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The Banking Reviews

Innovation and Compliance: Challenges faced by the Banking Industry

The Banking Reviews - Innovation and Compliance: Challenges faced by the Banking Industry

Neo-Banks, PSD2, Blockchain & Cryptocurrencies, RPA&AI, sustainability, Sia
Partners reviews the major issues and challenges encountered by the banking
sector in 2019.


FinTechs play an increasingly important role in a constantly changing environment.
Recently, a new challenge emerged under the form of new entrants
from the FinTech world: Neo-Banks are attracting more and more consumers
by offering new innovative features, well-designed interfaces and unrivalled
customer experience. The new PSD2 is also changing the payment landscape
by allowing third parties to access bank accounts, provide account aggregation
services to the customers and finally proceed payments on their behalf.


Another key element in this evolving banking sector: Blockchain and namely
cryptocurrencies which need to be regulated. On the one hand, there is no
doubt that the concept of cryptocurrency based on Blockchain technology
is beneficial in terms of lower transaction cost, secure digital transaction &
execution efficiency. On the other hand, more and more illegal cryptocurrency
related activities occur, utilising the feature of the anonymous transaction
and distributed ledger. The risk building up in the financial ecosystem is rapidly
emerging and appropriate governmental response is necessary.


Besides Blockchain, RPA is also a key element which benefits the banking
sector, namely finance and compliance functions.


 > Finance functions at large are under pressure to shrink costs, improve
speed, deal with increasing volumes of complex data and bring new
value to business partners through actionable insights. RPA/AI is providing
finance functions with new opportunities to achieve these aims.


> The repetitive nature of onboarding KYC/AML compliance programs
makes it particularly attractive for RPA solutions. While many of the
tasks that are part of the program are fairly nuanced, they are systematic
and can be followed by a set of automated steps.


The Paris Climate Deal has once again triggered the debate about sustainability.
Banks have an important role in society to contribute to a more sustainable
world and help achieve the goals set by the Paris Climate Deal.


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