Financial institutions use complex business rules to manage various mission-critical tasks, from carrying out complex KYC onboarding to preventing fraud. To be compliant organizations need to carry out a host of complex processes including verification of identity documents, credit history, and incorporation dates to only name a few.

For instance, lenders need to verify massive volumes of global customer information while remaining compliant with changing regulations.

The entire process is long and inefficient because departments need to go over vast amounts of data in order to learn everything they need to know about potential clients. The ever-changing regulations make compliance both challenging and complex.

Using Business Rules Engines

This is why many organizations use rules-based regulatory engines, which are pluggable pieces of software that use conditional if-then statements to carry out decisions.


An example of a compliance rule is:

If a customer updates their personally identifiable information (PII) right before they carry out an unusually high transaction, then flag the account for review.

This rule is designed to prevent attempts at covering up the source of funds and is a common anti-money laundering compliance rule.

These rules are regularly updated due to new financial regulations, changes in company policy, or initiatives to increase competitiveness. Therefore, updates to rules must be performed quickly, carefully, and accurately.

Financial institutions use rules-based regulatory engines to embed regulatory and fraud prevention requirements into their digital products and processes.

A business rules engine runs rules against a data set to carry out verification, cross matches, and flag suspicious data or activity for further inspection.

Companies that don’t use a regulatory rules engine have to manually review each document and search for potential issues and discrepancies while cross-matching various data sources.

Another benefit is a drastic decrease in the number of costly requests for manual investigation. Every case that needs to be reviewed stalls the onboarding process and negatively impacts the customer experience.

Regulatory Rules Engine Benefits

In short, rules engines provide a simplified and transparent approach to compliance management.

Extensive Coverage

Changes to rules are made quickly and easily with rules engines, so organizations are able to adapt to regulatory changes in hours, rather than months.

Financial institutions use rules engines to effortlessly automate tasks necessary to comply with all the regulations, including AML controls.

Boost Customer Experience

An investigation carried out by a human is both costly and prone to error. However, that’s not all – it can also harm the customer experience.

Rules engines streamline compliance at every stage of the customer journey, from onboarding to regular reviews and client offboarding.

Since rules engines can run millions of rules daily, companies can drastically reduce onboarding times, which is necessary for providing an excellent customer experience.

Reduces Friction

False positives create unnecessary friction for genuine clients. This is why an effective onboarding process goes through a list of relevant factors. It onboards legitimate users while reducing the number of unnecessary alerts and false positives.

Error-Proof Compliance Processes

Regulatory rules engines are perfectly designed for critical processes like Know Your Client onboarding. They help organizations to effectively perform due diligence.


Organizations use regulatory rules engines to modify rules in real-time, allowing them to remain compliant with ever-evolving regulations.

Rules engines keep financial institutions compliant with all the relevant regulations while building deeper customer relationships.