The world celebrated a lot of heroes in 2020. Healthcare workers, first responders, scientists, and community organisers have featured prominently on the covers of magazines and in news stories, and for good reason.
When a pandemic rocked the world, they fought on the front lines to ensure everyone would eventually be able to return to safe, happy, and healthy lives.
As the world slowly returns, another group of professionals is quietly preparing for a surge in importance: KYC compliance professionals. Unlike pandemic responders, those who work in KYC compliance will rarely, if ever, find themselves covered by the news. They will not be celebrated much outside their workplaces, and even there, leaders may not fully understand or appreciate their importance.
For a long time, compliance has been considered more of an administrative checkbox exercise rather than a value add. Compliance professionals help companies comply with regulations, avoid fines, and keep companies’ reputations intact. While that is true, the purpose behind their work is far from boring red tape. These are the people fighting on the front lines of financial crime, helping financial organisations ensure funds don’t fall into the wrong hands, and protecting the people of the world from fraud and theft.
There may never be a “Year of the Compliance Professional” like 2020 was the “Year of the Healthcare Worker.” That’s fair — beyond war itself, few challenges in human history measure up to the one healthcare workers faced this year. However, even if we do not celebrate compliance professionals in magazines and in the news, the world owes a debt of gratitude to this group.
Post-COVID: The Age of Compliance
Parts of the world have already begun to return to normal (or “new normal”). As people return to work or get new jobs, start new businesses, and travel the world again, all that activity will lead to a steady increase in financial transactions.
Meanwhile, regulators have been busy wrestling with the challenges of KYC and AML. The pandemic may have ground the world to a halt, but criminals rarely rest. In the EU, regulators have used some of this time to evaluate AML regulations and begun putting into place new rules to guide organisations on how to prevent financial crime. Further, in the US, the National Defence Authorisation Act recently added new requirements regarding ownership disclosures to prevent the use of shell companies for illicit finance.
These factors lead to the same conclusion. More activity from the general population means the world will need compliance professionals. More oversight from regulators means the world will need compliance professionals. And more scheming from criminals means…well, the same.
The world has spent so much time in uncertainty and doubt, people are now eager to start spending and transacting as much as possible, as soon as possible. Those who work in compliance will have to manage customer expectations without compromising on their duty to adhere to the rules. But compliance professionals don’t want to stop the world from healing: they want to protect it from those who would take advantage of its vulnerable state.
New tools like AI and machine learning will help KYC professionals speed up their compliance processes to match regulators’ demands, but there will be growing pains in 2021. Those tasked with holding back the tide will face pressure from all sides, yet to prevent money laundering, fraud, and funding of bad actors, they will help the people of the world access and use the financial products they need while shielding the population from criminals who would do them harm. Instead of losing patience with compliance professionals this year (or overlooking them altogether), let’s take a moment to remember the people on the front lines of this secret battle and the important work they do for all of us.