Future-proofing your compliance

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It’s important to be ready for the future. That’s something most logical thinking people can agree upon. Being prepared for the future is even more important from a compliance perspective. However, in banking, that isn’t always easy to do since so many banks still work with systems that were created decades ago. Letting go of those systems is challenging and understandably so since almost all of those systems are intertwined and therefore depend on each other. Not to mention that they contain billions of bits of data and that it would be a disaster if that data would get lost. Or, even worse: stolen, because the data migration isn’t handled safely. These risks terrify banks, making them unable to let go of the old and reluctant to embrace the new.

Since the current banking systems are so deeply intertwined, banks fear that making changes in their systems would be a project too complex and too expensive to fulfill. They know that when a little piece of the project goes wrong, it can have a knock-on effect on every single system the bank uses.

Banks have often experienced that a minor update to their online banking system, caused back-end systems to be unavailable as well. With the result of payments not being processed on time. Or, not at all… When a client depends on that payment for a deal to go through, the bank might have to pay out a claim to that client to compensate for his loss. That’s without even mentioning the annoyance it will most definitely cause with clients. If these things happen too often, a bank might even lose clients over it and suffer irreparable damage to its reputation.

Are banks right to fear change to their systems? Or, should they consider that changing to an entirely new system can be less of a complicated and expensive project than they expect it to be? Is it even a realistic idea to hold on to those old banking systems?

You aren’t still using a typewriter, right? So, why are banks still using banking systems of the ‘70s and ‘80s?

The problem with holding on to an outdated system

Remember those days when we used floppy disk drives? Those were invented in the late 1960s by IBM. Most types of floppies couldn’t hold more than 1.44 MB of data. Today, that isn’t even enough data to hold one picture taken with your smartphone! If you think about it, it’s insane how far technology has come in the last 50 years.

If you know this, you can also imagine how a banking system that was built in the 20th century can’t compare to the modern day advanced IT-solutions. Sure, up until now banks are making it work. But don’t those systems crash more often than not? How often does that happen to any of the equipment you’re using at home? It might not be the fairest comparison, but you get the point, right?

Always one step behind

While banks are stuck in the last century, criminals certainly aren’t. They’re always trying to find new glitches where they can break into a bank and optimize their profits. When a leak is patched up, criminals will certainly find another leak. They’re flexible and innovative, and they do not hesitate to invest in new technologies and new ideas. Anything to get their money, and banks are often left as helpless victims.

With the current banking systems used for compliance, banks are like those policemen on bikes trying to catch an offender on a scooter. With the difference being that the policeman can anticipate on the offender’s next move. Something banks can’t do with their current systems. According to LexisNexis and the British Bankers Association, banks are very reactive in their approach to compliance and AML. Which is completely explainable. The truth is: it’s impossible for banks to be proactive in fighting crime since they can’t use their systems to their advantage and any investigative work needs to be done manually. It’s hard to identify suspicious behavior when your systems aren’t made to find patterns or predict dangers. Besides, the current workload is too big as it is to ask compliance agents to do anything other than assessing and handling alerts reactively.

Could the benefits of changing to a new system outweigh the risks? What if a new system is able to reduce the costs of financial crime investigations while safeguarding all you historical forensics data? And, what if that system can prevent fines due to regulatory failings and at the same time reduce the workload compliance departments have to deal with? Wouldn’t such a system be worth the investment?

How BusinessForensics deals with system migrations

If you’re investing in a new system, you want your historical data to be integrated into your new system. It makes no sense to have to keep a legacy system next to your new system only to preserve your data. Besides, your old data contains valuable information that can be used in the new system to solve cold cases and to aid in new investigations.

Data migration doesn’t have to be as big and scary as you envision it to be. Or, might have experienced in the past. Especially when you opt for a system that isn’t a one fit for all solution; but, a solution based on a framework that’s adaptable to your needs and IT infrastructure.

From a technological standpoint, data migration is quite simple. Even though it’s not a matter of copying all your current data and pasting it into the new database, a well-structured approach can ensure your old data integrates perfectly with the new system and can be analyzed with all the benefits available in the new system.

Once your data is migrated, and your new system is up and running you start to see a decrease in your backlog. You’ll see that the user experience is friendly and intuitive. From the get-go, you have more insight into running cases as well as your case history, including your ‘cold cases’! As a result, you have a better overview of the risks that are evolving in your organization.

Find out how 21st-century technologies can make your organization future-proof with less workload while giving you more time and tools to investigate suspicious behavior proactively. Download our white paper ‘The one thing compliance managers can change to save their bank from fines’ here.


Tames Rietdijk

Tames Rietdijk is the CEO of BusinessForensics. His area of expertise lies with Product management, Forensic investigations and Data analytics. His work is focused on improving market mechanisms and operational efficiencies to increase value for his customers.