The role of RegTech in a global economy

In today’s interconnected world, we’re seeing more businesses operate overseas—in fact, World Bank figures revealed 80% of global trade involves the exchange of goods and services across borders. While this global reach offers new opportunities, it also introduces complex regulatory challenges, particularly where financial crime and fraud are concerned. So, it’s crucial that businesses who do work overseas are staying ahead of evolving regulations and prioritising their regulatory compliance.

The compliance challenge in a connected economy

Regulations vary significantly from one country to another. What is acceptable in one jurisdiction may be considered a compliance risk in another. Companies operating internationally must adhere to stringent AML regulations to prevent financial crime, conduct KYC checks to verify customer identities, and perform KYB checks to ensure they are engaging with legitimate businesses.

Traditionally, compliance has been a time-consuming and costly process, often requiring manual verification, cross-referencing multiple data sources, and keeping up with frequent regulatory changes. The risk of non-compliance is significant—not only in terms of financial penalties but also in reputational damage. As governments and regulators increase their scrutiny, and customer expectations rise, businesses need smarter, faster, and more reliable ways to meet compliance requirements.

Why invest in compliance solutions?

Not only is compliance a legal obligation, but it also has the power to enhance the experience your customers receive—particularly at the point of onboarding when you have as much chance to lose business as you do to gain it. But, with the global AML software market estimated to be valued at $3bn this year, it’s clear more businesses are leaving manual compliance checks in the past.

Let’s take a closer look at automated compliance solutions and their advantages.

1. Improved efficiency and time savings

Manual compliance checks can significantly eat into your team’s resources and take up time spent on other high value-add tasks. Not only does it involve searching databases and comparing submitted data, but there’s also reporting and documentation elements to it as well. When you invest in an automated compliance solution, you can get immediate results back on large datasets of personal information to efficiently and effectively validate identities and other important information. This can save hours of manual work, and therefore costs.

2. Enhanced accuracy

No matter how well-trained your team are, it’s only natural for humans to make mistakes every once in a while. But making a small mistake with compliance can result in big consequences for the business, with reputation and financial health on the line!

Automated compliance solutionsfollow pre-defined rules, and therefore you can benefit from greater peace of mind that important information won’t get missed during checks.

3. Real-time monitoring and alerts

While checking any potential customers and business partners at the point of onboarding is non-negotiable when it comes to AML guidance, continual monitoring of your established client roster is just as important.

Automated compliance solutions have the ability to run in the background and flag any suspicious activity or changes that impact the risk potential of a client or business partner. This enables you to take the necessary precautions to safeguard your business—whether that’s implementing limitations and restrictions on them or reporting suspicious activity to the National Crime Agency. By having checks continuously run in the background, you can ensure perpetual compliance.

4. Increased cost-efficiency

Compliance can be extremely costly when you’re doing things manually, but when you automate these tasks, you can cut your business’s operational costs by reducing the need for excess team members to complete these tasks.

Additionally, you’ll also dodge the potential large fines imposed by the FCA for non-compliance, as well as saving your business from reputational damage, which can have financial impacts as well.

5. Scalable compliance management

As any company grows, so does its customer base—and therefore, its risk potential for non-compliance. Whether you’re planning to expand into new markets or increasing your outputs, automated compliance solutions can adapt as needed, without the commitment of recruiting and retaining further resources to help manage the effects of the growth.

The future of compliance in a digital economy

As regulations evolve and financial crime becomes more sophisticated, the need for scalable, technology-driven compliance solutions will only grow. The future of compliance is not just about meeting regulatory requirements but doing so in a way that enhances efficiency, reduces costs, and provides greater security.

RegTech solutions will continue to play a crucial role in this transformation, helping businesses stay ahead of compliance challenges while focusing on growth. In a global economy where trust and security are paramount, leveraging the right technology is not just an option—it’s a necessity.

By integrating RegTech into their compliance strategy, businesses can mitigate risk, improve operational efficiency, and confidently navigate the complexities of global regulation. The world is only becoming more interconnected, and with the right tools, businesses can thrive in this evolving landscape while staying firmly on the right side of the law.

Looking to streamline your compliance processes? Veriphy can help. With automated AML, KYC, KYB, and even Pre-Employment Screening (PES) checks, we can take the stress of perpetual compliance off your hands. And with our flexible pricing model, you can keep costs down while staying on the right side of the regulators. Get in touch today to discuss what we can do for you.

The role of RegTech in a global economy