Going to fintech events during the last quarter, we quickly realized there was a specific focus that stood out: partnerships. Of course companies participate in events like these to gain contacts, leads, and in the end hopefully more revenue. Both by sharing knowledge about their successful partnerships as well as making connections that could lead to successful partnerships. However, since partnerships appear to be particularly common in the fintech sphere, it made us question if there is something else to the equation. Here are some insights into the various collaborations we have taken note of with regards to anti-money laundering work.
Cross-industry collaborations
Taking initiatives to collaborate and talking with businesses from other industries - facing the same challenges - will undoubtedly help organizations find effective processes and solutions quicker. Anti-money laundering is not only about fighting financial crime, but it has become crucial for enabling business growth. They simply go hand in hand.
Longterm, it is of great benefit for companies to integrate compliance at the very core, to the extent that it’s something the company expects all their employees to be concerned about. Not just a specific team or person. Why? Understanding the importance of having AML working seamlessly comes from seeing the responsibility as the whole company’s. Adhering to AML regulations affects all parts of the business and - if not approached in a holistic way - there will be negative effects on the company as a whole, in terms of inefficiency and frustrations. Cross-industry collaborations help businesses see common patterns, gain team confidence, and adopt the best proactive ways of working with compliance for their specific organization.
Partnerships within Regtech
In the compliance industry, partnerships are especially common between newly founded companies. Many regtech companies that seem like competitors, often end up engaging and interacting with each other, finding that they often really aren’t competitors at all. Although many companies may aim to become the one and only system offering all kinds of tools, that is simply not the case in today’s climate. The sector is quite niched, therefore businesses ultimately tend to focus on mostly different areas - and perfect their main tool(s) accordingly.
Because professionals within Regtech companies see the great effects that automated and streamlined AML processes can have for customers, there is a strong culture of sharing knowledge in order to help fintechs adopt smart compliance tools - for running a smoother business, but more importantly: actually help fight financial criminals.
Partnerships between private and public sector
Governments often state that they have a difficult time keeping up with financial criminals. The landscape is fast-changing as money launderers are ever adjusting to new regulations. Since their whole stream of income from organized crime depends on being cleaned and passed as ‘legitimate’, financial criminals are becoming experts at covering their tracks. In turn, the legal system simply isn’t adapted to such fast changes. This is where the public sector really can benefit from collaborating with regtech companies to find the most efficient innovations and tools to proactively prevent financial criminals from using their services in the first place, reducing the costs in the long run.
