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Re-thinking site visits and call reports in the name of innovation, efficiency and sustainability

Times of crisis often lead to an odd mix of tragedy and innovation, and the global COVID-19 pandemic is no exception. Governments around the world rightfully prioritise human lives at the immediate cost of their economy in an attempt to contain the pandemic and flatten the curve

Times of crisis often lead to an odd mix of tragedy and innovation, and the global COVID-19 pandemic is no exception. Governments around the world rightfully prioritise human lives at the immediate cost of their economy in an attempt to contain the pandemic and flatten the curve. Financial institutions have been quick to adapt to new circumstances and adopt remote working as a new normal. It is no secret that the financial services industry is risk averse, but in light of recent developments, the industry is faced with the unavoidable truth that it must modernise and innovate in order to make it through this crisis, and the one after that.

Correspondent banks are also forced to revisit their plans to perform detailed site visits and call reports aimed at providing assurance that their counterparties are managing financial crime risk effectively.

Any experienced compliance officer or banker knows that regulators are unforgiving of lapses, regardless of macroeconomic conditions.

The FATF, in its statement about the COVID-19 crisis, encouraged regulators and financial institutions to use technology to that effect: “Financial technology (Fintech) provides significant opportunities to manage some of the issues presented by COVID-19. In line with the FATF Standards, the FATF encourages the use of technology, including Fintech, Regtech and Suptech to the fullest extent possible.” (FATF, 2020)

For correspondent banks, this means replacing ineffectual call reports and costly site visits for a technology-enabled alternative, the Elucidate FinCrime Index (EFI). Doing so reduces costs, increases effectiveness and speed of due diligence, increases the accuracy of risk assessment, and reduces carbon footprint.

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The EFI is the digital ID of the correspondent banking world, offering a secure and reliable alternative to costly and subjective processes. It automates the completion of critical regulatory requirements for risk assessment, provides monthly reporting with clear risk scores, and enables financial institutions to set KPIs and monitor risk levels.

The EFI dramatically increases employee efficiency through automation and clear articulation of issues and solutions, without the need to perform site visits or call reports.

Now is the time to evolve traditional financial institutions due diligence, with effective, sustainable, and data-driven financial crime risk quantification.

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