Feb 26, 2021

Bank of Lithuania introduces regtech solution to boost AML

BankofLithuania
Regtech
GovTech
Lietuvos Bankas
William Girling
2 min
Bank of Lithuania introduces regtech solution to boost AML
Lietuvos Bankas (Bank of Lithuania), together with Columbus Lietuva and Peekdata, has introduced a new regtech solution prototype...

The unnamed prototype will address core issues such as automating reporting procedures, providing new monitoring and analysis opportunities, and boosting AML (anti-money laundering).

Commenting on the new development, Ramūnas Baravykas, Head of RegTech and Advisor to the Director of the Supervision Service at Bank of Lithuania, extolled the solution’s diverse applicability:

“This solution is revolutionary in terms of its efficiency and accuracy. During the testing period, we used reports for anti-money laundering purposes, yet the range of its application is very wide.”

Streamlining data

The automation benefits of the regtech system could be profound: e-money organisations currently generate up to 20 regular reports, while other financial institutions (banks, credit unions, etc) must provide Bank of Lithuania with constant updates for statistical analysis and supervisory oversight - a substantial and cumbersome process.

Employing the new solution would see faster, more accurate results provided in a timely manner. 

Functioning through a specially developed and easily integratable API rooted in open banking, both Columbus Lietuva and Peekdata were primarily responsible for its creation. The solution was then tested in conjunction with ConnectPay, Interpaylink, and Paysolut.

“The proposed solution does not require changing information systems used by financial institutions,” stated said Dovydas Zinkevičius, Head of Columbus Lietuva. 

“All you need is to install an extra API module which would automatically collect the needed data from the institution’s databases and submit them in a standardised format to the data reception module of the supervisory authority.” 

GovTech Lab: Infusing institutions with tech

Bank of Lithuania et al introduced the regtech solution at a GovTech Lab event, a Lithuanian public sector initiative focused on “encouraging the creation and use of innovative solutions for the government.”

Originally founded in 2019, the GovTech Lab team helps identify challenges, work out solutions, accelerate startups and SMEs, and build communities.

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May 28, 2021

FCA bans ‘price walking’ for insurers from Jan 2022

FCA
pricewalking
insurers
Insurtech
3 min
The City regulator has said insurers must not raise prices at renewal and penalise loyal customers

Insurers will no longer be allowed to raise premiums upon annual customer renewals following a new ruling by the Financial Conduct Authority (FCA)

The new move, which comes into effect in January 2022, will directly affect people renewing their home or motor insurance because they will pay no more for their premiums than a new customer. 

The FCA said the change will save loyal customers an estimated £4.2bn over a 10-year-period. However, it also admitted the move could mean cheaper deals for new customers can no longer be sustainable for insurers attempting to attract business. 

Price walking practices ended

According to reports, the FCA has been working on changing the rules on ‘price walking’ as it is termed, because customers are charged more their annual premiums, even though their level of risk remains the same. The system has resulted in complaints from consumer groups that loyal customers pay more unnecessarily.

Speaking about the regulatory change, Sheldon Mills, from the FCA told the BBC

"These measures will put an end to the very high prices paid by many loyal customers. Consumers can still benefit from shopping around or negotiating with their current provider, but won't be charged more at renewal just for being an existing customer."

Victory for the customer

Consumer groups have hailed the change as a victory for customers who have ended up paying higher premiums unnecessarily, but admitted it presented huge implications for insurers in the short term.

Consumer Intelligence CEO, Ian Hughes said, “These changes represent a tsunami for both insurers and their customers, but we should be in no doubt that the fault line that sits underneath this is fair value, mentioned 153 times in the final statement. GIPP changes will feel like just a ripple for those who don’t offer fair value to customers."

He continued, “This is going to be a bumpy ride for insurance brands and consumers alike in the short term. Today, the FCA has revealed that cash and cash-equivalent incentives, other than toys and carbon off setting, cannot be used to entice new customers without being offered to renewing customers. This means the savviest consumers who shop around each year will see prices rise and discounts and offers disappear.

“However, there is an opportunity for the industry to take advantage of all this change that is coming and do something that will be good for brands, good for the industry and good for consumers."

Consumer Intelligence PR and communications manager, Catherine Carey agreed, and described the victory as “a shot in the arm for innovation.”

Carey said the move “presses a giant reset button on the relationship between price and value, it will change the relationship between brands and consumers.”

She explained, “We expect to see insurers changing their models and new firms entering the market for the first time as loss-making year one pricing phases out. If you look at these new rules, and specifically the introduction of fair value, it’s the most exciting time for the development of the general insurance market for decades.”

Hughes also warned against insurers resisting the regulatory change, “Those that don’t take advantage of the opportunity are going to find it really tough.”

He added, “The tipping point we find ourselves at today is a critical point in the journey of this industry and there is an opportunity to be positive.”

 

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