Open banking, open risk. Managing financial crime in a disrupted world

Migration of physical CCIs due latest 28 November, 2016

Open banking, open risk. Managing financial crime in a disrupted world The financial services industry is changing faster than at any time in the last half century. New technologies, new entrants to the industry, new regulations and changing consumer preferences are combining to disrupt and fragment what was until recently an industry dominated by the major banks.

Traditional retail banks face stiff competition from new market entrants, including challenger banks and technology‑based financial service providers (‘FinTechs’), that are often more agile and less constrained by costly legacy systems than their conventional competitors. At the same time, regulatory changes are creating a new “Open Banking” environment, that has the potential to diminish ownership of the customer relationship by larger retail banks.

Our analysis and research, combined with the views of our clients, indicate that these changes will have a profound effect on financial crime risk management at both an institutional and market‑wide level. New financial crime risks will need to be mitigated to combat money laundering, terrorist financing and fraud. Furthermore, we consider that existing approaches to financial crime risk management may become less effective at identifying and mitigating these risks, and that the roles and responsibilities of those involved in financial crime risk management will need to rebalance to reflect the shifts in the industry.

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