How much do you get done on your lunch break?
Some people squeeze in a gym session, others catch up on reading. There’s a lot of things you can do in an hour – but opening a bank account isn’t one.
It’s something we’ve all been through. A bank account is one of our most fundamental assets: without one – access to finances aside – you’ll struggle to rent an apartment, or apply for a job. But the processes for opening a bank account aren’t so straightforward, and it’s to address this pain point that new technologies are now emerging to help. RegTech, or regulatory technology, enables banks and consumers to interact more easily, whilst keeping compliance robust.
And it can’t come soon enough.
Helping banks help people
I recently moved back to the States after 8 years living abroad. With paperwork and unpacking out of the way, getting my banking sorted was next on the list.
It wasn’t quite the homecoming I’d imagined. The whole process – from entering the branch to leaving with an active account – took almost 2 hours. The only requirement of me during that time was to provide my passport for copying.
Despite the best efforts of my relationship manager, it drove home how broken the user experience in banking really is. It’s no surprise that FinTech, with its focus on putting the customer first, is closing ranks on traditional banks who are encumbered by outmoded processes.
RegTech’s next. It automates the compliance requirements that cause friction – going into branch with your passport to prove your identity a prime example. With RegTech, those processes can be performed remotely and (even better) instantly. It’s as simple as taking a picture of your ID and your face.
Banks lose up to 40% of customers due to poor user experience before they’re even onboarded. My bank nearly lost me. With RegTech, they don’t need to.
Keeping firm on fraud
I mentioned that my relationship manager took my passport for copying. I didn’t say he checked it very thoroughly.
In the aftermath of the financial crisis, identity verification and fraud prevention have been subject to increasing regulatory oversight to keep consumers safe. I can’t say my relationship manager showed the same level of scrutiny.
I don’t blame him – he was there to build a relationship with me, among myriad other tasks. But herein lies the problem: human agents aren’t experts at detecting fraud, and can’t catch the sophisticated techniques that are often invisible to the human eye. They have no way of knowing whether a passport is lost, stolen, or blacklisted. Due to unavoidable human error, mistakes are inevitably made.
There’s no such risk with RegTech. Replacing manual processes with technology ensures that banks minimize risks and provide a better service at scale. RegTech gives banks the confidence that their compliance processes are being correctly performed for every customer, protecting them from the financial and reputational risk of fraud.
The rise of RegTech
RegTech is on its way to heal these pain points for financial institutions, regulators and consumers alike.
Regtech automates compliance processes to make them more robust and reliable. And removing the cumbersome manual element makes for a better experience for customers, too – benefits that early adopters in the FinTech space are already beginning to see.
With RegTech, banks could also enjoy these benefits, and focus on getting their relationship managers back to what they do best: building relationships, not ticking boxes.
RegTech’s on the rise, and it’s time for banks to embrace it – if not for their own sakes, then for the sakes of all our lunch breaks.