Emerging market institutions have a legacy – one shaped by a commitment to stability and risk aversion, but often at the cost of innovation. Compliance and risk management systems that were put in place decades ago remain untouched, not because they are optimal, but because they were the only options available.

The result is tiresome; systems that work just well enough to prevent regulatory scrutiny and change, but not well enough to seize new opportunities. Transaction risk is generally evaluated reactively, based on limited data and regulatory defensability, leaving institutions vulnerable to inefficiencies and missed growth opportunities.

In trade finance and payments, the market doesn’t wait. Fintechs aren’t tied to the status quo, and they’re increasingly winning business by offering faster, smarter, and more modular, customer-first solutions; they manage to handle large volumes of transactions in the face of growing regulatory pressure, particularly in the light of Russian sanctions circumvention and other rapidly evolving regulatory and geopolitical risks. Banks must now ask themselves – will they watch these agile competitors take their business, or will they take the steps needed to unlock growth and reclaim their seat at the global table?

We’ve entered a new era of data-enabled risk management and decision-making. What once took weeks or months of analysis around payment flows, corridor risks, market share, or trade opportunities, can now be processed in an instant. Technology enables real-time insights into risk modelling, enriched by data that helps banks assess both the corridor and the counterparty.

Banks must no longer be defined by outdated geographic stereotypes. Instead, their competitive edge lies in transparent, data-driven risk insights that showcase their true capabilities.  For too long, risk models have been tied to generalised regional assumptions: ‘Your country is high-risk, so your institution must be high-risk too.’ The red tape is drawn, and the door closes. This outdated thinking benefits no one in the network. Why are we limiting our opportunities this way?

Banks operating in misunderstood regions are often labelled as “high risk” because of their geography, not their actual payment flows. These assumptions block global partnerships, even when the institution’s data shows otherwise.

However, Elucidate’s analysis of cross-border transaction flows reveals these assumptions to be false.  Elucidate’s risk modelling of around 14 million transactions – the combination of FI risk, originator and beneficiary risk, corridor risk, and historical coherence – reveals the transaction flows from a selection of banks in the EU countries and the African Union countries. This modelling demonstrates that there is no discernable risk between the transaction activity of the FIs, regardless of their country or origin.  Both data sets show outliers, and those outliers represent the transactions most likely to result in manual investigations and SARs. However, the volume of outliers represents a similar percentage for both regions.

Source: Elucidate

Evidently, a bank’s country is not the ideal way to assess its compliance or financial crime risk; the data tells a much more accurate and nuanced story.  

Legacy systems: What’s holding emerging market banks back

Traditional financial crime risk management workflows often take weeks to complete, delaying critical payment risk assessment decisions, which then lead to errors and opportunities for financial crime to enter our networks. These outdated methods rely on limited data and manual checks prone to inaccuracies and false positives, wasting compliance teams’ resources, straining customer trust, and closing the door to partnership opportunities from other institutions.

Despite being well-meaning, risk ops and compliance teams end up stuck in reactive roles, trying to maintain stability and avoid regulatory penalties, rather than driving growth. Without an adjustment of these legacy processes and improved data visibility, they cannot challenge this approach, enable safer, more lucrative payments,  or offer actionable growth insights to leadership that will bring more opportunities to their institution.

The consequences then become clear: emerging market banks are held hostage by outdated systems, unable to fully serve their customers or realise their potential. However, the right tools can and do rewrite this narrative for institutions that are willing to make the shift.

How modern tools can change the game

Advanced analytics and AI-powered tools let banks demonstrate their true risk posture with enriched, real-time insights, bringing all transaction data into a centralised place through the use of API integrations. This removes critical data siloes that allow financial crime to slip through the net. Instead of relying on assumptions, payment flows are evaluated transparently against defined models and benchmarks, proving security and compliance. 

A key use case is that a bank operating in a historically “high-risk” corridor can show its transactions are compliant and secure, transforming how global partners perceive the bank, and how they assess the commercial opportunities open to them. These tools allow emerging markets banks to build their own risk data profiles, proactively manage risk, and confidently make payment decisions that strengthen their role as reliable partners, thus moving away from “high-risk” perceptions.

From six weeks to six seconds

While this challenge might seem insurmountable, banks do not necessarily need to overhaul entire systems. The future of risk management technology is modular tools that can integrate into existing workflows and tech stacks, allowing institutions to tailor risk management processes. Teams can design models that reflect their bank’s unique realities, improving both efficiency and decision-making.

Manual reviews and fragmented processes that once took weeks can now be replaced by tools that deliver actionable insights in seconds. AI and machine learning detect anomalies and patterns indicative of financial crime, focusing on bad actors instead of inconveniencing honest ones. Real-time systems assess payment flows, corridor risks, and trade opportunities instantly, giving banks the agility to act when it matters most.

Redefining access as a competitive edge

Modern risk management tools, like Elucidate’s Risk Module Builder and others in the market, don’t just improve payment validation flows, they help institutions carve out and build their own, no-code and robust data workflows – they elevate the role of operations teams. By delivering precise, data-backed insights, these teams become key contributors to strategic growth decisions; they can advocate for their customers to global partners and drive more growth by confidently validating what would before be written off as high-risk transactions. 

Previously dismissed markets and misunderstood payment flows become viable opportunities when analysed through the lens of real-time data.

Elevating operations teams

Modern tools enable operations teams to move beyond back-office roles. With precise, data-backed insights, these teams become strategic drivers of growth and lead to:

• Increased trade volumes, as confidence in payment flows grows;
• Reduced operational risks through real-time, precision-driven assessments; and
• Enhanced global partnerships, with banks proving themselves as reliable actors in global trade.

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By adopting real-time, data-powered risk management tools, banks can transform from being labelled as ‘high risk’ to becoming trusted leaders in global trade. The tools to redefine risk and unlock growth already exist, but they require action.

Clinging to legacy systems and processes may feel safe, but in a market driven by innovation, speed, and precision, inertia is the biggest competitive risk. By investing in fully leveraging their data to build a unified risk data story  (rather than reacting to the limited information provided by siloed, and disparate data sources), banks can position themselves as reliable, proactive partners in global trade.

You are not your country – you are your data. For banks ready to embrace this shift and see themselves as data-armed institutions, the opportunities are endless.