June 23, 2020

The pandemic still rages across the globe with countries in different degrees of lock down or slowly opening up. The impact on financial crime is not clear yet but headlines from last week’s KYC360 weekly update, indicate that it is still present in many shapes and forms.

This article (https://www.theglobaltreasurer.com/2020/06/17/firms-hit-compliance-fatigue-as-fraud-increases/ ) speaks of increased fraud as a consequence of the pandemic and ‘compliance fatigue’ in many companies.

Compliance is simply about adhering to the rules and regulations that have been agreed upon in an organization. If these are far off from what’s practise in the company, complying with all policies might indeed be a stretch, but whoever claimed running a business was easy?

After an initial focus from FIs on internal affairs, organising working from home, review of credit portfolios and – like in Singapore – organising short- and long-term funding for SMEs backed by government stimulus programs, we see a return to ‘normal’ and to the priorities that once were.

Financial Crime Compliance programs were on the backburner for a while but Financial Economic Crime risks have not decreased, while priorities and deadlines have not changed.

Taking all this into account we expect 2 trends to continue:

Off shoring and the use of managed services

Companies realise now that working from home is possible and can work surprisingly well. Moreover, if tasks can be performed from home, it doesn’t matter anymore where that home is located… so why not use talent or managed services in India, Poland, the Baltics or the Philippines?

Distance training

Face to face training in large groups will not happen anytime soon, so FIs will resort to e-learning, webinars, virtual workshops and other forms of distance learning.

Companies that are agile and take a pro-active approach are likely to come out of the crisis best.  Without compliance fatigue.