The benefits of auto-compliance for Utip Technologies Ltd brokers.

Since every year our fast-moving world is becoming increasingly digitized, countering fraud in the e-commerce field has become a crucial issue. Hacker attacks can cause serious financial damage and undermine the reputation of companies. Manually performed compliance processes cannot cope with a great number of such attacks. Therefore, the development of automated compliance as a system with elements of artificial intelligence is very important for protecting enterprises from hacker threats.

My name is Victoria Troshkova, and I’m a specialist of the Partnership department in Utip Technologies Ltd. Company. In this article I’ll tell you about the benefits of the automated compliance system, as well as what points should be fulfilled and which tips should not be neglected when completing this procedure.

What is compliance?

In simple terms, the concept of compliance itself means meeting the requirements. In the brokerage business, this term refers to the process of verifying the client’s identity.

KYC and AML standards are the basis of security in the financial sector

To successfully complete compliance procedures, you must adhere to the KYC and AML policies. These are the standards by which the broker undertakes obligations to combat money laundering and terrorist financing.

The modern financial market stands for complete transparency of transactions and the rejection of anonymous operations. KYC systems collect data into databases to identify clients and risky transactions.

For example, there are solutions based on artificial intelligence that verify identity using an ID photo. They analyze the image based on many parameters and compare the location of the graphs with the original document. This helps to ensure the reliability of the customer base and reduce fraud using other people’s data.

Such systems are important to protect brokers and create a transparent market for services. They automate routine checks and improve security.

The main advantages of KYC process automation

1. Reducing time and increasing efficiency. Instead of manual data entry and a lot of paper documents, automated tools allow brokers to collect and analyze information quickly.
2. Improving accuracy and reliability. Automation of the KYC process eliminates the possibility of errors associated with manual data entry. Automation systems ensure accurate data matching, which makes it possible to detect potential risks and fraudulent activities.
3. Matching to the regulatory requirements. Automated KYC tools help companies comply with regulatory requirements related to customer verification.
4. Cost reduction. Automation of the KYC process reduces the cost of manual processing and customer verification.
5. Improved customer experience. Сustomers can go through the identification process faster and more conveniently using automated KYC tools.

Automation of inspections through sanctions lists

In recent years, the business has faced new risks, linked with sanctions, counter-sanctions regulation and legislative changes.

Special online tools based on artificial intelligence have been created for quick and reliable check the presence of customer names in the sanctions lists, as well as the names of their relatives and linked persons. The data in such databases is updated regularly.

There are functions for reporting suspicious transactions and verifying documents for authenticity. This helps to identify whether clients have been on the sanctions lists before.

Such tools make customers check for compliance with regulatory requirements easier and faster. Therefore, their automation reduces the risk of errors and simplifies the work of employees.

Сompliance automation is a prerequisite for the brokerage companies development

In 2023, the combating money laundering in the cryptocurrencies reached a new stage of development. The growing popularity of cryptocurrencies forced regulators and governments around the world to pay more attention to this issue.

There are even more opportunities to hide and launder dirty money than before. Cryptocurrency is very convenient for money laundering due to the irreversibility of the transaction, anonymity and uncertain regulation and taxation.

According to DeFiLlama, in 2023, cybercriminals stole about $1 billion from the crypto market. Exchanges such as Binance must exercise increased vigilance and caution due to the enormous pressure on the crypto industry and regulatory compliance requirements.

There are two key tools in the fight against money laundering: transaction monitoring and enhanced due diligence. Automated systems simplify the work process significantly, therefore the integration of such solutions is inevitable for scaling the business of brokerage companies.

Advantages of compliance automation:

• reducing errors, inaccuracies and data loss;
• preventing the financing of terrorism;
• matching with the requirements of the regulator and international law;
• increasing trust due to the high level of reliability and legality of the platform;
• reducing time for processing documents. 

When is compliance automation really necessary?

Often, for small businesses, the automated compliance system implementation may lead to the unpleasant financial effect, so it is not worth it.

The main task of compliance is to make it effective, and not just exist on paper, or moreover, overload the business with unnecessary control and additional costs.

Automated compliance is really necessary for brokerage companies if:

• Broker has dozens, hundreds, or even thousands of clients that it cannot check manually.
• The company does not have enough employees and needs to automate the counterparty verification process. The automated compliance system will allow monitoring clients on an automatic basis: as soon as the information is updated in the counterparty’s profile, a corresponding notification will be sent.
• The company is already using manual compliance methods, but planning to scale up in the future. In this case, the transition from manual compliance procedures to the automotive version will be economically beneficial. Very often, companies turn a blind eye to losses from inefficient manual compliance or act blindly, being completely uninformed of auto-compliance financial benefit.

Tips that will help you choose a technical solution for a brokerage site:

Evaluate your capabilities in advance. Highlight the main company priorities and policy, for complying with legal requirements, and study the rules for maintaining  customer data.

Carefully study the requirements. Study all requirements and be ready to provide all the necessary documentation.

Contact the professionals. Connect with the specialists of Utip Technologies Ltd. to get all additional information and assistance in choosing a supplier for automated compliance system implementation. Our staff will introduce you to our partners, who will assist with simplifying the process, and advising you at every stage.

Following the advice will help you to build a reliable compliance process and reduce reputational risks. Furthermore it will make the work with international contractors easier, since the presence of policies and the organization of a compliance process corresponding to the world’s leading practices is an increasingly common requirement for the establishing partnerships.If you would like to receive more detailed information about the auto compliance system and its integration, please leave a request on our website. Technical questions may take enough time that brokers might be able to use them to solve more important issues. That’s why we are always ready to help clients to reduce their time costs. The managers of the Partner Department of Utip Technologies Ltd. will redirect you to our trusted and qualified partners. They are ready to assist you and provide all necessary information.