The benefits of using SaaS in financial crime prevention

05.22.2024 | Henry Fosdike
How using SaaS in financial crime prevention improves security, processes, and efficiency

In recent years, there has been an increase in the use of software-as-a-service (SaaS) applications across all industries. Whereas previously, companies would buy licenses to use a program (sometimes in perpetuity) to access so-called legacy software, it has now become commonplace for companies to pay in the form of a subscription model.

SaaS adoption within the banking, financial, and insurance services is expected to grow to more than $130 billion in 2027. This is up from $54 billion in 2022. Within financial crime prevention, spend on cloud solutions is expected to grow steadily to 32% of deployment spending. Why is this the case and what are the benefits? To understand more, let’s investigate why so many financial institutions are embracing the benefits of SaaS for anti-financial crime.

What is the role of SaaS in financial crime prevention?

SaaS uses a subscription model, thus minimizing upfront costs. It is a modern, flexible approach to software; users access software – and their data – via the cloud, can purchase seat licenses dependent on needs (for example, if a business is scaling quickly), and enjoy continuous upgrades throughout the product’s lifecycle. Most importantly, SaaS software and company data is accessible from anywhere. All that is required is an Internet connection.

SaaS software is often available off-the-shelf, designed to integrate with other popular tools and products. The modern approach ensures that it is user-friendly with a great user experience (UX). SaaS is agile – constant and consistent updates can be deployed by a provider on an ongoing basis, meaning that staying up to date with changing regulations and other requirements is easier on the customer side. Additionally, new developments such as generative AI can reach users faster.

What is legacy software in anti-financial crime?

Legacy software is on-premises software that has been used for years in anti-financial crime. There is a good chance that it has been specially designed for the bank or financial institution using it. Data and all backups are held on the premises with servers on-site, eschewing any apparent need for the cloud, but almost certainly requiring direct access.

Legacy software will also use a traditional approach to fighting financial crime; for example, strictly rule-based processes. Though organizations may enjoy software designed for their unique requirements, this makes legacy software inflexible and slow to adapt to changing regulations or movements within the industry. This can cause problems as financial crime regulators expect organizations to be able to adapt to modern threats as they arise. Also, banks remain at risk with ever more spiraling costs in maintaining their systems as technology moves on and programmers become more difficult to hire (see the continuing widespread challenges facing banks with requirements as an example).

The benefits of using SaaS in anti-financial crime

Already it may be clear that using SaaS in financial crime prevention offers some distinct advantages over older, traditional software. Even so, it can help to go into a bit more detail to understand exactly why this is the case:

SaaS supports advanced data security and privacy

In financial crime prevention, privacy and security of data is paramount. This is an area where SaaS can be a clear improvement over traditional legacy software. By having services accessed off-premises, with backups around the world, and security provided by the likes of Microsoft, Amazon, or Google, company data is much more secure. This is because these large companies have much more robust security systems and larger dedicated teams, which allows for a far greater capability in preventing external bad actors from accessing their servers. After all, a breach wouldn’t just affect one company, it could affect millions.

In contrast, legacy software and its data is often housed on servers held on premises, typically leading to more onerous and therefore less frequent updates. With a far smaller team available to focus on security and privacy, it makes sense to outsource this to larger companies, preventing criminals from exploiting any easy loopholes (for example, a disgruntled ex-employee). Using SaaS in financial crime prevention allows team members to enjoy peace of mind and not worry about missing updates. It’s all taken care of for you.

SaaS excels at integrating with existing tools

Using SaaS is meant to be easy, which is why developers of SaaS applications offer many enhancements. This helps to ensure that their SaaS products work with other third-party tools that a company may be using (including legacy products). Because fighting financial crime often requires more than one of these tools for effective prevention, it is vital that everything operates seamlessly, and it’s one of the major benefits of a SaaS ecosystem. This approach also allows financial services organizations to use the latest SaaS technology without completely overhauling their current financial crime detection solutions.

As might be expected, legacy software doesn’t integrate as well as SaaS does with existing tools. This is because in most cases it was designed to work for only one customer and was built before SaaS became commonplace. To continue business as normal, workarounds must be found. Though they may be fine initially, these tweaks can require significant resources to keep them operational and may affect productivity if they break (with more engineers required to solve the problem!)

Use an innovative, cutting-edge solution that keeps up with criminals

Technology advances all the time so relying on traditional, older software makes little sense when criminals will be using the latest methods to commit money laundering or other financial crimes. To catch them, organizations must do likewise with SaaS in anti-financial crime already using generative AI, predictive AI, and machine learning. In SensaAI for Sanctions, for instance, the AI uses unstructured data and provides contextual data that has previously been lacking.

Legacy systems won’t have these abilities and they will require significant upgrades to stay useable into the future. With these coming at a significant cost, it could leave slow-moving financial institutions vulnerable.

Deploy SaaS anywhere at any time for ultimate flexibility

Cloud-based SaaS software in financial crime ensures that organizations can provide workers access to their data and software whenever they need it, wherever they are in the world. This is beneficial for workers on the move, and benefits organizations that employ remote workers; there is no need to come to the office to hook up to a physical server.

Using SaaS in anti-financial crime allows companies to reduce dependency on physical locations and offers huge advantages in terms of accessibility to whomever needs the software, and the speed with which they can access it. It all adds up to a fast, agile workplace that insists on having the finest tools to fight financial crime as quickly and effectively as possible.

SaaS offers enhanced scalability as your organization grows

With legacy financial crime prevention software often made according to a bank’s needs, it doesn’t scale at all well. When scalability is required, it will often take considerable time and resources; SaaS solutions challenge this accepted norm.

The development of SaaS came from a desire for software to be agile and for scalability to be easy, but it wasn’t until ubiquitous, reliable, high-speed internet access with robust remote security made it possible. As a company grows and requires more solutions, SaaS is there to meet demand. Likewise, if business focus changes, these add-ons can be reduced if necessary. SaaS in FinCrime prevention is all about allowing organizations to expand with few difficulties, allowing for seamless integration with existing systems if required.

Using SaaS in anti-financial crime offers much better ROI for businesses

With SaaS operating a subscription model payable monthly or annually, it offers much lower upfront costs than legacy software. Alongside this, SaaS is maintained and upgraded by the developer, meaning far less need for in-house maintenance. These savings all add up to much better return on investment for financial institutions and a better use of internal resources that can focus on critical banking initiatives.

This contrasts with traditional legacy software, where initial costs can far exceed SaaS implementation. Significant upgrades and maintenance to keep the software operational and serviceable (not necessarily industry-leading) also add up to a poorer ROI. Though some might perceive holding on to older software to improve ROI, beware of the sunk cost fallacy

SaaS offers an intuitive, modern user experience

With intuitive and modern UX, organizations using SaaS can capture benefits more quickly with teams taking much less time to understand the software than previously. Moreover, with SaaS offering an improved user-centric approach, training becomes much easier as well.

Technology is getting easier to use and caters to disabilities. This is certainly the case when using SaaS in financial crime prevention but probably isn’t the case with legacy software. This is because older technology often focused on key capabilities with the user experience being secondary.

SaaS platforms manage maintenance themselves

One of the more costly aspects of running legacy software is having to maintain it using in-house IT resources or via expensive services contracts. This not only costs a company money but also takes up valuable resources for an extended period.

This isn’t the case when subscribed to a SaaS solution as the provider offers continuous support. If the provider is a global company, this will often mean support is available around the clock. The result ensures that systems are always being maintained and improved with any bugs being solved as quickly as possible.

Using SaaS in financial crime prevention with SymphonyAI

SymphonyAI is the combination of more than 25 years’ experience tackling financial crime with 10 years of advanced AI research and innovation to create modern, agile anti-financial crime software. Powered by predictive and generative AI technology, SymphonyAI’s product portfolio delivers truly transformational SaaS solutions that empower organizations to lead investigations, improve risk detection and combat financial crime faster and more effectively than ever before.

Trusted by more than a third of the world’s biggest banks, our award-winning finance technology has proven to solve their biggest compliance challenges, delivering powerful capabilities and remarkable efficiencies, and constantly evolving to meet the regulatory needs of today.

To learn more about using SaaS in anti-financial crime, contact SymphonyAI or book a demo.

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