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Industry trends: data sharing and open communication at financial institutions

With the EU’s Anti-Money Laundering Authority (AMLA) now launching operations, forward-thinking financial institutions are already ahead, especially when it comes to data sharing and open communication. But how exactly are they using technology to streamline compliance?

Data sharing in financial services

AMLA gains momentum: Europe’s anti-money laundering approach takes shape

As part of its ongoing fight against money laundering and terrorist financing, the European Commission is reinforcing its Anti-Money Laundering Authority (AMLA) initiative. Following the decision in February 2024, AMLA has now been established in Frankfurt and will begin operations in the summer of 2025, starting with consultations on the first implementation rules. The broader ambition of the European Commission is clear: to reduce administrative burdens for businesses and modernize supervision through more efficient and better-coordinated data collection.

Although AMLA will not be fully operational as a supervisory authority with direct oversight of selected institutions until 2028, it is already making its presence felt. Backed by data-driven Financial Intelligence Units, AMLA will closely monitor compliance with anti-money laundering regulations across the financial sector. Combined with increasing regulation and stricter oversight by national authorities, financial institutions throughout Europe must prepare for significant changes.

Anticipating regulatory changes

In response to the introduction of the AMLA, compliance officers are increasingly prioritising the sharing of information across banks and brokers. This makes it easier to spot relevant trends (such as new types of fraud), helping the sector move forward as a whole. Historically, discussing these types of issues between competitors used to be frowned upon, but things are changing. This is primarily due to the changing role of compliance teams within organisations. Where compliance was once viewed as a hindrance to other business departments, it is now recognised as the vital component that it is, actively preventing issues and streamlining day-to-day operations to foster future growth opportunities at other departments.

Organisations are recognising that constructing an effective AML requires collaboration with solution providers who share the same mindset. This ties in neatly with the key concerns that we highlighted in a previous blog post on AML Forum Madrid.

Building a customer-centric approach

In addition to the regulatory compliance aspect, information and file sharing helps financial players to better serve end clients. Forward-thinking institutions prioritise improving their customer experience through personalised services, while keeping workflows as frictionless and seamless as possible. AML compliance with end clients in mind not only attracts and retains clients, but also builds trust. Open communication and data sharing with existing partners and tools helps financial services to gain deeper insights into customer preferences, in turn enabling them to develop tailored financial products and services more effectively.

Turning new legislation into opportunities for data sharing at financial services

Understanding that proactive data sharing can move your business forward is key. Compliance frameworks must not only be reviewed in light of current regulations, but also in relation to future developments on the horizon. Consider the retail banking sector, for example, where banks throughout Europe embraced the opportunity presented by the PSD2 open banking regulation, in a bid to create new everything apps that used compulsory data sharing from third-party financial service providers to transcend traditional banking services.

Open communication and data sharing with Harmoney

How do we tap into the need for data sharing at Harmoney? A few key benefits of our compliance orchestration platform:

1. Client-centric by design

Every single aspect about Harmoney is fully client-centric by design. Typical tools and platforms for financial institutions either start from a process-centric or organisation-centric approach. While the latter two set-ups might help financial players for a predefined purpose, they are inherently flawed and more difficult to scale. A client-centric approach that truly puts end customers at the heart of every interaction helps organisations to deliver added value.

2. Reuse of data across different business departments

Our client-focused strategy enables financial institutions to reuse existing data in new customer flows and processes across different business units. For instance, an end client’s financial passport or profile, containing their personal preferences and characteristics, can be repurposed in new compliance procedures to identify cross-selling and upselling opportunities in other departments.

3. Data enrichment and data validation opportunities

On the Harmoney platform, existing customer profiles can be enhanced with additional data from various sources in the IT ecosystem, such as external databases (e.g. ID validation or blacklist screening providers). This allows financial players to create tailored compliance processes that meet both internal and external reporting requirements, including those outlined in the wider ESG framework.

Harmoney offers a cutting-edge digital platform that streamlines intricate onboarding and compliance procedures, featuring automated screening functionalities. Interested in discovering more about our innovative solution? Reach out to us for further details!