Adaptive compliance refers to a proactive and flexible approach to regulatory compliance. Unlike traditional static compliance methods, adaptive compliance involves continuously adjusting compliance practices to keep pace with regulations and industry standards changes.
This allows organisations to:
Optimise Efficiency: Focus resources on high-risk scenarios while streamlining verification processes for low-risk cases.
Enhance User Experience: Create a more user-friendly verification process by avoiding unnecessary friction for low-risk interactions.
Maintain Compliance: Proactively adapt to regulatory changes to ensure continuous compliance.
How Does Adaptive Compliance Work?
Adaptive compliance typically involves these steps:
Risk Assessment: The organisation establishes a system for continuously assessing customer risk based on various factors like transaction history, geographic location, and product/service type.
Regulation Monitoring: A dedicated team or service stays informed about updates to relevant regulations and industry standards.
Compliance Rulebook Update: Compliance rules and procedures are adjusted to reflect risk assessment and regulation changes.
Dynamic Verification Flows: Verification processes are tailored to the assessed risk level. High-risk scenarios require multi-factor authentication, while low-risk interactions involve simplified verification methods.
Benefits of Adaptive Compliance
Improved Efficiency: By focusing resources on high-risk situations, adaptive compliance allows for a more efficient allocation of compliance efforts.
Enhanced Customer Experience: Streamlined verification processes for low-risk interactions lead to a smoother user experience.
Reduced Costs: Adaptive compliance can help optimize compliance costs by avoiding unnecessary procedures for low-risk scenarios.
Proactive Risk Management: Continually assessing and adjusting compliance practices help organizations stay ahead of regulatory changes and emerging threats.
Smile ID’s Approach to Adaptive Compliance
Smile ID’s AML check implements risk-based verification flows, and ongoing verification which simply means you can screen your users against sanctions, PEP and adverse media watchlists even after their initial onboarding.
Smile ID offers comprehensive AML checks to help businesses achieve compliance in Africa. Our solution empowers businesses to screen users across 1,100+ global and African sanctions, PEP, and adverse media watchlists. Businesses can easily integrate our technology into their existing workflows via APIs. Book a free demo to see how it works.
Conclusion
Adaptive compliance is a forward-thinking approach that allows organisations to navigate the complexities of regulatory compliance in a dynamic environment. By adopting adaptive compliance strategies and leveraging solutions like SmileID, organisations can achieve a balance between robust security, user experience, and efficient compliance management.
