Addressing AML Compliance at Digital Banks in SE Asia with Tookitaki

The financial industry in Southeast Asia is undergoing a transformative period, with digital banking playing a significant role in driving economic growth in the region. With over 675 million people and 71 million micro, small and medium-sized enterprises, Southeast Asia is a breeding ground for digital-first business models. The ASEAN-6 countries of Singapore, Malaysia, Vietnam, Thailand, Indonesia and the Philippines are leading the way in digital financial services, with many new digital banks being granted licenses in recent years. With its strong internet userbase at over 460 million, while a great majority of them remain unbanked, Southeast Asia expects a digital banking boom in the coming years.  

However, as the digital banking landscape continues to evolve, digital banks in the region face increasing risks of non-compliance with Anti-Money Laundering (AML) regulations. In this blog, we will discuss how Tookitaki's platform can help digital banks in Southeast Asia mitigate AML compliance risks and stay compliant in today's ever-changing environment.

AML Compliance Challenges for Digital Banks in Southeast Asia

While digital banks in the region have the potential to provide greater access to financial services for the large population of unbanked individuals and micro, small and medium-sized enterprises (MSMEs), they also face unique challenges in terms of AML compliance. One of the key challenges faced by digital banks in Southeast Asia is the lack of a consistent regulatory environment across the region. Each country in Southeast Asia has its own set of AML regulations, which can make it difficult for digital banks to ensure compliance across multiple jurisdictions. Additionally, the regulatory landscape is rapidly evolving, with regulators in some countries issuing new licenses for digital banks and others in the process of developing regulations for the sector. Another challenge is the evolving financial crime landscape where digitally-enabled criminals are likely to abuse the shortcomings in the digital financal system and regulations. 

These challenges can have a significant impact on digital banks' operations and bottom line. The lack of a consistent regulatory environment can increase the complexity and cost of compliance, making it difficult for digital banks to efficiently manage their AML risks. Furthermore, non-compliance can result in hefty fines and reputational damage, which can hurt digital banks' bottom line. Therefore, it is crucial for digital banks in Southeast Asia to have a robust and adaptive AML compliance program in place to mitigate these risks and stay competitive in the rapidly evolving digital banking landscape.

How Can Tookitaki Help Digital Banks with AML Compliance?

Tookitaki's Anti-Money Laundering Suite (AMLS) is a comprehensive and end-to-end AML compliance platform designed to assist financial institutions in detecting, preventing and managing financial crimes. The platform is built on a foundation of "collective intelligence," which utilizes the expertise of a network of specialists in various aspects of financial crime to create an exhaustive library of typologies. This enables AMLS to seek out a diverse range of criminal activity, including those unique to the Southeast Asian market.

The platform uses machine learning and big data analytics to provide a comprehensive approach to detecting and preventing financial crime. This allows digital banks to identify suspicious activity more quickly and efficiently, providing them with an extra layer of security. Additionally, Tookitaki's platform allows digital banks to stay ahead of regulatory changes, which is particularly important in the Southeast Asian market where regulatory environments can be complex and dynamic.

The platform comprises of four modules – Transaction Monitoring, Smart Screening, Customer Risk Scoring and Case Manager – that are optimized for Intelligent Alert Detection (IAD) and Smart Alert Management (SAM). The Transaction Monitoring module helps financial institutions to identify and monitor suspicious transactions in real-time, while the Smart Screening module uses advanced algorithms to automatically screen customers and transactions for potential risks. The Customer Risk Scoring module assigns a risk score to each customer based on their transaction history and other factors, while the Case Manager module allows financial institutions to manage and investigate suspicious activity in a more efficient manner.

By utilizing Tookitaki's platform, digital banks in Southeast Asia can achieve holistic risk coverage across their entire AML program. The platform's community-based approach allows for the sharing and analysis of information and intelligence among a group of organizations, allowing for the identification of patterns and trends in financial crime that may not be visible to individual institutions. This helps digital banks to stay compliant and prevent financial crime, while also maximizing operational efficiency and protecting their bottom line. With Tookitaki's platform, digital banks in Southeast Asia can ensure that they are equipped to handle the unique challenges of the region and stay ahead of the curve in the constantly evolving financial industry.

How Does Community Insights Help Digital Banks?

One example of a typology (created by our community of experts) relevant to digital banks is "money mule" fraud. This type of financial crime involves criminals recruiting individuals, often through job or romance scams, to receive and transfer illegal funds on their behalf. The money is typically transferred through digital banking platforms and can be used to fund a variety of illegal activities, such as drug trafficking or terrorism. Tookitaki's community-based approach helped our digital banking customers to detect this type of fraud by sharing the redflags and intelligence related to money mule activity. By identifying patterns and trends in this type of criminal activity, digital banks can better detect and prevent instances of money mule fraud, thereby protecting themselves and their customers from financial crime risks.

We Can Help You Too!

By utilizing the collective knowledge and experience of this community, Tookitaki has been able to provide digital banks in Southeast Asia with a more comprehensive view of the financial crime risks present in the region. As the digital banking landscape in Southeast Asia continues to grow, it is essential that digital banks stay ahead of the curve when it comes to AML compliance. Tookitaki's platform can help them do just that, by providing them with the tools and insights they need to detect and prevent financial crime, and protect themselves from the risks of hefty fines and reputational damage.

If you're a digital bank operating in Southeast Asia and are looking for a comprehensive solution to mitigate AML compliance risks, we invite you to request a demo of Tookitaki's platform. With our cutting-edge technology and community-based approach, we can help you stay ahead of the curve and protect your bank from the risks of financial crime.