Curious as to what marks the crossroads between compliance and technology?
Our webinar in April tackled exactly that: the many uses of artificial intelligence and technology in the wonderful world of compliance.
Starring Julia Ront and Anton Vedešin, the CEO and Technical Founder of Vespia, respectively, this webinar discussed the role being carried out by technological innovation in helping companies meet their regulatory obligations and avoid being penalised by the authorities.
Topics broached included KYB, ESG, cryptocurrencies, remote work, data quality, chat bots and plenty more!
In case you missed it, the event’s full transcript (edited for readability) has now been released and is available exclusively to AGRC members.
For the rest of you, here are a few of the event’s main highlights.
And don’t forget to register to AGRC to benefit from this and plenty other perks.
How has the shift towards remote work, which has been spurred by the ongoing pandemic and the rise of the digital nomad, impacted technology’s role in the compliance industry?
Julia Ront: “So I see that in this current world we are living, it has a lot to do with trust. The role of trust has definitely increased. And with our personal experience, we are all the time interviewing developers and we always ask this question: What thoughts do you have regarding Vespia’s product and business verification in general? And we love that the answer they always give is, “Hey, if you guys were around like a few years ago when I was just starting off as a freelance developer and working with different companies, oh my God, you would have saved me so much time.” Oftentimes, people in the software business working remotely, they often get scammed, they make decisions fast, they want to really get this job, to get this gig, and they agree to something, and then money never is received unfortunately. So they said, “Yes, even as a developer, I would use Vespia to just check the businesses.” So it is not only about the businesses hiring people remotely and working with freelancers and checking them, but it is also vice versa, people checking the companies.”
Do you have any thoughts on cryptocurrencies and the push by governments to regulate these assets? Any ideas on how technology or AI can be a protagonist in helping companies comply with growing regulatory obligations in this sector?
Anton Vedešin: “Obviously, the regulations and the regulators usually behave according to this game theory where if you basically control or you have too much control, you have a lot of controllers, then it might create a burden on those companies who basically are transparent and they do only good and this type of things. And vice versa, if you are under control, then those companies who want to break the law, who want to abuse the law, they get the profits, they do not pay taxes and so forth. So usually it is all about balance.”
“From my perspective, AI can help to keep this balance because AI, like blockchain, it could be a third party that is analysing, let us say, transactions, analysing the data, and so forth, and just give some signals to the official, so there might be a further check needed or something like that. So the other companies should not expose all the data or the exposed data every time and vice versa, there is a lower chance that somebody will just abuse the laws and basically act inappropriately.”
Do you think there is a place for a digital assistant like a chat bot in the compliance industries as one of the AI powered tools?
Anton Vedešin: “I have heard about this type of solutions. Obviously, it is a good move to make it easier. At the same time, it depends on the audience. It is pretty easy to book an airline ticket or book a hotel using the chat bot, because it is kind of obvious, the procedure, the questions to people. But when we get into compliance, different people have different knowledge and depth of knowledge in specific areas, and the chatbot usually communicates with the text so it would be pretty hard to explain a lot of terms, explain a lot of things, because when you have, let’s say, a dashboard or a control panel, okay, it could work for smartphone or computer, but basically you can have these icons where you can read more if you don’t know certain terms or you can get some guidance with pictures, like how this works, how this happens, and so forth. So from my perspective nowadays, potentially a little more guidance should be given to the user so they really understand what is happening there, so I would rather use not the chatbot but something which can give me more description on the topics.”
What does the future of regtech have in store for us?
Julia Ront: “This is my favourite question. I love thinking about the future of regtech and I think honestly regtech is going to become its own category. Currently, oftentimes, we regtech people when we go to regtech conferences, we know what regtech is, we can we always see ourselves and check the right boxes, but we are also a start-up and we oftentimes go to these general conferences and start-up conferences, and it is always a struggle. Am I a fintech? What am I? I do not know usually, regtech is considered to be under fintech, it is the enabler, it is a supporter of fintech, it was created for fintech obviously and the financial world, but I think it is going to come out of the fintech part and just become its own category. I think because regtech is not only about regulatory technology and regulatory compliance anymore, but also expanding so it is going into logistics and e-commerce and the sharing economy and Airbnb and bookings, so it has a lot to do with trust, as I mentioned before. So trust is super important, we are also promoting building trust and knowing and trusting your customers, partners, and so maybe this category is going to be actually renamed, maybe it is going to be Trust Tech or verification or something, so this is the future that I personally see.”
“Another thing is definitely that predictive analysis is a major thing. So, yes, currently we are concentrating a lot on what is happening with people, with companies, in terms of anti-money laundering today, but it’s going to be the trend, it is going to be that, okay, but what is going to happen with this company in five years or next year? Is it going well based on what we already have or is it going poorly? Because, usually, compliance is necessary because you want to strike a deal, probably some sort of a deal, some sort of a contract, and if you base your decision without actually thinking what is going to happen with this deal in the nearest future, then, yes, you can get stuck with not the very best deal. So predictive analysis, I would say, predictions.”
Another thing I see is data quality. So there was a trend for some time in the compliance world of who had the most sources, who had the best, who had the most registers, the most Dun & Bradstreet attributes, whatever. It was the trend and there was just the strength of collecting as many sources as possible and just throwing a bunch of data at the user and letting them figure it out. Once we started Vespia we saw this as a problem and did not want to do it this way, just collect a bunch of sources. It’s more about the data quality and I’ve read a few reports that also say that this is going to be the trend and we’re not the only ones fortunately who have noticed this, that, okay, there are gaps in the data, there are gaps even in the business registers, them not having I don’t know owners or shareholders of a company, so it’s going to be about data quality and also presenting the data in a more easy, graspable way for the decision-making process to be faster, smoother, and also maybe finding some alternative data sources, not just the traditional sanctions lists and business registers, but maybe social media, LinkedIn profiles, crypto wallet information, etc. So some alternative sources definitely.”