Has compliance automation finally come of age?

Compliance automation has been talked about for over a decade. The promise of automating third-party screening and onboarding, combined with “always-on” compliance monitoring, is widely seen as the solution to ever-growing AML and KYC demands. The benefits are already clear. For businesses, automation can reduce compliance costs and workload dramatically. In our recent Perpetual KYC Guide, we showed that businesses can reduce costs and workload by over 80% compared with manual processes. For compliance professionals, this translates into less time spent on frustrating manual tasks and more time focusing on proactive risk-management and the more rewarding aspects of their jobs. Yet with all these benefits on offer, many businesses are still hesitant to embrace automation. In this article, we look at what’s changed in the world of compliance automation and why it might be time to take another look.

Technology is no longer the problem

In essence, compliance automation involves a highly configurable algorithm that screens third parties to assess risk according to the criteria you define. It then determines which third parties are safe to onboard directly and flags those that require further investigation. This requires two things: a cloud-based risk engine and a lot of accurate and up-to-date data.

Previously, the technology powering risk-engines was holding things back while digitalisation caught up with expectation. To carry out real-time assessment, it first required cloud infrastructure with the speed and responsiveness to power assessment platforms. These in turn required cloud-based data platforms that could make vast quantities of data available in milliseconds. The good news is that we are now at the point where digitalisation, cloud computing, and data technology have aligned to the point where real-time compliance automation has become a compelling proposition (If you haven’t tried one of the new generation of automated risk engines recently, you probably should).

AI will soon put data authenticity in focus

It goes without saying that an automated risk engine can only be as good as the data it has available to analyse. This is even more the case as the world enters unknown territory in terms of AI-generated data and synthetic truth. It is becoming increasingly important to understand where your data comes from – and whether you can truly trust it. This presents a fine balance for compliance professionals. It also creates grey areas that can lead to one of the biggest frustrations compliance professionals face: the dreaded false positives.

False positives are a matter of sensitivity

Many early attempts at compliance automation were crushed by the weight of huge numbers of false positives. Immature or unfit-for-purpose tools (such as spreadsheets) tended to generate vast numbers of hits that were actually misses. These false positives were caused by not being able to access rich enough data to differentiate between entities or people who shared the same names. This is a frustrating problem for compliance professionals and can contribute to “compliance fatigue” that can undermine the effectiveness of compliance operations. It can also have very real impacts on a company’s bottom line. In our recent survey we found that 55% of European businesses have been forced to reject potential customers due to a lack of risk visibility.

Being unique matters when it comes to data

The solution is to cross-reference multiple data sources to gain a more granular understanding of who you are really dealing with – so you can determine whether they actually present a risk. This is one of the areas where Dun & Bradstreet’s data offers a distinct advantage. The Data Universal Numbering System (Dun & Bradstreet D-U-N-S® number) was introduced in 1963 to assign a unique number to every business or entity. Today, there are over 540 million records, each with their own unique identifying number. This means that all data related to that record can be consolidated by linking it to its identifying number. This also makes it possible to track the current and historical linkages between entities and provides greater granularity when it comes to tracking Ultimate Beneficial Ownership (UBO). By combining the corporate linkage data provided by D-U-N-S with watchlist and sanction screening lists, businesses are able to gain deeper insight into who they are really dealing with – and who they are connected with.

The new generation of compliance tools is here

By combining tried-and-true compliance techniques with cutting-edge data technology, Dun & Bradstreet has developed D&B Risk Analytics Compliance Intelligence. This state-of-the art risk engine harnesses the largest source of business information in the world: Dun & Bradstreet’s Data Cloud.

It gives compliance professionals the tools to accelerate third-party onboarding, reduce compliance costs and workloads, and implement always-on compliance monitoring for Perpetual KYC. But don’t take our word for it, try it for yourself. Register below and to see the latest possibilities whether you are taking your first steps or your next steps towards compliance automation. 

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Accelerate your third-party compliance and evolve to Perpetual KYC with D&B Risk Analytics Compliance Intelligence. By defining your policy in our highly configurable risk engine, you can automate your onboarding, accelerate your due diligence workflows, and focus on what really matters. This enables you to increase your compliance effectiveness while reducing your costs and workload. It’s also the foundation for always-on compliance monitoring and Perpetual KYC. By combining our unrivalled ability to identify hidden ownership structures – with over 100 watch lists and sanction lists worldwide – you gain deeper insight and the ability to proactively mitigate risk.