Blockchain And AI: A Revolution In Financial Compliance In 2024

In 2024, the financial sector faces increasingly complex compliance challenges. Institutions are juggling disparate processes that lead to high costs and security risks. However, the combination of blockchain and artificial intelligence (AI) offers an innovative solution to improve these processes. This article explores the main compliance challenges and how Wecan Group, with its product Wecan Comply, is transforming this landscape.

The challenges of financial compliance

In an increasingly complex financial environment, compliance has become a major issue for institutions. However, many challenges persist, making these processes both costly and inefficient.

Lack of consistency in compliance processes

One of the main obstacles to effective compliance is the lack of standardization in processes. Each institution may have its own systems for collecting and managing data, leading to a dilution of crucial information. For example, sensitive documents such as IDs are sometimes exchanged via email, which exposes banks to security risks. This disorder makes it difficult to trust the data, its security, and its authenticity, as it is often duplicated or dispersed.

Diversity of KYC/KYB structures

The management of client data, particularly through KYC (Know Your Customer) and KYB (Know Your Business) processes, is also a source of complications. Each bank has its own method for collecting information, making the processes non-standardized and often incompatible between institutions. This lack of harmonization not only complicates information sharing but also results in multiple procedures for similar data. While complete standardization seems difficult to achieve, improving KYC processes is crucial.

High compliance costs

All these dysfunctions result in exorbitant compliance costs. For large institutions, these costs can reach tens of millions of dollars. Moreover, this complexity absorbs front-office teams, who should be focusing on higher value-added tasks such as revenue generation, but often find themselves swamped with administrative compliance tasks.

The impact of blockchain and artificial intelligence on compliance

Faced with these challenges, blockchain and artificial intelligence (AI) technologies offer promising solutions to transform compliance in the financial sector.

Traceability and security

Blockchain offers an effective response to these challenges. First, it ensures data traceability. Every action performed on the information is recorded and verifiable, which increases confidence in data integrity. Thanks to this transparency, institutions can demonstrate their compliance with current regulations. Additionally, the concept of “Golden Copy” allows for the creation of a unique, secure, and audited version of the data. This eliminates duplications and ensures that all stakeholders have the same reliable information.

Automation and efficiency

Furthermore, integrating artificial intelligence into compliance processes opens new perspectives. AI can automate many tasks, reducing human errors. For instance, KYC data analysis can be automated, allowing for quick validation of customer information. Through this automation, the time spent managing sensitive data is significantly reduced. Consequently, teams can focus on more strategic and revenue-generating missions. AI can also identify patterns in data that might go unnoticed by a human, enhancing fraud detection.

Improved collaboration

Moreover, blockchain facilitates collaboration between financial institutions. With a decentralized database, banks can share information securely and transparently. This not only improves compliance but also promotes better collaboration among industry players. Institutions can thus work together to combat money laundering and other illegal activities, sharing relevant information while respecting data confidentiality.

Wecan Comply – Revolutionizing compliance management

At the heart of this transformation, Wecan Group positions itself as a leader in the field of secure data management solutions. With its flagship product, Wecan Comply, the company is already revolutionizing compliance practices for more than 100 financial institutions, including many Swiss private banks.

Data standardization and security

Wecan Comply allows institutions to standardize and secure their data while simplifying compliance management processes. Thanks to blockchain, data is not only protected but also easily accessible, facilitating its management.

Integration of artificial intelligence

One of Wecan Group’s next evolutions is the integration of artificial intelligence into its solutions. This will allow AI to reconcile data from one bank to another, even when KYC forms are different. Additionally, AI will be able to analyze and standardize collected information, making the management of diverse structures more efficient.

An unprecedented transformation

With this combination of blockchain and AI, Wecan Group is set to transform how financial institutions manage compliance. The solutions offered by Wecan Comply provide answers to long-standing issues deemed insurmountable in the field of compliance.

In sum, the alliance of blockchain and artificial intelligence represents a true revolution for the financial sector. Wecan Group, with Wecan Comply, paves the way for more secure, efficient, and standardized compliance management. As institutions seek to navigate a complex landscape, these innovations might just be the key to addressing compliance challenges and ensuring better trust between banks and their clients.