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FROM THE BATTLEFIELD TO THE BOTTOM LINE: USING MULTI-NODAL NETWORK ANALYSIS TO DETECT FINANCIAL RISK

Christopher KenlyAveshka, Inc.Vice PresidentInnovative Analytic Solutions

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Bottom Line

We can leverage the lessons learned from the government’s change in the way it is doing business after 9/11 and apply them to managing financial risk.

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Pre-9/11 Threats

Pre-9/11, how did we think about national security threats?

Regional Concerns

Economic Interests

Nation-States

Narcotics

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Post 9/11

We are faced with loosely affiliated groups united by ideology • Not tied to nation-states• Independently funded • Operating globally• Operating clandestinely• Difficult to track/trace

How do we view the new threat environment?

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Post 9/11

What has the battlefield looked like?

• No frontline; attacks throughout the country

• Limited visibility into enemy organization & operations

• Evolving adversary tactics & techniques

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Post 9/11

How to deal with new threats?

• New government agencies and programs to facilitate information sharing

• New efforts to collect and share critical infrastructure information and exploit open-source data sets

• Enhanced analytical techniques throughout government

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Post 9/11 How to deal with new threats?

• Multi-nodal network analysis to provide a 360⁰ view of threat network

• Identifies previously unknown linkages using Dark Network Theory

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Analytics in Action• New tools to identify and analyze threat streams, financial networks,

and communications and conduct targeting and travel screening• New technologies and techniques that allow an analyst to query data

from multiple databases rapidly and comprehensively to provide information awareness and reveal hidden relationships

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Threat Environment

Systemic Risk Money Laundering Rogue Trading

Insider Trading

Leaks or Loss of IP

Accounting Fraud

Pump-&-Dump Schemes

Identity Theft

How did we think about financial threats?

Ponzi Schemes

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Financial “Battlefield”What does the financial “battlefield” look like?

• Globalization of risk

• Company brands at risk

• Millions of transactions

• Non-transactional data

• Social media sources

• Proprietary data sources

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How does it currently work?Without analytics, researching and planning for the mitigation of risk is a cumbersome and intricate task.

Financial Risk and Exposure

Unknown exposure to risks results

misinformed decision making

Sifting through massive data sets, located in disparate databases,

and existing in various formats

Traditional mitigation based on transactional analysis often fails to

identify hidden relationships and latent

risks

Analytical accuracy and speed can vary across

organizational divisions, experience

levels, and subject domains

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Lessons Learned

• Use multi-nodal network analysis and data analytics to help mitigate risk• Multi-nodal network analysis

• Identify conflicts of interest • Identify derogatory information (e.g., bankruptcies)• Map social media relationships• Determine front companies• Identify operational tactics

• Data analytics • Connect the dots • Identify linkages quickly

What lessons can we take from the battlefield and apply to financial risks?

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Analytics in Action

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Analytics in Action

Fraud Detection

Anti-Money Laundering

Intelligence Collection &

Analysis

Competitive Intelligence

Transaction Monitoring

Risk Assessment Due Diligence

Brand & Reputation

Management

How can analytics transform the financial industry?

• If used correctly, it can truly be a game changer.

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Benefits of Analytically Enabled Multi-Nodal Network Analysis

Seamless Single intuitive interface enables access to vast quantities of data from disparate sources

Flexible Cloud-based scalable architecture enables tailored inputs and outputs – analysis and reporting on your terms

Cost-effective Independent of your infrastructure so that it can be accessed anywhere with lower total lifecycle costs

Powerful Customizable visualization tools highlight hidden relationships and new avenues of inquiry

Efficient Automated data collection and prioritization of results shrink the analytic timeline

QUESTIONS?

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Points of Contact

SCOTT SCHNEIDERMANo | 571.814.5737m | 917.209.8829

e | sschneiderman@aveshka.com

PRINCIPAL Innovative Analytic

Solutions

ADAM KILLIANo | 571.814.5729m | 571.243.4388

e | akillian@aveshka.com

PRINCIPAL Innovative Analytic

Solutions

CHRIS KENLYo | 571.814.5702m | 609.372.5120

e | ckenly@aveshka.com

VICE PRESIDENT Innovative Analytic

Solutions

KELLI COOPERo | 571.814.5745m | 706.564.2411

e | kcooper@aveshka.com

ANALYSTInnovative Analytic

Solutions