very much a work in progress. Ultimately, human decision making, skills and abilities will remain the most vital component of success in the field, with AI simply complementing - as opposed to replacing - human judgement.

    compliance technology

    So, should FinCrime and Compliance officers start upskilling now?

    When we consider what FinCrime and Compliance officer roles currently entail and how these roles are predicted to change further in the future due to technological advancements, then yes - upskilling on FinCrime and compliance technology is an important step to take.

    In fact, in a Compliance Risk Study conducted by Accenture in 2018, 59% of employers stated that finding compliance professionals with the right technical skills was their biggest recruitment hurdle last year, and 76% feel that there is a significant gap between the current and required skills for effectively implementing compliance tools.

    Strong technical knowledge will be needed by FinCrime officers in order to better investigate and understand any suspicious activity and subsequently prevent financial crime, while compliance officers with the right technology skills in-house will be called upon to support the development of RegTech to harness regulatory change.

    However...

    This may all seem quite daunting, but as mentioned above, technology and the skills it requires aren’t the be-all and end-all. Many FinCrime and compliance technologies are still in development, and even at their most advanced, will never be able to replace the human skills, experience and abilities of FinTech and Compliance officers.

    As stated by Andrew Davies, vice-president for global market strategy, financial crime and risk management at Fiserv:

    “Having a balance between people, process and technology is critical to maximising the return on technology investment and delivering heightened security in an ever-changing world.”

    And similarly, the ICA states that:

    “[Tech] may not replace the entire compliance function, but as with all industries, its impact at the manual level could be significant. It’s important that we understand this change so that as professionals we are best equipped to deal with the future, whatever it may bring.”

    What next?

    The future of FinCrime and Compliance officer roles is truly exciting. With so many new technologies currently in the works and on the horizon, the scope for officers to expand on their tech skills as well as hone more traditional ones offers a whole new level of diversity to a FinCrime or compliance career.

    In fact, here at Twenty84, we have a number of different roles available that incorporate new and developing technology, and will give conscientious FinCrime and Compliance officers the chance to up-skill and truly advance in their career.

    You can take a look at these roles here, or feel free to get in touch with our team today for more information:

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