SWIFT Financial Crime compliance initiatives

Bella Lai

Compliance Market, SWIFT Asia Pacific

July 2014

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• SWIFT Compliance Services Roadmap• SWIFT Sanctions Screening• SWIFT Sanctions Testing• SWIFT Compliance Analytics• SWIFT KYC Registry

Agenda

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Financial Crime Compliance Roadmap

Sanctions KYC AML

Processingservices

Traffic analysis

Standards

Data repositories

KYC registry

Sanctions list Management service

AML testing & tuning

Compliance Analytics

Sanctions Screening

Sanctions Testing & tuning(transaction & client systems)

Traffic restriction (RMA)

LiveDevelopmentQualificationExploration

QualityAssurance

FATF 16 Information quality

Client/Name screening

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More on SWIFT Sanctions Screening

service

Your institution

• Best-in-class Screening engine & user interface• Centrally hosted and operated by SWIFT• No local software installation & integration• Real-time screening of FIN messages• Sanctions List update service

Sanctions Screening service

Your correspondents

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Sanctions Screening - headlines

Advantages:- Conversion capabilities (adapts to any format)- Minimal impact: No additional footprint, easy to implement, no additional maintenance, etc.- Inherits integration capabilities of Alliance Access (MQ, FTA, etc.)- Re-use of SWIFTNet infrastructure (security, resilience, ….)

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SanctionsFilter

Screening of Any Format – Connector in Alliance Access

Back Office

Interface

Alliance Access

Payment to be screened

“Good” payment

“Rejected” paymentSanctions

Connector

SWIFT

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More on SWIFT Sanctions Testing

service

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Effectiveness

• Provide assurance that your filter works

• Measure system’s fuzzy matching performance

• Assess coverage of sanctions lists

• Align screening system to your risk appetite

Efficiency

• Reduce false positives through iterative testing

• Build optimisation tests into your processes

• Understand parameter changes• Manage and tune rules and “good-

guy” lists

Testing Meeting regulatory demands

Tuning Managing cost and resources

Sanctions compliance – balancing priorities

with

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Formats

Settings

Lists

Automate • Repeat • Compare • Monitor

Sanctions Testing processDefinetest objective

Downloadtest files

Processtest files

Uploadhit results

Viewtest results

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More on Compliance Analytics

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Leverage SWIFT traffic data to address risk

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• Enterprise risk assessment

• Correspondent risk assessment

• Alignment with risk policies

Risk Assessment

• Compare anticipatory behaviour against country standards

• Periodic reviews to ensure activity is in line with anticipated risk

• Event driven reviews

• Retrospective reviews

Customer Due Diligence

• FIU investigations• Country visits • Correspondent reviews

Investigations and visits

Transaction monitoring

• Pre-calculated metrics

• Key Performance / Risk Indicators

Metrics and dashboarding

• Volume reconciliation

• Scenario optimisation

• System tuning

Compliance Analytics will bring value to…

Compliance Analytics – 2014 – Confidentiality: Public 15

Monitor hidden payment flows & nested activityIdentify countries of origin and destination, and which institutions are involved

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More on SWIFT KYC Registry initiative

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The ContextAn unprecedented challenge to comply with KYC legal requirements

SWIFT KYC

Registry

Complex and inconsistent requirements across jurisdictions

Cumbersome, repetitive and inefficient bilateral exchanges

Unavailability and poor quality of information

Complex and inconsistent requirements across jurisdictions

Cumbersome, repetitive and inefficient bilateral exchanges

Unavailability and poor quality of information

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SWIFT ProfileA new way to bring more transparency on your correspondents’ activities

• Objective and factual, initially based on FIN traffic• Helps validate declared behaviour• Substantiates risk rating process• Different levels of granularity up to the level of

nested correspondents• Optional and shared at bank’s discretion• Specific, transparent and unambiguous• Does not contain competitive information

SW

IFT

Pro

file

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Thank you