It is hard to imagine a time without AML/BSA legislation because of how prevalent they are and how important it is to comply with them, but the first AML/BSA laws were passed in 1986. That means that AML/BSA is only three decades old. The laws haven’t held stagnant over these years – they have evolved along with changing culture, geopolitics, as well as the technology available for compliance and regulation.

The increasing complexity of compliance management

Compliance regulations and laws have increased in complexity and we can only expect them to get even more intricate as time passes. There is a very simple reason for this increasing complexity – laws and regulations are always being updated to reflect reality and to undo the problems created by the previous changes. The financial sector is complicated, and one can never predict the exact action of a new regulation. That is why adjustments are often required. Also, as we get more experienced in the financial sector, we discover newer and better ways to accomplish our corporate goals, which also results in a change in the regulatory framework.

Another important factor in the increasing complexity is the exponential rise in the speed of banking transactions. It is easy to forget that just a few decades ago most banking processes were manually handled, and customers had to wait days for processes and transactions to complete. We now live in an era where everything is instantaneous, and customers do not understand waiting periods. Compliance management was simpler when everything was handled manually and had oversight. Now that so many processes are automated, there is also the risk of a cascade. If a problem is undetected, it may live within the system free from human oversight and cause a lot of damage.

The increasing complexity of geopolitics

A lot of what we see happening in the world of compliance management was expected. The industry knew that there will be an increase in regulations and automation both. There was an expectation of things getting more organized, but entropy is inevitable, as the precarious geopolitical situation has shows industry experts. We live in interesting times with changes happening all around us. There are many geopolitical stances and positions which we have never been through before, and the industry is now sure how to cope with everything.

The sanctions on Iran are a great example of how complicated compliance management is now. There have been sanctions on Iran before and sanctions of many other countries, but those sanctions were also accepted by the rest of the world, which made enforcement easy. Things are different this time – most other countries are continuing the existing agreements with Iran and not accepting the sanctions posed by the government.


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The problem is that this means that most of America’s trading partners will still be trading with Iran, while Iran’s army is now designated as a terrorist group by the government. Compliance managers are will have to create a complex regulatory framework which allows their banks and financial institutions to be a part of the same banking network as Iran, while at the same time ensuring that no transaction that goes through the USA or any subsidiary that operates within USA has anything to do with Iran.

Technology is the answer

While all this is worrying for compliance managers across the world, compliance management technology has emerged as a necessary augmentation that is helping compliance departments rise to the occasion. Compliance technology is now a common sight at larger enterprises and quickly becoming the norm in smaller organizations as well.

Wondering how compliance management technology can help your business perform better? Have a look at our American Bankers Association endorsed Predict360 Compliance Management system. Get in touch with our team for a demonstration as well as a trial