Compliance helps build trust. But it’s getting complicated

As anyone in banking knows, this degree of trust is earned through a long-term commitment to safeguarding client funds, careful investment strategies, risk management and a strong commitment to fighting fraud. With digital transactions taking a growing share of overall economic activity, regulators are placing a wide range of demands on banks to bring regulation into the digital era.

In recent years, we’ve seen the introduction of new regulations governing customer authentication online (Strong Customer Authentication, or SCA), the treatment of cryptocurrency transactions (MiCA) and, most recently, the Digital Operations Resilience Act, or DORA. And the pace of change won’t slow down, with the rise of agent-enabled e-commerce, topic we discuss in a recent report in partnership with Celent, stablecoinenabled payments, and other innovations which promise to change the online acquiring landscape completely over the next 10 years.

Local matters too

Alongside new payment methods and EU regulations, we’ll also find a more diverse payments landscape in the future with more differentiated local regulation, especially in non-EU markets such as Switzerland, Norway, the UK and the Balkans. Think about the Norwegian approach to digital identity, for instance, or Switzerland’s treatment of crypto transactions as another example. In the UK, new regulations have recently been announced that will treat BNPL transactions as a form of personal loan.

While payment gateway solutions have emerged that support standards such as the EU’s SCA requirement under PSD2, the growing complexity of the regulatory landscape means that, looking ahead, gateway solutions are going to have to demonstrate increasing flexibility to cope with both EU and local regulations in areas such as A2A transactions, BNPL and crypto.

How white-label gateways add value

Banks have an opportunity to enhance the trust they offer customers by enhancing their proprietary e-commerce gateways with improved compliance software that updates their systems automatically to reflect evolving national and supra-national regulations.

Doing so will reduce complexity both for the bank itself and its customers, while reducing the time and cost of regulatory compliance for the bank.

It also helps banks deliver on the promise of greater transparency for customers in areas such as Anti-Money Laundering and Know Your Customer (KYC), where corporate clients in particular are frequently surprised by the level of detail required when onboarding.

By tailoring a bank’s own gateway to the specific needs of its customers, local regulators and supra-national regulations, compliance is made more efficient and processes such as onboarding can also become smoother, with lower friction for customers. 

E-commerce gateway: Onboard with ease, succeed with security