Compliance Review on Banks Dont Requrie a Physical Inspection Because

Following on from my previous mail service most modern, mobile-outset FinTech depository financial institution customer's frozen account nightmares, with UK 'app banks' locking clients out of their accounts for security and compliance checks, I have continued to attempt to go feedback from vendors.

I focused a lot on Revolut in my final postal service, partially because while visiting the UK regularly over the past year they oft came up in conversations and concern in both expert and bad ways every bit a ground breaking and market leading european finTech bank.  I am separately an counselor to a UK tech incubator visitor who has had their Defection account frozen with a very substantial corporeality of money in it for compliance issues since November of final twelvemonth, and so accept had some first hand insights into what happens when things go wrong as well as correct.

Banking is a tightly regulated business organization with quite high barriers to entry and strictly enforced regulatory standards, and then the achievement of launching modern, mobile first digital banks is not to be underestimated in a hostile, entrenched banking world that protects its old revenue streams.

What is then odd well-nigh the current scenario for digital banking customers is the sharp dissimilarity with old world 'brick and mortar' banks. If you walk through the doors of a banking concern branch in England or the USA you can inappreciably movement for client service, with people greeting you and showing you to the advisable window or service, and generally maximizing positive customer experience. In the case of California Wells Fargo in that location was a lot of apologizing and candy paw outs by employees afterwards they were publicly disgraced in 2016, a 'please don't close your account' move.

The dissimilarity with the digital banking company feel couldn't be more opposite - it's almost incommunicable to talk to a real homo except through chat apps (if you are lucky - they may just exist running automatic responses to your questions and you think it'south a person).

The digital banking globe we are now in is essentially AI driven compliance systems and algorithms that are automated to adhere to law such equally the U.k. 'Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017' and freeze your account if anomalies are found. In some cases these exceptions are resolved in seconds or minutes and users may not even observe. Clearly where all this can turn into a customer disaster is when accounts are frozen for months -- Revolut outsources some piece of work to partners for resolution and the unfortunate account holder enters a semi automatic bureaucratic limbo. It is this aspect of FinTech banking - the frontline between algorithm driven processes and support staff and partners processing exceptions - where the old paper shuffling world of showing documents, passports and paper trails rears its ugly head and customers are tearing their hair out.

For pocket-size businesses needing to brand payroll and rent this is catastrophic, and the many plaintive online posts from people stranded away with no coin due to locked accounts and other similar horrible scenarios are the man confront of these algorithm and chat app automated processes gone awry.

Amazingly Revolut have left dozens of angry and desperate comments (a couple of them are in the image above) on the breezy 'Why has my account been locked and how to regain access?' 'web log mail service' on their site, which in my opinion is more than of a set of excuses than any existent aid to those in need. The preponderance of these anguished posts online and personal anecdotes and experiences about Revolut and other FinTech banks are why I'thou writing this mail, because it seems to me they have no real urgency in resolving problems which are triggered past automation,  but are then processed with endless verification steps of proving who yous are, sending invoices in for cess etc etc, all at a leisurely stride and with no interest accruing on the money that is 'frozen', except to the holder.

An attempted visit to Revolut and some questions

In the specific instance of Revolut - who appear to be leveraging the venerable high street banking company Lloyds in the UK to underpin some of their transactions - I had sent several emails and employee LinkedIn connections last year to talk over the frozen customer coin problem with no responses. Following my last ZDNet mail service I wrote a list of questions for Revolut and asked 1 of my UK assistants to paw evangelize it to their offices in Canary Wharf London, which I found listed on Google Maps (along with a phone number that just goes to an automated phone tree with no ability to speak to anyone when I chosen).

My banana went to the edifice but was unable to get by the multistory downstairs reception area, with Revolut not picking upwards the phone when called from downstairs. here's my feedback from my assistant:

'I went into Revolut and couldn't go past reception so I asked them to please remember and ask if i could speak to someone in person and they did. Revolut wouldn't selection up. I hung around Canary Wharf and went back in again and they said no one would come up and I couldn't get up to Revolut without a scheduled meeting. So I asked could I get out the document and the reception lady said she couldn't pass information technology on. so I spoke to security and asked him, he said address it in an envelope and he would bring it to the courier office and it will exist sent up to Revolut'.

Mysteriously my assistant noticed that when she left the envelope someone from Revolut did announced to selection up the phone when security called to tell them they had mail.

Fortunately my previous FinTech banking post did separately spur Revolut's PR and Communications managing director to make contact via LinkedIn in the same timeframe, so I was able to send the questions via e-mail.

Revolut's compliance and business teams (I'm assuming they are not more bots) responded in a reasonable 36 hr time frame and answered my follow up questions to some of their overly vague first answers within 24 hours, a much shorter timeframe than the many open ended frozen account investigation processes I was asking questions almost.

Here is my Q&A dialog, edited for brevity:

Q: What are Revolut support staff levels? There appear to be huge numbers of people whose bank accounts are frozen and 'their case is being worked on'? What is the timeframe of a typical compliance process and what are your resolution and customer transparency policies?

Out of three.7 one thousand thousand Revolut customers and 70,000 businesses, an "extremely pocket-size number" are currently nether review. Revolut claim electric current average waiting times for back up on their chat app (as of 15/01/xix) are 'one infinitesimal for retail accounts and ix minutes for business accounts', only 'this tin increase for accounts that are undergoing compliance checks'.

Revolut also 'take an automated phone line bachelor for customers that need to cake their card, and take support staff available to aid with requests on social media'.  'Over 95% of the time, compliance reviews happen in minutes, withal, sometimes this process can accept longer. This usually happens because Revolut work with a wide variety of partners, which means that they sometimes demand to go their perspective. As a result, this tin cause delays. As such, the timeframes for compliance checks volition vary on a case by case footing'.

Q: Is compliance piece of work done offshore or onshore?

Revolut compliance work is handled in the U.k. and in an office in Poland with around 500 staff responsible for customer support and compliance 'who deal with queries 24/seven' run solely through a smartphone or tablet awarding, with no physical bank branches.  'RITA', the Revolut AI support bot, 'successfully resolved over 25% of client queries in 2018 and is constantly being improved, which allows our support agents to bargain with the more serious cases'.

Revolut 'currently have i large support office and volition exist opening an boosted support center in mainland Europe in 2019'.

Q: With Revolut's planned expansion into North America and Asia, what are your consumer guarantees for transparency effectually frozen accounts and resolution in those jurisdictions?

Revolut are currently amending their terms and weather condition 'which will provide further transparency'. 'Due to regulatory requirements, Revolut are non always able to provide data direct to customers if their accounts are frozen. Every bit a firm operating in the (Great britain) regulated sector, Revolut must also 'comply with the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 which ready out detailed requirements in respect of customer due diligence and anti-money laundering'.

Revolut are working closely with regulators in new markets to ensure that they operate correctly around customer due diligence and anti-money laundering. Revolut are proactively working with the Singapore regulator to shape the upcoming Payment Services Bill, based on their 'knowledge and experience from Europe'.

Q: What guarantees and safeguards are there to Revolut customers conducting multiple international transactions that they will not suddenly take their accounts locked? Are there any guidelines and processes you expect these customers to bide by and where is that information made bachelor to them?

'Exist it from Revolut's own analysis or based on data from' partners, accounts can get locked'. The compliance system is designed to temporarily lock an account and place it in a queue until one of our compliance analysts can review the case. To unlock an business relationship, an analyst must review each case before an business relationship is unlocked. So, depending on the complexity of the effect, some accounts can be under review for longer than others. Only a 'compliance agent' is able to unlock a frozen business relationship.

The Compliance team handle all the exceptions that aren't handled by Revolut's compliance system and algorithms. They also directly escalate items, and so that 'a human is making the final decision' (presumably an uncontactable 'compliance amanuensis' partner).

Revolut are unable to support some businesses, and Revolut's business organisation terms and conditions can be found hither:

Maybe I've been living nether a rock…

...But information technology seems to me a lot of this automated compliance logic has a Kafkaesque quality when information technology goes wrong, compounded past a deep sense of business relationship holder vulnerability and helplessness. I don't recall pre fintech banking being this difficult, simply maybe I just oasis't been exposed to this type of compliance checking in the by. Regardless I recollect this is a major footstep in the incorrect direction for the customer -- surely software equally a service vendors should aspire to greater transparency and accessibility for customers and not just openly avowal almost the race to build the biggest platform which they tin can then dominate markets and people with on their terms.

Based on the worryingly open up ended time frames and lack of communication from Revolut if you run foul of their algorithms it seems good advice to make sure you don't accept all your eggs in one basket/ane bank account in the event a portion of your money is out of action for compliance checking for months, especially if you are running a small business organisation.

I was tempted to mail the Southward Park 'poof and information technology's gone' meme to illustrate this post but it would probably trigger a copyright upshot. Naught is easy these days…
--
Correction 21/1/2019 Revolut got in bear on with me by email following publication of this article to state 'Revolut does not outsource compliance work to partners for resolution.' I have also been banned from accessing the Revolut Twitter account.

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Source: https://www.zdnet.com/finance/revoluts-clumsy-automated-fintech-bank-compliance-results-in-frozen-accounts-and-lack-of-customer-service/

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