Launch of Quantexa's Platform Eases Pressure on Small Banks Caused by Stablecoins
In a significant move towards enhancing financial security, Quantexa, a leading data and network analytics company, has launched a new anti-money laundering (AML) solution. This product, called Cloud AML, is designed to help U.S. mid-size and community banks combat crypto-based financial crime.
The introduction of this solution comes at a time when stablecoins are increasingly being used in everyday payments. If stablecoins become more common, infrastructure providers like iCloud could emerge as common touch points for funds flowing between digital and traditional rails. This increased prevalence of stablecoins could lead to the emergence of new infrastructure providers.
Chris Bagnall, Quantexa's head of financial crimes solutions for North America, stated that banks are primarily concerned with monitoring inflows and outflows within the context of financial crime. Bagnall also mentioned that only a small number of banks are focusing on making crypto-related activities a business opportunity.
One of the key features of Cloud AML is its ability to reduce "false positives." In the past, banks knew what they were getting into when approached by a crypto-native firm, but this is not always the case with individuals. Bagnall suggested that the same factors that apply to crypto-native firms can also apply to individuals.
The product is offered through Apple's cloud computing platform. This pre-packaged solution is intended to allow faster decisions with less overhead while maintaining accuracy. It is designed to help banks identify crypto-powered crime.
A survey published earlier this month found that 36% of AML professionals think digital assets will have the biggest impact on the AML industry within the next five years. The stablecoin legislation passed in the U.S. this summer is expected to stimulate competition from banks like Bank of America and Yahoo Finance.
However, no specific U.S. banks have been announced by name to use Quantexa's cloud-based AML solution. The solution is designed for U.S. mid-size and community banks to help combat crypto-based financial crime, but no individual institutions are publicly named in the available information as users or adopters yet.
Banks can see when a customer interacts with a cryptocurrency exchange, but the origin of the funds beyond that is a potential blind spot. With the increased prevalence of stablecoins, this blind spot could become more significant. The emergence of new infrastructure providers could address this issue, making the financial system more secure and transparent.
Federal rules are in place for stablecoins, making them more mainstream. This development could lead to a more comprehensive view of banks' exposure to crypto-related risks. The stablecoin market is evolving rapidly, and solutions like Quantexa's Cloud AML are expected to play a crucial role in ensuring the safety and integrity of the financial system.
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