Between challenges and opportunities: deploying latest tech to combat fraud

Friday 17 November 2023 08:10 CET | Editor: Irina Ionescu | Interview

We interviewed Dr. Shlomit Wagman, Chief Regulation and Compliance Officer at Rapyd, about her journey at Rapyd and the company’s take on fighting fraud, financial crime, and terrorism, deploying the latest technologies in the field.

You have recently taken on the role of Global Chief Regulation and Compliance at Rapyd. What inspired you to join their leadership team?

Joining Rapyd is an exciting opportunity to contribute to the continued success of a leading and innovative fintech company. Rapyd's commitment to compliance and its recognition of its strategic importance align perfectly with my professional background and passion for shaping regulatory landscapes. The company's forward-thinking approach to compliance is what drew me in. 
In my role as the Global Chief Regulation and Compliance Officer, I am eager to build upon Rapyd's existing compliance infrastructure and ensure it remains at the forefront of the global regulatory landscape. I see compliance as an integral part of Rapyd's business strategy, and I am enthusiastic about collaborating closely with global regulators. Through this collaboration, with a strong emphasis on integrity, transparency, and consumer protection, I aim to continue enhancing Rapyd's high level of integrity.

What are the key challenges that global fintech companies encounter when combating financial crime and fraud in today's digital age?

Global fintech companies face significant challenges combating financial crime and fraud. While digitised data enhances monitoring capabilities, the intricate fintech ecosystem poses unique hurdles. Fintech companies leverage vast data resources for tracing fraud instances. However, transaction complexities result in incomplete knowledge of the entire ecosystem, emphasising the need for advanced technologies like cluster monitoring and anomaly detection. The global nature of fintech operations adds complexity, requiring a delicate balance in navigating diverse legal and regulatory frameworks across multiple countries. 

Upholding compliance with international standards and local laws while ensuring consistency in fraud prevention measures is crucial. The rapid evolution of financial technology introduces further complexities, with fraudsters continually adapting as well. It is why we must be committed to fostering a secure and compliant environment that evolves faster than the capabilities of these fraudsters.

In your role as Global Chief Regulation and Compliance, how do you ensure that your organisation remains proactive and effective in identifying and mitigating financial crime risks, including those related to terrorism financing?

Ensuring the proactive mitigation of financial crime risks, including terrorism financing, is a top priority for me. Leveraging my extensive experience in financial investigations and typologies, I bring a unique perspective to risk assessment that others may lack. My approach involves meticulously mapping and understanding risks, delving into the intricacies of various industries and transactions. 

Drawing on my background, including serving as the Director-General of Israel Money Laundering and Terrorism Financing Prohibition Authority (IMPA) and leadership at FATF, strengthens Rapyd's compliance framework. The company commits to global compliance and highlights its dedication to expanding its global footprint, while maintaining the highest standards of integrity and compliance. In this role, compliance is non-negotiable. Through collaborative efforts with regulators and a steadfast emphasis on integrity, transparency, and consumer protection, we can uphold and even elevate our high compliance standards at Rapyd.

Given the increasing use of cryptocurrencies in financial transactions, how does Rapyd approach AML compliance within the crypto space, and what steps are taken to address the unique challenges it presents?

Cryptocurrencies are an innovative technology that can be used for legitimate and illegitimate purposes. The international community designed a framework to mitigate some of those risks, via the international organisation that sets the global standards in the field – the Financial Action Task Force (FATF).  

The framework requires all countries to impose the full set of anti-money laundering and terror financing rules on virtual assets – providing monitoring capabilities on the flow of funds. This framework has already proven to be effective, as demonstrated, for example, in the confiscation of millions of dollars’ worth of the terror organisation Hamas’ crypto by Israel. Unfortunately, to date, 75% of the countries have not fully implemented this framework, creating vulnerabilities and regulatory arbitrages.

In my recent testimony* before the US Senate Banking Committee on Combating the Networks of Illicit Finance and Terrorism, I argued that the FATF should urge all countries to promptly adopt all needed measures, promote the implementation of the Travel Rule, and conduct the appropriate supervision on relevant platforms to ensure compliance. The FATF should also publish a ‘grey list’ of jurisdictions that haven't fully adopted and implemented the global framework or conducted appropriate supervision. 

Furthermore, countries like the US should also consider taking specific actions and designations against non-compliant crypto exchange platforms which are often situated in non-compliant countries, who might have broader interests in disrupting the global economy.

Finally, we have been closely tracking Rapyd's captivating journey, encompassing both organic growth and strategic acquisitions. What lies ahead on the horison for Rapyd?

The combination of organic growth and strategic acquisitions, such as Neat in Hong Kong, Valitor and Korta in Iceland, showcases Rapyd's commitment to expanding its global footprint. 

In August 2023 we announced our intention to acquire PayU GPO, marking a significant milestone that positions Rapyd strongly in the emerging markets, and accelerates our trajectory towards an eventual IPO. While the exact timing of the IPO will be influenced by various factors, it underlines our dedication to sustained growth and expansion. 

Looking ahead, the future for Rapyd is exceptionally promising, solidifying our position as an industry leader. Our focus extends beyond the immediate future, with a commitment to funding initiatives for global expansion. Rapyd will continue to innovate, expand our offerings, and fortify our standing as a frontrunner in the dynamic landscape of fintech.

*Note: I recently provided written testimony to the US Senate Committee on Banking, Housing and Urban Affairs.  More information HERE.

About Dr. Shlomit Wagman

Dr. Shlomit Wagman, Chief Regulation and Compliance Officer at Rapyd, served as Director-General of Israel's Money Laundering and Terror Financing Prohibition Authority (IMPA) and Acting Director-General of the Israel Privacy Protection Authority. Dr. Wagman played a pivotal role as Head of the Israeli delegation to the Financial Action Task Force (FATF) and was a Co-Chair of its operational working group. Her leadership resulted in significant national reforms, including regulating cryptocurrencies, and Israel's accession to the FATF as a member country. Her impressive career spans the public and private sectors, academia, and prestigious institutions like Yale Law School. 

About Rapyd

Rapyd lets you build bold. Liberate global commerce with all the tools your business needs to create payment, payout, and fintech experiences everywhere. From Fortune 500s to ambitious business and technology upstarts, our payments network and powerful fintech platform make it easy to pay suppliers and get paid by customers — locally or internationally. With offices worldwide, we know what it takes to make cross-border commerce as easy as being next door. Rapyd simplifies payments so you can focus on building your business.

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Keywords: financial crime, fraud management, fraud detection, online fraud, compliance, regulation, money laundering, AML, cryptocurrency, cryptocurrency exchange, FATF, acquisition, IPO
Categories: Fraud & Financial Crime
Companies: Rapyd
Countries: World
This article is part of category

Fraud & Financial Crime


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