Third-Party Data Integration

Financial institutions (FIs) must work with a lot of data to comply with regulatory obligations. In addition to having up-to-date records of regulations and regulatory lists (such as sanctions lists), they need accurate information on the identities of individual customers (for KYC), businesses and their owners (for KYB), and employees (for KYE).

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All of this information is difficult for FIs to acquire and manage on their own while still running the rest of their operations. That’s why many are now using third-party integration tools to pull the data they need, when they need it, from external sources. So what is a third-party integration, and how can it benefit an FI’s regulatory compliance program? This article will explain.

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Third-party integration refers to an organization connecting applications or data from outside parties to its operations. This is usually done if the organization doesn’t want to build the functionality, or find and store the information, on its own. It’s usually accomplished through APIs.

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Financial institutions face many compliance requirements to prevent misconduct from individual customers, business clients (and their beneficial owners), employees, and outside criminals. Doing so requires massive amounts of data on people, companies, jurisdictions, activities, and regulations. And with all that information, different pieces of it are bound to change over time.

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Handling such volumes of information that can become outdated in such short time spans is difficult, if not impossible, for FIs to do on their own. After all, they have all their other operations to take care of. That’s why they’re increasingly turning to third-party API integrations—to bring in the data from external organizations that specialize in curating the information and keeping it current.

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Third-party integrations can offer many advantages when it comes to sourcing the data necessary for an FI to run an effective regulatory compliance program. These include:

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• Lower costs: Aggregating data from organizations that are built around collecting, organizing, and updating it saves the time and money an FI would have had to spend researching and cleaning the data itself.
• Faster update deployment: Borrowing data on changes to financial regulations, identity information, and risk-related information (such as sanctions or PEP lists) from an organization already working to ensure it’s up-to-date helps an FI keep its compliance system current and avoid non-compliance issues (which can sometimes include hefty fines and penalties).
• Wider pool of data types: Third-party data integration allows an FI access to more sets of relevant data than it would have been able to access if it tried to independently source data, due to time and money constraints.‍
• Less required maintenance: Since data integration with third-party systems simply calls the data from the third party through an API, an FI doesn’t have to invest in as much infrastructure or personnel to store the data itself and work to update the information when necessary.

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How Unit21 Enables Data Aggregation and Integration for Better Results

Unit21’s Transaction Monitoring solution doesn’t just look at the details of financial deals themselves. It’s a data monitoring tool that aggregates information from multiple sources related to participants’ IP address locations, device/browser fingerprints, typical financial behavior, other online activity, and transaction velocity. These contextual signals allow investigators to assess whether a particular transaction is suspicious or not more accurately.

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To see it in action, contact us for a demo.

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