Top 5 AML Challenges TOO BIG TO SUCCEED - Attivio · Top 5 AML Challenges in 2016 60% Increased regulatory expectations 50% Having enough trained staff 41% Insufficient/outdated technology

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Top 5 AML Challenges in 2016

60% Increased regulatory expectations50% Having enough trained staff41% Insufficient/outdated technology36% Too many ‘false-positive’ alerts27% Budget constraints & increased scrutiny of third-party review

- Dow Jones, ACAMS Global Anti-Money Laundering Survey 2016

“ AML Departments continue to grapple with increased demands on their resources and personnel bandwidth in an effort to maintain an effective compliance program while managing increased expectations and resistance from their end customers. Regulatory pressures are showing no signs of abatement and regulatory uncertainty has added another layer of confusion as AML teams attempt to meet requirements that have not been fully defined. The combination of these factors places a great deal of strain on AML manpower, budgets and resources.”

- ACAMS,Current Industry Perspectives into Anti-Money Laundering Risk Management and Due Diligence

TOO BIG TO SUCCEEDRisk and compliance managers for financial services providers confront two irresistible forces – increasing

technological sophistication among the nefarious and expanding regulation and enforcement. New transaction and communications technologies expand the scope for transaction monitoring and analysis - multiplying the

effects of normal business growth. With this expansion, the rule making and scrutiny of financial transactions have increased around the globe.

These forces produce a set of common challenges:

Recent settlement and penalty history show there is no alternative to processes that sustain administrative and judicial review.

Now, multiply this problem to a global scale – with competing regulatory standards and expectations. Are your risk and compliance solutions meeting these challenges today?

Will they handle a future of growth and additional complexity?

… Each new regulatory framework creates speed, transparency, and auditability expectations

… Each new regulatory solution adds complexity, with new application and data silos

… Adding human review and judgment requires significant operating expenditure

OPTIMIZE YOUR AML INVESTIGATION PRODUCTIVITY: CREATING A HOLISTIC VIEW OF RISK AND COMPLIANCE

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…The business and regulatory landscape is becoming more complex, and management and boards are pressuring CCOs to deliver better information to help them identify and manage a growing list of organizational risks. Many CCOs are understandably challenged to meet the new demands placed on them.

FOCUS ON THE PROBLEMYou have, or will have soon, technology for capturing, storing and analyzing your customers’ transactions. You

also have technology for generating alerts when a suspicious pattern emerges in a customer’s transactions. And you also have technology that creates and manages a customer-specific case file – which contains any and all

suspicious transactions and their alerts.

Your investigators review, verify and add ‘facts’ about the transaction and its parties – and then refer the case for further investigation or dismiss it as non-suspicious. In many organizations,

investigators generate case summaries, which serve to document the review process for subsequent audit or review.

For most institutions, this is the crux of the problem. By relying on investigators to summarize, analyze, and decide on each case’s disposition, operations can only scale with the

productivity of investigators. It’s no wonder annual surveys reveal a shortage of trained AML staff as one of the two greatest challenges cited by AML executives.

By focusing specifically on the process of human review, one of the ten largest global banks has increased the average productivity of its investigators three-fold – an increase that

delivers an annual resource increase valued at over $80MM. It starts with connecting analysts with the right information, in a tightly focused context.


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Identifying customers and transactions from high-risk geographic locations is crucial in controlling money laundering and terrorist financing risk. By obtaining such information, bankers can develop or modify policies, procedures, and controls addressing the risks associated with those locations.

- Money Laundering: A Banker’s Guide to Avoiding Problems, Office of the Comptroller of the Currency, Washington, DC

DELIVER A GLOBAL, 360° VIEW OF EVERY TRANSACTION

For AML, creating a comprehensive view usually involves executing three important steps. First, information resident in disparate locations needs to be unified. Using virtual integration to collect and combine silos,

sources, and solutions can effectively eliminate time-consuming evidence compilation by investigators.

Equally important to a comprehensive view, in a world of expanding electronic information, is the effective correlation of information – even unstructured information prevalent in chats,

communications, and social media sources. A crucial element in that correlation is the discovery of structure hidden within traditional unstructured sources. Performed automatically, this correlation

process can also save valuable investigator time.

Finally, make it global – not as a reflexive, tip-of-the-hat to global markets, but because any AML solution is only as strong as the weakest link in any market. Applying a consistent

process – against a comprehensive view – insures a complete solution that can satisfy regulators across jurisdictions.


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- The worldwide battle against financial crime increases the need for automated holistic case management,

ACAMS Today

CHANGE YOUR GAME HERE’S YOUR PLAYBOOK

• Develop standard document templates that organize facts answering every case investigation question.

• Unify facts across all AML applications and databases, collecting facts and auto-

generating case narratives; save/index for subsequent audit; identify precisely what’s known and what isn’t.

• Calculate scores for case complexity, similarity and completeness to streamline and improve case-analyst assignment.

• Focus analyst attention on most pertinent facts – those known and those absent.

For most compliance professionals, inherent weaknesses will be seen to fall into four main areas:

“…disparate investigations systems limit an organization’s ability to analyze suspicious activity across products, departments and channels.”

“Using experienced, highly-paid senior investigators to manually trawl through countless documents and account histories is not a cost-effective use of a specialist resource and is prone to error.”

“A manually created and gap-free audit trail will be time-consuming, in stark contrast to an automated management system, which will create a comprehensive audit trail from inception to resolution, in real time.”

“…policy changes have been notoriously slow and costly to develop and implement, as business owners and IT, due to resource constraints, are unable to manage new risks and investigation strategies.”


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Effective compliance and control requires an explicit strategic consideration, the ultimate goal being compliance and quality controls that are not only effective but are also efficient, smart, an ultimately able to add strategic value.

A HOLISTIC AML PERSPECTIVE Traditional compliance management relied upon passing monitored ‘data channels’ through fixed filters,

triggering alerts for well-defined characteristics. In a world of rapidly multiplying ‘data channels’ and evolving regulation, this approach – and the human review it requires – can’t scale cost-effectively.

You need a new perspective- a more holistic solution to manage AML effectively. Your organization needs to:

• Maintain an always-on, 360-degree, global view of every transaction

• Reduce the crippling costs of compliance by aggregating the right transaction information and performing essential discovery, automatically

• Perform the correlation of high-risk entities, counterparties and beneficiaries by unifying information across silos

• Surface AML insight and recommendations, focusing research on the most probative evidence

Holistic AML solutions reduce reputational risk, improve compliance efficiency, protect brand value, and manage

the total cost of compliance more effectively.


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Overtime paid to AML investigators during peak review periods was greater than what we paid our Executive team last year.

MEASURE THE VALUE OF ENHANCED AMLThere are four dimensions you can use to quantify the value of enhancing a

holistic perspective on AML. First, quantify productivity gains – benchmarking directly measurable measures of the time required for

initial disposition of cases. Don’t be surprised to see two- or three-fold gains when you compare before and after statistics.

Next, assess the percentage of cases disposed with every investigative fact known. While it may be more difficult to assess the before-after difference, you’ll have a concrete measure of the certainty

inherent in your case investigation process.

A critical indicator, measured either as case backlog or as the fraction of new cases that are closed/disposed over a reasonable time period, is impact. The higher the percentage, across

all jurisdictions, the more consistent and global your solution will be – for analysts and regulators.

Finally, assess your ability to crush traditional deadlines. Track the time required, from pilot to production, to roll out the solution to each regulatory jurisdiction. For a

top-ten institution, initial rollout to their largest jurisdiction (US) was accomplished in just four months. In addition, they’ve virtually eliminated the backlog of open cases –

removing an alarm to regulators.

$The measured, annualized value of an enhanced institutional AML case investigation solution for

a top-ten, global financial services provider.83,000,000


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Our survey results show that not only are the number of economic crime risks increasing, so too are the complexity of those risks and the role that technology plays. This is hardly a surprise in a business environment characterised by growing globalisation, increasingly vigilant enforcement and greater demand for public accountability

- PWC, Global Economic Crime Survey 2016

PROTECT THE ASSETPut yourself ahead of the curve, recycle scarce resources, and anticipate scrutiny. Improving the productivity

of your AML investigation will deliver real financial value – you’re literally monetizing the value of all the data streams that support case review.

In fact, you’re accomplishing even more. With a more certain, productive and global framework for addressing risk and compliance, you’ll be protecting your organization’s reputation and brand. There are

too many examples of the punishment negative publicity can cause a financial services provider.

With a more complete and global solution, you’ll reduce the risk exposure or profile you present to the market. In a world where-risk-based regulatory frameworks are becoming more

common, systematically reducing risk can reduce the likelihood of audit and the scrutiny of enforcement agencies.

Together, the value delivered by a holistic AML solution, such as the example outlined above, minimizes the spectrum of

downside outcomes – from fines and penalties to mandates and publicity. And it will save you real dollars in the short

and long run.


Documents

Top 5 AML Challenges TOO BIG TO SUCCEED - Attivio · Top 5 AML Challenges in 2016 60% Increased regulatory expectations 50% Having enough trained staff 41% Insufficient/outdated technology