Compliance and innovation can coexist

Finding the right balance between innovation and regulation is no easy task. The past four to five years have seen the banking sector try to adapt to a more tightly controlled environment, as the fallout from the financial crisis has brought a host of new regulations

Though few would debate that changes were required, putting programmes in place to meet these new regulations is something that takes investment. Regulatory compliance, however necessary, is one of the contributing factors that have held banks back from adopting innovative new technologies like mobile and cloud

The heavy investment in compliance has come at a cost, as evidenced by the numerous outages experienced by many of the frontline banks in recent times. Now is a time of transition in the financial sector, as legacy systems creak under the strain of the digital age. IT departments, squeezed from all angles, often simply can’t keep pace with the demands being placed upon them

But compliance and innovation don’t always need to be in opposition. One area where the two go hand in hand is with Know Your Customer (KYC). KYC essentially refers to the customer identification process. It involves making reasonable efforts to determine true identity and beneficial ownership of accounts, which in turn helps the banks to manage their risks prudently

Knowing who they can trust prevents banks from being used, intentionally or inadvertently, by criminal elements as a channel to fund illegal activities. Automation in the account opening process using smart capture technology can ensure that the mandatory documents needed for compliance are submitted to the bank

The benefits go beyond compliance as well. Automating these tasks using Intelligent Capture, powerful workflows, and flexible content management helps banks to speed up process, reduce errors, save money and help banks in areas such as customer experience

So although some sacrifices may need to be made in the short-term to meet the regulatory burden, compliance and innovation don’t have to be mutually exclusive. In fact, the two can happily coexist