A case for Enterprise-wide Solutions for AML and Anti-Fraud

A case for Enterprise-wide Solutions for AML and Anti-Fraud

The financial services industry is dynamic and it is imperative for institutions to navigate this ever-changing market to grow revenue while controlling costs. Banks are looking to better understand customer needs, provide transparent processes, and strengthen their risk management practices while combating financial crime. This has led to the widespread adoption of an enterprise wide approach to compliance and risk management.

Financial crime is constantly evolving and the need of the hour is a solution that evolves by learning and recognizing patterns.

This paper discusses the important technological features that an enterprise wide solution must offer and provides guidance on picking the right one.

Introduction

Navigating the ever-changing/dynamic financial services industry successfully for most institutions translates into growing revenue while simultaneously controlling costs. From revisiting business models to evaluating how best they can improve analytics and risk management strategies, banks today are metamorphosing into institutions encompassing a variety of businesses such as insurance, securities, investment banking, among others. Even as they consolidate and transform, the underpinning theme for banking transformation over the past year has been on redefining the value experience delivered to customers. With the increasing consolidation we are now witnessing in the banking industry, the approach is to reduce spending and free up investment capacity for a few vital technology projects. This in turn is seeing a surge in technological innovation in the form of client facing, collaborative, analytical and risk management applications. Many banks are moving towards operationally efficient, low TCO ‘bank in a box’ solutions that offer comprehensive process-driven functionality in a ready to deploy state.

Financial crime high on banks’ agenda

Even as banks set out with renewed focus—and some caution—they understand that customer insights into services and processes are what will propel them into gaining a sustainable advantage, while providing transparency and offering value. As regulators are tightening their hold, banks are looking at opportunities to strengthen their risk management practices. Until now, banks viewed risk at a product, portfolio or business unit level without having a firm-wide picture of risk. In today’s context, it is imperative to align business goals with risk profiles to provide an integrated, consistent view of risk across an enterprise. And, this includes financial crime. Fraud and money laundering are the two most common crimes seen in the financial sector, resulting in financial institutions placing financial crime and associated compliance requirements, including combating money laundering and fraud high on their agenda.

The scope of financial crime is expanding to retail banking, online brokerage, private banking, cards, insurance, corporate banking, and institutional securities, among others, aided with sophisticated technology. The rapid growth in the number and complexity of electronic payment transactions across the globe, while creating new business opportunities, has also ushered in new fraud challenges. Fraudsters have stepped up their use of electronic network attacks and innovated to develop new patterns of fraud across new electronic payment channels. As payments systems evolve into real-time settlements and money transfers, payments-related fraud throws up a posse of challenges.

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