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瑞联银行新闻报道 01.03.2021

Compliance in the RegTech era

Compliance in the RegTech era

Le Temps (01.03.2021) - For two decades, Swiss private banks have been engaged in a new test of endurance as they have had to adapt to a raft of new regulations, tougher tax compliance requirements and the globalisation of their client bases.

For compliance departments, these long-term efforts have required constant investment in terms of time, human resources and the technological tools they need to do their work effectively.

And now this long-distance race has become even more complex because of the pandemic: banks have had to find ways of fulfilling their due diligence obligations regarding opening accounts, of exchanging documents with clients in the required form and of maintaining the security of client data at a time when most staff members are working from home, travel restrictions are limiting opportunities to meet in person and there are even restrictions on sending mail.

Turning to technology

Banks have looked to technology to provide solutions and allow them to continue carrying out these vital tasks: their published results for 2020 show that they successfully rose to the challenge of ensuring business continuity. 

To meet regulatory due diligence requirements when opening new accounts or monitoring existing relationships, the most technologically advanced banks have adopted videoconferencing to identify clients remotely, using secure processes that have been approved by regulators.

As well as identification requirements, the opening of an account gives rise to exchanges of contractual documents and regulatory forms, the originals of which are traditionally signed by the client and returned to the bank. However, constraints on postal services and travel have sometimes caused delay and inconvenience, which can be overcome with the use of qualified electronic signatures. To be “qualified”, an electronic signature must provide the same level of assurance as a handwritten signature as regards the person’s identity and the authenticity of a document’s content. 

Compliance evolves

In practice, these signatures are still not widely used: the technical, legal and regulatory issues involved means that adopting them is a particularly complex and long process. However, some banks are making active preparations to use these electronic signatures in order to simplify relationships with clients and it is likely that they will end up being commonplace.

With large numbers of staff members working from home, banks have had to ensure that employees have the equipment and information they need. Banks have also had to invest in tools that guarantee the security of work done remotely, and to strengthen the distinction between operational and confidential data, all while making sure that the measures taken comply with regulations.

Fortunately, Compliance departments had already entered the RegTech era before the coronavirus crisis, applying new technologies that make it easier to manage regulatory risks and operational compliance processes.

The pandemic has merely accelerated their adoption. Some banks had the foresight, before the crisis broke out, to automate their account-opening and account-monitoring procedure: such automated processes have the three key benefits of being secure, effective and less time-consuming than manual processing of client data.

Digital transformation has also caused the methods and skills applied within compliance teams to change. As well as the ever more specific expertise that they have had to acquire in order to deal with increasingly dense and complex regulations, compliance departments also need people capable of translating new regulations into computer language.

Enhancement, not replacement

For example, those professionals have been vital in developing new e-banking functions – allowing clients to communicate with their relationship managers in a fully secure way, provide documents and carry out transactions – that create new challenges in regulatory terms.

Make no mistake, however: just because a private bank uses an array of new technologies, this does not mean that it will soon resemble a 100%-digital challenger bank. It is hard to imagine purely online banks offering customised solutions to clients who often have an international profile, and so require a multi-jurisdiction approach. 

Similarly, the increasing sophistication of clients’ portfolios makes opening and managing an account much more complex, and requires a level of analysis and expertise that only a private bank can offer. So although digital tools provide a great opportunity to simplify processes, they rely on standardisation, and so cannot by themselves provide the tailor-made service that private banking clients require.

Pure-play private banking

Raoul Jacot-Descombes
Group Head of Risks & Compliance
Go to his Linkedin profile.


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