10/25/2021 | News release | Distributed by Public on 10/25/2021 05:08
In the global fight against money laundering, every bank shares the same top-line challenge and bottom-line reality; anti-money laundering (AML) operations are essential in combatting financial crime-and a costly compliance commitment. Yet each bank's AML organization and technology environment is different, requiring solutions that can be customized to meet individual institutions' needs.
FICO recently released three customer stories that take a detailed look at their different strategies and technology solutions to increase AML effectiveness and efficiency, while lowering costs. In this post I'll share highlights from each story and links to the full versions.
For context, here are some refresher facts on the scope of the global AML challenge. About $1.6 trillion is laundered each year, a monetary total that is equal to about 2.7% of the world's gross domestic product (GDP). However, less than one percent of global criminal proceeds is confiscated, underscoring the challenge of separating huge volumes of unsuspicious transactions from the truly criminal.
Digital account opening during the pandemic created extraordinary opportunities for financial criminals; as a counterpoint, banks were hit with a record $10.4 billion in AML-related fines and penalties in 2020. Against these and other pressures, banks face an urgent need to improve their AML defenses.
Led by Chief Analytics Officer Dr. Scott Zoldi, FICO's expertise in artificial intelligence (AI) drove a dramatic improvement in the efficacy of money laundering detection efforts for three global banks in the Asia Pacific region. FICO® AML Advanced Analytics enabled the banks to realize clear benefits in two ways:
A multinational retail bank serving more than 50 million customers in over 30 countries turned to FICO to automate costly, time-consuming manual customer onboarding processes. The FICO solution leverages robotic process automation, reducing alerts requiring manual investigation by 86% and replacing paper-driven processes with fully automated and digital processes. Key components include:
For a leading Northern European universal bank, FICO spearheaded a digital transformation initiative, delivering a modern compliance system that can address AML and counter-terrorism financing (CTF) regulations specific to each country, with centralized alerting and case management functions.
A major restructuring acted as a catalyst for the universal bank to embark on journey to modernize, merge and restructure its new assets. The bank recognized there were large gains to be made from using one system for anti-financial crime compliance, rather than a patchwork of products, and would ensure the newly formed universal bank would meet compliance requirements.
Working closely with the client, FICO overcame obstacles including a complex legacy infrastructure - multiple core banking and payment systems, disparate systems for know your customer (KYC) and AML, and a decentralized alerting and case management system - to deliver a modern, cloud-based AML solution, on time, meeting regulators' requirements.
Working with the new platform, the client was able to consolidate customer information from external source systems, screen it and create and display alerts. The bank now can coordinate data from different streams and provide a detailed picture of a customer's possible suspicious activity.
For more information on how FICO can assist your organization with implementing comprehensive AML solutions, see www.fico.com/financialcrime.