Leverage Investments in AML and Fraud

Program
October 23rd 2013
1

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AML and Fraud Integration: Industry View

Likelihood of Integration

18%

25%

Some Integration
Tried and Failed

7%

No Plans
Significant Integration

29%

21%

Source: Aite Group

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Future Plan

Industry Challenges

AML spend has increased

and will continue to
increase in future
Redundant investments
across AML and Fraud
Different strategic priorities
Organization and cultural
barriers

Technology Dimensions of Integration

Technology Dimensions

Data

Investigation

Transaction and Activity Data

Alert Analysis

Reference Data

Case Management

Data Quality

Workflow

Data Integrity

Loss Management

Data Traceability

Regulatory Reporting

Monitoring and Detection

SAR/STR Reporting

Batch Detection
Real Time Monitoring

Law Enforcement
Communications

Common Models/Scenarios

Analytics

Threshold Analysis

Predictive Analytics

Behavior Monitoring
Statistical Modeling
Data Sampling

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Benefits
Benefits

AML
Compliance

Fraud
Prevention

Cost

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reserved.

Reduce redundant
investigations
Improve disposition
accuracy
Reduce false positives
Reduce cost of addressing
new channels and
products
Reduce IT costs

Impact of Reuse

Data

High

Priority and Impact

Investigation
Detection and Monitoring
Analytics

Regulatory
Reporting

Low

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Priorities

Common system is
an ideal scenario
Data is critical
Investigation can
affect the bottom line
Detection and
Monitoring helps
false positives

Integration Topologies and Strategies

Analytics
Detection/Monitoring

Case Management

Reporting

Data

Deployment Type
End Vision

Maximum investment

ROI

Global Footprint

Single System

High

Very Low

Hybrid Integration

High*

Medium

Different systems, common technology

Medium

Low

Different systems, different technology

Low

High

* ROI is proportional to degree of reuse and integration

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Case Study 1
Deployment Topology

Institution Profile

Case Management

Reporting

Multiple
Fraud
Systems
Multiple
Fraud
Systems
Multiple
Fraud
Systems
Multiple
Fraud
Systems
Fraud Monitoring

AML Txn Monitoring

Data

> $200 Bn in Assets

Different AML & Fraud teams
>10 Fraud monitoring engines
> 500 users in AML & Fraud teams
US Domestic Operations
Several recent acquisitions

Timeline
AML Txn
Monitoring

24 Months

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AML Case
Management

18 Months

Fraud Case
Management

24 Months

Regulatory
Reporting

Case Study 2
Deployment Topology

Institution Profile

Case Management

AML Txn Monitoring

Reporting

Fraud Monitoring

KYC Risk Scoring

~ $100 Bn in Assets
Tier 1 ASEAN Financial Institution
>10M Customers
International Operations

Data

Timeline
AML Monitoring &
Case Mgmt

6 Months

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Regulatory
Reporting

6 months

KYC Risk Scoring

12 Months

Fraud Monitoring

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reserved.