Arab Press

بالشعب و للشعب
Wednesday, Oct 01, 2025

Why technology is key

Why technology is key

Enhanced due diligence, including Know Your Customer (KYC), when completing complex acquisitions of businesses or assets is not only a basic expectation under current Anti-Money Laundering (AML) regulations, but also makes commercial sense for all parties involved.

Minimising your exposure to financial risk through KYC

Performing KYC checks when completing acquisitions is crucial both from a regulatory standpoint, to avoid sanctions, fines or reputational damage and from a risk standpoint to avoid financial losses. Recent high-profile cases, such as the merger between JP Morgan Chase and Washington Mutual where subsequent regulatory issues came to light, have illustrated the consequences of not carrying out adequate due diligence, including KYC checks, before completing company acquisitions. 


Regulatory crackdown on KYC/AML breaches

Regulators have cracked down heavily on AML breaches in the past few years – recent research suggests that 2019 will be a record year for AML fines, with USD7.7 billion’s worth handed out to financial services firms globally in Q1 2019. To complicate matters further, the Fifth Anti-Money Laundering Directive (5AMLD) is due to come into force in January 2020. 5AMLD features a new ‘blacklist’ of high-risk countries, a call for enhanced due diligence and the necessity to verify beneficial ownership among other changes. Post-Brexit, AML law could be even more complex in the UK, as the FCA have stated that Brexit may present an opportunity for the UK to rethink its laws, which might mean some fast-paced changes in the regulatory sphere.

RegTech, like Lawson Conner’s Max Comply, can handle regulatory nuances across different jurisdictions, updating new directives regularly, which is essential as part of the ongoing compliance requirements of an acquisition.


Essential components of KYC checks

M&A activity has an overall success rate of only 50 per cent. Reasons for failure often include unidentified risks within the target, which could be identified earlier in the process with effective and systematic KYC checks.

Regulators across jurisdictions have tightened up regulatory requirements around mergers and acquisitions, with the implementation of directives such as the Dodd-Frank Act demanding more detailed financial statement information from target companies.

Carrying out such a high level of due diligence can be a time-consuming and onerous task, traditionally weighed down by manual processes. It can also be costly, with some major financial institutions spending up to USD500 million annually on KYC and due diligence, according to recent research from Thomson Reuters.


How technology can transform the process

Robotic process automation (RPA) is the simplest way to automate some of the manual tasks and make KYC and due diligence faster and more cost-effective. Through RPA, rule-based functions are executed, based on data from internal and external sources and the results are directly inserted into workflows. RPA and AI have started to revolutionise the financial services industry – recent research from Deloitte, for example, reveals that 64 per cent of organisations have started to use RPA but its value is not always recognised in acquisitions.

The due diligence process can also be transformed by transactional analytics, by combining and manipulating data and rapidly examining financial and operational metrics. A recent survey from Raconteur of UK-based dealmakers found that 50 per cent desired closing twice as many deals a year as they did, and that due diligence was a key factor in transaction delays.

At Lawson Conner (part of the IQ-EQ group), we have developed our own regulatory compliance platform, Max Comply, which incorporates RPA, AI and analytics. The award-winning software platform has been proven to reduce cost and processing time significantly and can make a dramatic difference to the speed and efficiency with which acquisitions are successfully completed.

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
Nvidia and Abu Dhabi’s TII Launch First AI-&-Robotics Lab in the Middle East
UK, Canada, and Australia Officially Recognise Palestine in Historic Shift
Dubai Property Boom Shows Strain as Flippers Get Buyer’s Remorse
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
UAE-US Stargate Project Poised to Make Abu Dhabi a Global AI Powerhouse
Saudi Arabia cracks down on music ‘lounges’ after conservative backlash
Saudi Arabia Signs ‘Strategic Mutual Defence’ Pact with Pakistan, Marking First Arab State to Gain Indirect Access to Nuclear Strike Capabilities in the Region
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
Kuwait opens bidding for construction of three cities to ease housing crunch.
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
Could AI Nursing Robots Help Healthcare Staffing Shortages?
Turkish authorities seize leading broadcaster amid fraud and tax investigation
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Big Oil Slashes Jobs and Investments Amid Prolonged Low Crude Prices
Social Media Access Curtailed in Turkey After CHP Calls for Rallies Following Police Blockade of Istanbul Headquarters
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Trump Administration Advances Plans to Rebrand Pentagon as Department of War Instead of the Fake Term Department of Defense
Tether Expands into Gold Sector with Profit-Driven Diversification
Trump’s New War – and the ‘Drug Tyrant’ Fearing Invasion: ‘1,200 Missiles Aimed at Us’
At the Parade in China: Laser Weapons, 'Eagle Strike,' and a Missile Capable of 'Striking Anywhere in the World'
Information Warfare in the Age of AI: How Language Models Become Targets and Tools
Israeli Airstrike in Yemen Kills Houthi Prime Minister
After the Shock of Defeat, Iranians Yearn for Change
YouTube Altered Content by Artificial Intelligence – Without Permission
Iran Faces Escalating Water Crisis as Protests Spread
More Than Half a Million Evacuated as Typhoon Kajiki Heads for Vietnam
HSBC Switzerland Ends Relationships with Over 1,000 Clients from Saudi Arabia, Lebanon, Qatar, and Egypt
Sharia Law Made Legally Binding in Austria Despite Warnings Over 'Incompatible' Values
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Trump Backs Putin’s Land-for-Peace Proposal Amid Kyiv’s Rejection
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
Iranian Protection Offers Chinese Vehicle Shipments a Cost Advantage over Japanese and Korean Makers
United States Sells Luxury Yacht Amadea, Valued at Approximately $325 Million, in First Sale of a Seized Russian Yacht Since the Invasion of Ukraine
Saudi Arabia accelerates renewables to curb domestic oil use
Cristiano Ronaldo and Georgina Rodríguez announce engagement
Asia-Pacific dominates world’s busiest flight routes, with South Korea’s Jeju–Seoul corridor leading global rankings
Private Welsh island with 19th-century fort listed for sale at over £3 million
Sam Altman challenges Elon Musk with plans for Neuralink rival
×