Analytics is a powerful tool for regulation and can be used to prevent financial crime, a global report on data has revealed.
The research from regtech company Cube and fintech research firm Burnmark, explores the evolving possibilities presented by data within financial services, and asks whether it provides a solution to complex compliance.
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The study of 160 global financial institutions found that an increase in digitisation has led to the creation of data with different sources, uses and processes coming to the fore.
The research showed biometrics including facial, fingerprint or voice recognition is increasingly used to verify identities and prevent fraud, while predictive analytics uses statistics to determine the likelihood of fraudulent transactions.
It revealed that machine learning can combat money laundering through analysis of customer behaviour and transactions.
The report forecasted the financial sector is moving towards a situation where one or a combination of technology tools will not only assess risk but also address regulation and compliance.
The research found that alternative data – that is, data not within traditional data sources such as financial statements – had the biggest impact on financial institutions and regulation in 2020.
“2020 saw a seismic shift in how financial institutions conducted business, with data taking centre stage,” said Ben Richmond, founder and chief executive of Cube.
“Changes are continuing to happen in 2021 and the key is to stay smart and use the tools at your disposal. Data has the ability to improve the company and customer relationship – using it intelligently will help us transform compliance and navigate change.”
“Good innovation and digital transformation is, in essence, a derivative of good data and data management,” said Devie Mohan, founder of Burnmark.
“2020 was a year where this has proven especially true, with data points, sources, analytics and tools evolving quickly to support much faster digital transformation than ever before. Intelligent and efficient use of data will undoubtedly continue to be a theme for 2021 as well.”