LatAm's financial crime battle generating opportunities for tech solutions

A tighter focus on combating financial crime in Latin America presents a business seam for providers of technological solutions to mine, BNamericas was told.

Financial services players in the region spent an estimated US$5.95bn last year to tackle financial crime, up from US$4.51bn in 2019, according to a report from global risk intelligence company LexisNexis Risk Solutions.

“I think they [the opportunities] are enormous,” Adrián Sánchez, compliance director for Latin America at LexisNexis Risk Solutions, told BNamericas in an interview.

“On one side, there is this need to understand the behavior of clients from a digital perspective [how people interact with the digital world]. Providers of technology play a key role here. There will be many growth opportunities in the area, for example, of technology related to the analysis of biometric data, to analysis of digital behavior, of course with the incorporation of technologies like automated learning and big data,” he added.

Data analysis builds knowledge and intelligence, which can, in turn, be leveraged to help combat financial crime.

This greater outlay on detecting and preventing financial crime is not only linked to local and international regulatory pressure, but also to the rapid march of technology and the growth of financial services ecosystems.

Latin America is generally advancing along the compliance technology highway, but still lags other regions. Within institutions humans, rather than machines, are still king. 

While machines will never fully replace people in the compliance process, they can support the work of human teams, increasing efficiency and productivity, according to Sánchez.

“From my point of view there should always be this good mix,” Sánchez said.

For the report, LexisNexis Risk Solutions surveyed decision-makers from 254 companies across various segments, including banking, insurance and asset management in August-September 2020. The markets covered were Argentina, Brazil, Chile, Colombia and Mexico.

The e-commerce, real estate and legal services/accounting sectors are seen as presenting the highest risk of financial crime. In general, major risks are money laundering and the financing of terrorism. Concern is also growing about criminals using cryptoassets in their activities, the report read. 

LexisNexis Risk Solutions sees the overall risk level increasing.