Digital payments represent exciting potential for the evolution of financial services for individuals and businesses globally. Over the past 15 years, we have seen the emergence of prepaid cards, mobile banking, mobile payments, internet-based payment services, and virtual currencies and blockchain, all of which represent great potential to transform financial services as we know them today. If financial institutions, however, do not properly apply compliance controls, then they can face significant risks. Many companies struggle to strike the right balance between developing new products that leverage emerging technology. Many companies also experience difficulties adapting to constant, rapid change, while managing risk and applying compliance requirements and regulatory expectations that were not specifically designed for digital payments or emerging products. Additionally, in today’s world, many digital payments and emerging products require complex infrastructures that involve multiple parties, including third parties, to complete the payments.
For that reason, it is important to follow some key best practices for managing the unique compliance risks in today’s digital world. The last thing you want is fraud, money laundering, or terrorist financing to drag down a great product. These issues can significantly affect the viability of the product, and can lead to potential civil or criminal implications for those involved in offering the product.