Compliance

Compliance and Risk Management on Ripple

At Ripple, we understand that compliance and risk management are critical to your bank, which is why we build solutions that offer greater visibility into and control over cross-border settlement.

Ripple offers seamless integration with your bank’s existing systems and processes, such as anti-money laundering controls, fraud detection, sanction screening, and regulatory reporting.

Ripple makes it efficient for your financial institution to meet compliance requirements while reaping the benefits of real-time settlement. While financial institutions integrating Ripple remain responsible for employing their own compliance measures, Ripple offers a way for your bank to reduce operational and risk management costs.

Reducing Operational Costs Through Pre-Transaction Communication

Today, sending banks transmit messages to receiving banks without any possibility of a response. If any information is incorrect, the payment will fail and has to be repaired or returned to the sending bank, which creates operational cost for both banks. In addition, payments take 2+ days to settle and are transferred simultaneously but separately from payment information, meaning there is a high risk of miscommunication leading to payment failure.

Ripple improves the efficiency of communications between sending and receiving banks. Pre-transaction communication on Ripple enables both banks to validate all required payment information — such as customer identity and risk profiles, fees, FX rates, and expected times of delivery — before funds are transferred. This capability allows banks to know whether a payment will execute, thus eliminating the need to return failed payments. Any issues with a payment are immediately visible and can therefore be rectified more quickly than in the traditional banking system. Pre-transaction communication on Ripple greatly reduces operational costs and risks associated with repairing and returning invalid payments.

Managing Liquidity and Compliance with Associated Regulations

Banks face increasingly demanding liquidity and compliance requirements. These requirements hedge risk inherent to today’s infrastructure in order to provide greater stability to financial systems.

By providing modern infrastructure for cross-currency settlement, Ripple reduces systemic risks in three key ways:

  1. Banks transact directly with each other, eliminating counterparties and associated settlement risk.
  2. Banks leverage a competitive marketplace for liquidity instead of depending on one FX provider.
  3. Banks use Ripple to communicate with each other in real-time, which allows them to identify and resolve risks to payments before executing them as well as confirm delivery with absolute certainty.

By removing the risks of correspondent banking, Ripple enables banks to lower their operational and risk management costs.

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Ensure Operational Excellence

RippleNet’s security capabilities are SOC 2 certified. System and Organization Controls 2 (SOC 2) are a set of internal control reports which ensure service organizations have the appropriate processes in place for secure data management and processing.