Efforts to conduct know-your-customer (KYC) and anti-money laundering (AML) operations more efficiently are more likely to begin after the financial services industry is better prepared for regulatory deadlines coming at the beginning of 2018, like MiFID II, said William Hartnett, managing director for market infrastructure investments at Citi, who spoke on a panel about the future of fintech investment at the Swift Business Forum in New York on June 14.
“As the dust settles, firms will start to look at more strategic solutions,” he said.
The industry is searching for innovative technology that improves upon KYC and AML operations, according to Dan Kittredge, managing director at Napier Park Financial Partners, a private equity firm that invests in fintech and financial services solutions.
“Regtech will be an important space,” he said. “We’re still trying to figure out what solutions will solve KYC and AML problems, what innovative technology will be differentiated and be the solution that is adopted.”
Solutions for KYC and AML are or will be “late in the game,” said Hartnett, cautioning that firms cannot completely rely on an outside solution. “Ultimately, firms are not going to outsource, because we’re ultimately responsible when something goes wrong,” he said.