In today’s highly regulated financial services industry, compliance with privacy and security regulations is crucial to risk avoidance. Monitoring customers’ transactions continuously, and using their historical data to paint a complete picture of activity, is one way to do this.
Gerald Naidoo, CEO of Logikal Consulting says, “Financial, retail, and other institutions need to lower their exposure to money laundering and terrorism financing activities. Monitoring transactions such as deposits and withdrawals and wire transfers is an important part of this.”
The consequences of non-compliance can be catastrophic, he adds. “The risks include civil, monetary and criminal penalties, increased regulatory attention, and devastating damage to a company’s reputation and brand.”
Ravi Bhat, Logikal Consulting’s COO, says in an automated world, software is your first line of defence against suspicious or fraudulent activity. “However, today’s highly sensitive automated monitoring systems can generate massive volumes of alerts, in turn creating backlogs. Coupled with industry consolidation, there is a growing need to unite disparate systems, processes in a fast and cost-efficient manner.”
“IBM’s Anti Money Laundering solution allows entities to create an enterprise wide view of customer relationship and risks, monitor activity using several different detection methods, investigate and document suspicious or anomalous activity, as well as produce the reports required by regulatory bodies.”
Moreover, Bhat says the solution does this all within an integrated solution built on data management and analytic capabilities. “The solution essentially facilitates the critical task of suspicious activity monitoring using a risk-based approach, and offers myriad benefits.”
Firstly, the business gains a customer relationship and risks view, and is able to improve the accuracy of alerts, concentrating on high-risk events, as opposed to wasting time on each and every alert. “It can also easily adapt to changing needs, and the efficiency and effectiveness of the investigative process is boosted. All known institutional risks are monitored, increasing security and prevention.”
Naidoo says the solution applies advanced analytics and scenarios against a financial organisation’s transactional data to pinpoint anomalous activity or behaviour. Once spotted, the investigative function enables a seamless workflow that boosts effectiveness and efficiency.
“The software assists businesses with managing any situations that arise such as non-compliance, and helps them to develop a sustainable and cost-effective solution to ongoing anti-money laundering compliance.”
“The real challenge to preventing financial crimes, is creating a balance between solid, effective security measures, while keeping the impact to the business to a minimum. The IBM AML solution allows businesses to maintain sensitive areas and crucial decision-making processes in-house, such as suspicious activity report filing. It also compiles and formats investigative data offshore to expedite in-house analysis and decision making and outsources the manual and time-intensive highly defined processes, to save time and money.”
However, Naidoo says a solution is only effective if it is implemented properly. “These powerful IBM solutions need to be implemented by a company with the proper experience and know-how. Unfortunately, in South Africa this is easier said than done. Many resellers and solution providers offer some of the necessary skills, but Logikal is the only company that can boast the experience, deep technical skills, and solid IBM expertise needed to implement a solution of this nature properly.”
