In this interview with TechEconomy, Chrisol de Assis Correia, Head of Financial Crime Risk Management, FACCTUM, speaks on the cutting-edge applications that harness the power of parallel processing technology, giving Nigerian financial institutions new choices to modernise financial crime detection. Excerpt: 

What innovations are you brining to Nigeria?

We are launching some new technology for the Nigerian market. There is some particular pressure on the Nigerian financial crime compliance community at the moment. What that means is that for many Nigerian institutions to do business internationally, all of a sudden, they are perceived to be a higher risk because of the national status. It means they have to demonstrate effective compliance a lot more quickly to a lot more detail and to a much greater audience than they had done in the past. 

So, what we wanted to do was to introduce some of the new technologies we’ve developed to help banks and emerging markets manage these types of problems. We think it’s relevant to the problem, but it’s also very sustainable in terms of affordability.

So, we are a cloud first organisation and no installed software and infrastructure and all the IT costs that go with it. But also, we believe in empowering customers with a low code or no code type of product approach, which means they configure products themselves or their own risk profiles.

They don’t have to give us more money for professional services or put out a call to internal it with tools. It’s designed for businesses to manage themselves. You know a lot of fintech companies are coming up, and then they face risks.

Innovation in payments is really welcomed. It provides customers with more choice. It reduces friction. So, we’re all used to paying things immediately now. And every time we do that, the costs come down. So, that innovation is here.

The challenge for fintech is that they don’t have the bricks and mortar experience of compliance. They don’t necessarily have a lot of the already built compliance expertise teams that they need to do that. And that’s led to some gaps.

In some places, most fintechs take a very prudent approach. They have trained staff and have consistent and constant dialogue with regulators, which is all great. From our perspective, though, there’s a tendency for fintechs because they have fintechs.

To build, rather than to buy specialised solutions for it. Now, it’s possible to build but it’s not really a core competency. So, if I were a FinTech, I’d be looking at what my business can do. To improve customer experience at no cost to the company off chain wouldn’t really want to be focused on developing internal controls for I see that as a specialised vendor.

What advice do you have for banks on substance compliance and considering the high risk?

It is not ready for me to advise banks, they’re the experts and the banks in Nigeria have invested continuously in people and training and process and technology. I think the one thing that stands out though, is the pace of change is increasing so quickly. It could be competition from fintechs.

It could be new payment mechanisms that are quicker and cheaper for customers. It could be corporate banking services that are more accessible for micro size fits; all these types of things, all really positive financial inclusion, etc., to address those opportunities and risks.

It’s becoming more and more important that compliance systems have the capacity to address them. So, my personal view is that over the last few years, compliance systems have been squeezed really hard. And there isn’t a lot of juice left in them. And they’re running out of capacity.

They’re not as quick as perhaps they shouldn’t be as flexible. They’re hard to manipulate for really Agile Compliance, which should, which is what customers expect, right?

If you’re sending money from A to B, you’ve expected from A to B in microseconds. And if there’s a delay for compliance reasons, you’re just going down to the next guy to do it, right. It’s those problems of friction which are created when processes can’t respond as nimbly or as quickly because the technology is old. So that’s my biggest takeaway, I think for any back anywhere.

Following FACCTUM’s study of the financial sector, what are the trends and the solutions you offer?

There are three sorts of technology trends. One is cloud adoption. I think a lot of institutions have at least a cloud first strategy. Although, in reality it might take them a little longer than they would like to move away from on-premises, but it’s happening. It’s getting more intense every year. In my field of work, the ongoing trend is for me to move towards a true real-time environment.

So, when I started my career, it was a batch type operations mode, where you did your compliance stuff at a set time every day. The world isn’t like that anymore, right? People like bank customers expect things to be different.

Regulators expect it to be a lot more quickly. So, real time is always continuous. That’s a real mode environment now, and the risks that compliance needs to aim to address terrorism financing, money laundering.

Those folks don’t do any sort of scheduled work there. They are fluid, super fluid, super nimble. And banks need to respond to that by setting up the second one.

The third one, I think, is the convergence between fraud, risk and money laundering and sanctions risk and terrorism financing.  Very often to fight for the same coin. For legal and operational reasons. It’s often quite separate within organisations, but the silos I see coming together more and more now. And technology isn’t enabled for them to happen.

How seamless is it with integration? Do businesses have to discard their present solutions in order to deploy FACCTUM’s?

Our aim is to provide complementary technology. If a customer wants to rip and replace great things, they can do that. However, we think we’ve grown up enough to know that that’s not going to happen all the time. customers need to realise investments on the incumbent’s infrastructure, and that’s going to take some time. Operation is a big change management project.

Anyway, we’ve chosen clouds because it enables us to provide solutions that can stand up in a couple of days, public or private cloud. And we use open API’s as well. So, an open standard means their own people can work out implementation, they can connect it to the screen system or any number of screens systems or their case management. They call banks, etc., It’s all on open API’s. We don’t really want to provide that sort of proprietary blackbox approach.

How cost effective are your solutions, especially to accommodate the small businesses, maybe fintech startups?

Yeah, thank you so much. Strategically, we’re focused on servicing large institutions. So, every institution has that ambition, right? However, we’ve also made a big effort to address the needs of smaller institutions that have a sort of long, regulated tail. So, money service businesses, virtual asset services, FinTech, foreign exchange houses, brokers, insurance agents, tax advisory, lawyers, notaries, all those types of things. Many; 1000s of them, not particularly big, if you add them all up, we thought that market had been relatively underserved.

So, what we did is we took our enterprise grade software that was pointing towards a large bank, and we’ve made that accessible through clouds to smaller institutions. It’s not a lighter version. A big tier one bank has the same technology as your foreign exchange house around the corner with two guys. The difference is in terms of the functionality; so, we’ve simplified it for the needs of some smaller business and delivered it via the cloud. This is one of the huge advantages of cloud from our perspective, we can serve a great variety of customers in a sustainable way using the scalability of cloud.

Zero code or no code solution, the after sales support is also one of the key issues you have. We’ve just opened our Africa office in Johannesburg that’s going to grow over the course of time. Longer term, we’d love to have a more of a local presence here.

The hosting is provided by some of the big brands you might expect which gives us benefits in terms of information security, resilience, general uptime and usability and all those types of things as well.  

Application Support is where we come in. We’ve tried to make our products really tightly contained. So, coming to the cloud, you can’t really mess it up very easily. So, things are locked down for the smaller customers that a big customer will need and that way reduces support costs. Also put a focus on interface design, so it matches a client’s workflow. Therefore, intuitively, a customer should be able to navigate. But ultimately, great customer support is something we provide.

FACCTUM has introduced its next-generation anti-financial crime solutions to the Nigerian market.

The risktech company unveiled the cutting-edge applications to stakeholders in the financial sector during a breakfast meeting on Wednesday, May 31, 2023 in Lagos.

The solutions, FACCTUM team said, harness the power of parallel processing technology, giving Nigerian financial institutions new choices to modernise financial crime detection.

François Ameguide, the FACCTUM Director of Business Development, Africa said that a new approach to financial crime compliance technology id overdue hence FACCTUM team was excited to launch the new FacctList watchlist management solution that will revolutionise the way Nigerian financial institutions manage mission critical sanctions and anti-terrorism financing risk data.

He told participants at the meeting that effective financial crime compliance (FCC) technology is critical for regulatory compliance adding that it should also be a business enabler that greenlights opportunities.

“It will enable a rapid response to high velocity changes in regulatory obligations, as well as providing new levels of transparency in risk decisioning. This approach provides Nigerian firms with a new approach to demonstrate the strength of compliance controls, both to regulators and international partners,” Ameguide said.

As the Nigerian financial service industry adjusts to a new risk environment, following the recent grey-listing of the country by the Financial Action Task Force (FATF), the FACCTUM initiative offers highly performant technology that is also affordable and sustainable.

To better service customers in Africa, FACCTUM opened its first office in the region earlier this year, in Johannesburg.

FACCTUM now plans continued expansion in Africa by placing a strategic focus on serving Nigerian financial institutions and regtechs.

Speaking on its Africa growth initiative, Nicolas Willard, the FACCTUM Director of Business Development – EMEA, said, “we are delighted to bring anti-financial crime solutions much closer to the Nigerian financial and fintech industry. Nigerian institutions are growing quickly and modern risk management technology plays a critical role in ensuring that new opportunities are both safe and sustainable.”

Also speaking, Chrisol de Assis Correia, Head of Financial Crime Risk Management at FACCTUM, reminded industry players that existing compliance tools haven’t kept pace with the increasing complexity and operational load of new risks.

According to him, “The year-on-year impact is a significant tech debt combined with exponential costs”.

FACCTUM offers a combination of cloud and state-of-the-art parallel processing technology which delivers financial crime compliance solutions to regulated industries.

The focus on cloud technology results in solutions that can be delivered very economically, whilst also ensuring high levels of security and performance.

This approach makes FACCTUM solutions very relevant to the risk profile and compliance objectives of African financial institutions.