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Ten Years after the Financial Crisis: Leveraging Technology within a Changing Compliance Landscape

John Dyer, Deputy Chief Compliance Officer, Western Union
John Dyer, Deputy Chief Compliance Officer, Western Union

John Dyer, Deputy Chief Compliance Officer, Western Union

What has been the most significant change in regulation since the financial crisis?

Looking back at the past ten years since the Global Financial Crisis, we can see that the regulatory framework has significantly shifted. Following the 2008 financial crisis, financial institutions renewed their commitment to compliance through all levels of their organizations. To better understand and mitigate risks, and avoid the pitfalls of the past, organizations set off a compliance hiring boom.

How has the age of technology impacted this shifting regulatory framework?

Initially, many financial institutions adopted a non-risk-based approach to compliance, but in our increasingly tech-focused world, companies are always looking for ways to be more efficient across all business units, and technology has proven a strong solution. Intelligently deployed technology has grown into a critical role for compliance functions. It can help ensure organizations are smarter, faster, and more effective with each transaction. Plus, technology also helps prevent institutions’ systems from being used for illicit purposes, helping prevent fraud and identify money laundering, protect customers, and reducing risk overall. In the past ten years, technology has become a reliable ally in compliance, and will only become more effective in the future.

How does technology affect the approach to risk management?

In today’s technology-dependent world, data is an incredible asset in approaching risk, and it will only become more important looking to the future. Companies can use a risk-based compliance program. To be successful, they need to identify and understand risk, so they can use data to guide them in making sound business decisions and ultimately create a successful compliance program that is commensurate to risks.

To help identify those risks, companies must make investments in and enhancements to compliance operations, especially in technology, as technology and data can help mitigate many risk factors that companies and institutions face today and in the future.

How has Western Union leveraged technology to adjust to the changing compliance landscape?

Technology has a critical role to play in how Western Union manages its data. Both artificial intelligence and machine learning tools have been actively employed by the company’scompliance function over the past number of years, continually evolving to adapt and respond to changing conditions, regulatory expectations and feedback. Given the global nature of Western Union’s business and the rate of transactions, the Company is required to collect a large amount of data, which can help advance these types of modeling tools and techniques. Predictive models can ‘learn’ many different patterns that separate elevated risk behavior from normal behavior, even uncovering risky patterns that are undetected by subject matter experts and investigators. Using these models in conjunction with the subject matter experts has potential to enhance the ability to monitor, and so mitigate, risk.

Looking at the next ten years, what can companies do to better approach risk?

Every company’s risk assessment is unique, and there’s certainly not a singular approach that will work best for every financial institution. Companies must look within and outside to find the tools and processes that will best mitigate risk as technology continues to evolve. Technology, data and metrics can be strong allies to mitigate risks and ensure compliance in the years to come.

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