Benelux forum 2014 - Compliance Analytics
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Benelux forum 2014 - Compliance Analytics

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Presentation from the SWIFT Benelux Forum held in La Hulpe on 19/20 March 2014.

Presentation from the SWIFT Benelux Forum held in La Hulpe on 19/20 March 2014.

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    Benelux forum 2014 - Compliance Analytics Benelux forum 2014 - Compliance Analytics Presentation Transcript

    • Compliance Analytics March, 2014 Introduction
    • Compliance portfolio Compliance Services - Introduction 2 Payments data quality assessment FATF rec 16 Compliance Analytics Sanctions list service Sanctions KYC AML Processing services Traffic analysis Standards Data repository KYC registry on SWIFT membership AML testing & tuning Screening Testing Traffic restriction (RMA)
    • Compliance Services - Introduction 3 Help Banks identify possible anomalies in their transaction activities by • Providing an overview of the overall context through SWIFT total activities • Providing a comprehensive view of a bank’s transaction activities, across all subsidiaries, with all their correspondents • Helping banks analyse their transactions by benchmarking vs SWIFT totals, vs peers • Providing risk analysis tools/visuals and alerting mechanisms to help detect potential anomalies Objective Compliance Analytics – Leveraging SWIFT traffic data for risk monitoring RISK MONITORING
    • • Macro views (geography, value, currencies, volume) • Aggregated views of bank’s total activities • Benchmark vs SWIFT totals • Feed AML and Sanctions risk assessments • Prepare country visits • Alerts in case unexpected behaviour or activity outside of acceptable thresholds (e.g. dormants, outliers, spikes) • Drill down to identify reasons of alerts • SWIFT as a neutral 3rd party source • Internal and external reporting • Assurance - reconcile volumes and values • Challenge compliance with own policies and controls - provide proof • Challenge settings of monitoring systems. Value proposition Identify and target highest risks Challenge own controls Anticipate threats and trends Report Institution SWIFT 4Compliance Services - Introduction
    • High level Outliers Reporting Alerting BankA BankB BankC BankD BankE BankF BankG BankH BankI BankJ CurrentGrowth 25% -30% 14% 20% 70% -23% 60% 18% -6% -33% Intervalmin -40% -40% -10% -45% -66% -46% -45% -80% -30% -100% Intervalmax 30% 35% 10% 50% 73% 55% 52% 95% 33% 75% Mean -5% 1% 1% 4% 4% 4% 3% 22% 3% -20% -100% -50% 0% 50% 100% -100% -50% 0% 50% 100% The offering combines a service and a tool Branches Correspondents Countries Corridors Services • Tailor the offering • Setting of alerts based on customer’s needs Tool • Targets analysts • Overall reporting • Possibility to drill down • Outliers / alerts based on statistics and user defined thresholds Drill down RISK • Institution specific • Other risk definitions April 2014 Compliance Services - Introduction 5
    • 6 Leveraging country of origin and beneficiary country to provide additional insights CA UK CH YE Compliance Services - Introduction MT103: field 52A MT202: field 52A MT103: field 57A MT202: field 58A BIC code BIC code
    • Example SWIFT Compliance BI data for DEMO Bank: Country drill-down (Mauritania) Data Sources All figures based on Inbound payments (MT103 & MT202cov) from correspondents in Mauritania – Full Year 2013 1. Geographical distribution of Demo Bank branches/affiliates, based on value of inbound traffic. Payments with 4 Demo bank affiliates in 4 countries 2. Top20 Ultimate beneficiary countries (field 57a), based on value of inbound traffic: Top 20 out of 100 countries overall 3. Sanctioned country as ultimate beneficiary, based on value of inbound traffic. Example has one payment sent by Bank X in Mauritania, via Demo Bank, with Cuba as ultimate beneficiary country Value distribution 2. Ultimate beneficiary countries – Top 20 3. Do any flows end up in a country with sanctions? 1. How many DEMO Bank affiliates does Mauritania interact with? 4 branches in 4 countries Beneficiary country drill down: Individual sanctions are applied to Cuba, however there is a $217 USD transaction Compliance Services - Introduction 7
    • Compliance Services - Introduction Currency distribution of payments from CORRATWW (based on value of inbound traffic) DEMO Bank correspondents in Austria (based on value of inbound traffic) Top10 Austrian corridors and DEMO Bank activity share (based on value of inbound traffic) Top20 DEMO affiliates receiving payments from CORRATWW (based on value of inbound traffic) Correspondent Analysis – Correspondent CORRATWW Inbound payments (MT103 & MT202cov) – Full Year 2013 129 Poland 130 Slovenia 16354 (33%) Hungary 32926 (8%) Italy 442 Slovakia 699 France 805258 (32%) Bulgaria 8428 (1%) Germany 1,101220 (20%) Austria 1,972552 (28%) Other countries (43) 14 (2%) 66 (15%) 12 (9%) 8619 (22%) United Kingdom 15 (12%) in billion USD DEMO Bank Total SWIFT CORRAT2L Other correspondents in AT (41) 111 123 CORAATWW 14 CORBAT22 17 22 COROAT2L 42 CORBATWW 63 COROATWW CORGATWG 136 CORNATWW 157 CORRATWW 175 CORUATWW 384 in billion USD 8 1. What are the top Austrian corridors and correspondents? DEMO Bank is a major player in Austria with 51 correspondents 2. How many DEMO Bank affiliates does CORRATWW interact with? Payments with 50 DEMO Bank affiliates 3. Currency split of CORRATWW payments activity with DEMO Bank in 2013? 88% of payments are in EUR
    • Compliance Services - Introduction 9 Correspondent Analysis – Correspondent CORRATWW Inbound payments (MT103 & MT202cov) – Full Year 2013 1. What are the higher risk originating countries? 2. Which DEMO Bank affiliates are involved in these flows? 3. What are the ultimate beneficiary countries?
    • Compliance Services - Introduction 10 20% 22% 15% 13% 5% 4% 5% 7% 100% 0 - 500 500-2500 2500-10k 10k-50k 50k-100k 100k-1mln >1mln 15% 11% 7% Subsidiary 2 40% 25% 10% 3% Indonesia 21% 26% 2% Turkey 16% 23% 18% 9% 8% Subsidiary 1 15% 25% 20% 10% 5% Value range (USD) Compare distribution of transactions by value range of subsidiaries vs country averages DUMMY Look at distribution and evolution of value buckets: • By subsidiary • By correspondent • By country • By corridor
    • Compliance Services - Introduction 11 MarFeb > 1mln 100k - 1mln 50k - 100k Sep 10k - 50k 2500 - 10k 500 - 2500 < 500 Oct Nov DecJan Apr May Jun Jul Aug Identify anomalies in distribution by value range on a monthly basis DUMMY
    • Compliance Services - Introduction 12 DEMOXXAA 86034% 52% DEMOXXEE 63040% 44% DEMOXXDD 59041% 58% DEMOXXCC 63048% 29% DEMOXXBB 67030% 48% 14% 22% 24% 2% 16%500 22% 64% 510 51% 39% 550 25% 47% 600 15% 52% 830 42% 46%12% 33% 27% 10% 14% Active relationships Unused relationships (no traffic since creation) Dormant (no traffic for last 12 months) Inbound Outbound Analyse your unused and dormant RMA relationships DUMMY • Overview by branch • Identify correspondents up to BIC level • Ease clean-up
    • New RMA correspondent relations Compliance Services - Introduction 13 125 110105 100 88 76 90 838085 75 65 MayAprJan MarFeb DecNovOctSepAugJulJun Newly created inbound RMA relations in 2013 In FATF countries with deficient AML controls Inbound relations created in 2012 for which no traffic in 2013 With traffic 60% Without traffic 40% EMEA 55% AP 30% AME 15% Overall Breakdown by region for without traffic Number of new relations by month 0 3 4 7 3 0 5 1 10 3 0 12 DUMMY
    • Compliance Services - Introduction 14 Average Growth previous month Confidence interval Correspondent A Correspondent B Correspondent C Correspondent D Correspondent E Correspondent F Correspondent G Correspondent H Correspondent I Correspondent J Current Growth 25% -30% 14% 20% 70% -23% 60% 18% -6% -33% Interval min -40% -40% -10% -45% -66% -46% -45% -80% -30% -100% Interval max 30% 35% 10% 50% 73% 55% 52% 95% 33% 75% Average -5% -3% 0% 2% 4% 4% 3% 8% 3% -13% -100% -50% 0% 50% 100% -100% -50% 0% 50% 100% Identify correspondents with exceptional growth based on statistical analysis DUMMY