Phillip Doyle's professional journey reads like a fintech hall of fame. Having held pivotal roles at Revolut, ClearBank, Tandem Bank, FICO, and Visa among others, he's not just a veteran in the world of financial technology; he's a become a connoisseur of
financial crime prevention. As the chief risk and compliance officer at Zepz, Doyle faces an uphill battle in safeguarding the digital banking and payment landscape against the relentless march of financial criminals.
In parallel to the accelerated adoption of digital banking and payments triggered by the Covid-19 pandemic, we've witnessed a rapid escalation in the sophistication of illicit actors' attempts to exploit vulnerabilities within the dynamic fintech sector.
As is the case with countless fintechs, the prominent remittance provider and parent company of WorldRemit and Sendwave, Zepz’ and its users are prime targets for criminals eager to intercept the millions of payments being made through its platform every day.
£1.2 billion was stolen by criminals through authorised and unauthorised fraud in 2022, which is equivalent to £2,300
every minute. 78% of Authorised Push Payment fraud cases started online and 18% started via telecommunications.
These figures may encompass the entire UK financial ecosystem, but they underscore the herculean challenge that fintechs of all sizes face in their mission to thwart attacks and safeguard their customers. Regrettably, not all fintech players enjoy a glowing
reputation for their financial crime prevention efforts.
UK neobank darlings, Revolut and Monzo, have long grappled with image problems. Both have faced investigations by the FCA over potential anti-money laundering (AML) breaches, suffering significant reputational blows in the process.
Having joined Revolut in 2019 at a pivotal time for its growth, compliance was becoming more of a priority as the adoption of fintech meant regulators were rapidly establishing parameters for the industry. Doyle reflects on his time at Revolut, noting: "Revolut was a great gig for me. I had the opportunity to help build the whole thing over the course of two years."
Doyle underlines that compliance, often seen as a constraint, can be a competitive differentiator when executed meticulously with a technological and quantum focus. His vast fintech experience positions him to weigh in on whether reputational issues related
to compliance are justified. “I’m sure there are some entities that enter this space without really understanding risk and compliance. It’s all about growth, growth, growth, and they’ll figure it out when they get to it. Other entities
do take it seriously but they’re trying to innovate and do things differently.”
He asserts that clinging to historical transaction monitoring methods may not necessarily be the best approach. Some organisations, Doyle notes, have embarked on innovative journeys, taking compliance and the mitigation of bad actors very seriously.
When fintechs explore new approaches to innovating their financial crime efforts, they need to help regulators navigate uncharted waters. Doyle explains that regulators like the FCA are receptive to these discussions, provided that the approach can be justified,
risks are mitigated, and consumer welfare remains a paramount consideration. He emphasises that every entity is unique, and it's unjust to paint all fintechs with the same brush, particularly those striving for sound risk management and compliance.
What are the challenges facing remittances
The remittances industry presents a multitude of unique challenges. Doyle acknowledges that the industry must strike a delicate balance between curbing criminal activity and facilitating legitimate financial transactions. He stresses: "Technology is truly
the only way to improve this."
Yet, he highlights a lack of focus on machine learning in transaction monitoring, calling for greater collaboration and feedback between fintech and law enforcement to refine technology's effectiveness in fighting financial crime.
Why innovation and inclusion are regulatory priorities
Doyle advocates for two critical regulatory priorities to enhance the digital payments space: an openness to innovation and inclusion. We are in a “wonderful age of technology” where quantum management of risk and compliance is possible, and embracing innovative
risk and compliance management is not just beneficial but essential. However, regulators often struggle to keep pace with fintech's rapid evolution, placing the onus on firms to educate and communicate their innovative plans effectively.
On inclusion, Doyle emphasises the invaluable role of remittances in providing essential services for people to access healthcare, education, as well as allowing migrants with families abroad to send money home.
He calls for a greater focus on KYC guidance for individuals, and greater sponsorship around centralised/shared ID databases, or digital identity. “I don’t think there has been sufficient focus on this in the UK, and it could be a real game changer if we
invest the appropriate time and money.”