Neeraj Bansal, the AVP of Fintech & Ecosystem Digital Regtech at OCBC Bank, recently participated as a panelist at the Transform Finance Conference 2024 in Singapore. Here is a summary of our key insights on how regulatory changes and technological advancements are reshaping the landscape of due diligence

The Changing Landscape of Due Diligence 

Due diligence has significantly transformed due to increasing regulatory scrutiny and technological advancements. Institutions now face stricter compliance requirements and a complex web of international laws as cross-border transactions become more common. Environmental, Social, and Governance (ESG) factors are now integral to due diligence, driven by investor demand and regulatory expectations for transparency and ethical business practices.

Digitalization's Impact on Due Diligence

Digitalization initiatives like SingPass in Singapore, Aadhaar in India, and MyDigital ID in Malaysia have streamlined remote onboarding. These systems, combined with biometric and document checks, enable straight-through processing, allowing institutions to complete onboarding within minutes. However, AI-driven fraud, such as deepfakes, poses significant risks, necessitating regular system calibration and continuous improvement to ensure security and compliance.

Managing Remote Onboarding Risks

Balancing thorough due diligence with a seamless customer experience is crucial. Organizations can achieve this by:

• Automating and integrating ID verification.
• Leveraging centralized ID systems.
• Adopting a risk-based approach.
• Enhancing digital platform user experience.
• Incorporating continuous monitoring and real-time analytics.
• Seeking regular customer feedback to refine processes.

Future Trends in Due Diligence

The future of due diligence and onboarding will be shaped by key trends and innovations. Organizations should focus on the Customer-Centric ADMiT approach:

• Customer-Centric Approaches: Prioritize customer experience (CX) while maintaining security with intuitive digital onboarding platforms.
• AI Technology: Use AI for both fraud detection and operational excellence, assisting onboarding officers in KYC processes.
• Digital Identity Solutions: Collaborate with multiple organizations for efficient identity sharing and verification.
• Advanced Biometrics: Move beyond traditional biometrics to include behavioral biometrics, balancing security with customer experience.
• Transparency and Communication: Inform customers about security measures to foster trust and transparency.

The convergence of regulation and technology presents new opportunities for regtech specialists. Staying at the forefront of innovation and compliance is essential for robust risk management and capitalizing on emerging opportunities.

Stay tuned for more updates and insights from our journey at the forefront of due diligence and onboarding innovation. Visit transformfinance.media today!