Banking group urges regulators to approve biometrics and other technologies to ease compliance burden
The Asia Securities Industry and Financial Markets Association says regulators should approve more new technologies for KYC and anti money laundering checks, to help financial institutions lower the cost of compliance, Reuters reports.
“Fintech solutions, facial recognition for example, hold out great hope for the industry, but haven’t been embraced as quickly as some might like by regulators around the world,” said association CEO Mark Austen.
The association is urging its members to help regulators understand technological developments and harmonize standards, as differences in KYC rules across jurisdictions raise the cost of compliance, and the fines for money laundering violations can be onerous.
Commonwealth Bank of Australia was recently fined a record $530 million for breaches of money laundering and terror financing laws.
HSBC tripled its compliance staff headcount from 2014 to 2017 to 8,600 employees, and spent $3 billion on compliance last year. The average number of employees dedicated to KYC compliance at financial institutions has leaped from 68 a year ago to 307, according to an association report.
“Whether KYC and AML (anti-money laundering) headcount will fall comes down to whether the institutions can automate – there are a lot trying to as it means they can cut costs and probably actually improve compliance,” Austen added.
The Monetary Authorities of Hong Kong and Singapore said last year they were exploring the creation of centralized KYC repositories banks could use to onboard new clients, but liability concerns are slowing the process, according to Reuters.
Among numerous recent announcements regarding KYC in Asia and around the world, Finda received a grant from Singapore’s central bank in May to produce a proof of concept for a facial recognition-based authentication solution.