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The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
The Role Of External Information In Risk Based Systems   Dma 2009   Sda Bocconi   Claudio Foglini
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The Role Of External Information In Risk Based Systems Dma 2009 Sda Bocconi Claudio Foglini

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Presentation held at SDA Bocconi business school …

Presentation held at SDA Bocconi business school
Document Management Academy - April 2009

Published in: Technology, Business
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  • 1. The Role of External Information in Risk-based Systems SDA Bocconi – Document Management Academy 2009 Claudio Foglini Senior Consultant – Intelligence Automation claudio.foglini@scalaris.com © claudio foglini - Scalaris AG
  • 2. Open Source Intelligence Today, up to 80 percent of the information, intelligence, and analytic results that organizations and businesses need for their strategic operations is supplied by private institutions. Universally accessible information (OSINT = Open Source Intelligence) is increasingly squeezing out in-house information collection. INTELLIGENT I DOCUMENT I PROCESSING 2 © claudio foglini for Scalaris AG IDP
  • 3. Scalaris Intelligence Automation Solutions: our capabilities Technology Consulting Open Source Intelligence Automation OSINT and Due Diligence for Corporate, Financial and Military Secure and anonymous Industries Proprietary name matching algorithms Next Generation KYC processes and tools Autonomy IDOL - based Multi-lingual search engine Expertise with global financial institutions and law Scalable enforcement agencies False positive reduction Content On-demand crime and customer due diligence Best available content collections Research design Specialized content Research Execution Internal content integration International network Information brokering AySEC Services Ltd. www.crimeduediligence.net INTELLIGENT I DOCUMENT I PROCESSING 3 © claudio foglini for Scalaris AG IDP
  • 4. Industry Need Departments Typical risk General USPs Specific USPs Compliance Access to must-have AML sources Scalaris IAS: benefits by Industry Banking Know Your Legal Legal risk (World-Check, Dow Jones) Customer related to fraud Customer On-boarding and financial Anti Money crimes access to premium Laundering Advanced Automatic name intelligence information matching Reputational International risk affairs matching performance with Anonimous Search advanced linguistic and cultural capabilities unlimited scalability (for Know Your Top Internal fraud screening up to several Data on-boarding Employees management milions records per day, names and/or transactions) High risk Legal risk Global information coverage industries Partners Security Flexibility in rollout (from Reputational Internal data integration Contractors HR risk laptop to big parallel server farms) Experience with military Operational risk intelligence Automatic maintenance for traceability of activities Anonimous search Law Crime Global coverage enforcement Know Your OSINT units Terrorism Criminal records coverage Attorneys Open Sources Research dpts Conflicts Experience with military INTELLIGENT I DOCUMENT I PROCESSING 4 Army © claudio foglini for Scalaris AG intelligence IDP
  • 5. Who is involved Legal PR Manufacturing Hiring Legal  Enterprise wide corp comms Operations  Cross departmental Human Resources Risk  Indicators Marketing Public  Corporate Affairs  Dept specific XXXXXXX  Decision making processes CI aligned Operations Competition Group Risk Product Legal CSR Compliance CI Marketing INTELLIGENT I DOCUMENT I PROCESSING ©2 006 © claudio foglini for Scalaris AG IDP
  • 6. Security Threats and Corporate Risk Security threats in Oil Industry Sabotage Financial fraud Illegal bunkering Vandalism (??) Social and political instability Theft Sabotage Cyber crime Industrial espionage Terrorism acts Extortions Rubbery – armed Corporate Risks Legal Financial Reputational INTELLIGENT I DOCUMENT I PROCESSING 6 © claudio foglini for Scalaris AG IDP
  • 7. Business Specialised Information Providers Providers HR Crisis Contract Unit ors Corporate Fleet Security localisati OSINT Maps & on and platform Pictures manage Books ment Press Agencies Access Internal control reports Internet INTELLIGENT I DOCUMENT I PROCESSING © claudio foglini for Scalaris AG IDP
  • 8. The back-hole information security risk External monitoring of: •Internet •Content providers •Consultants •Contractors •Employees Access to classified information: •Industrial spionage •Cyber crime INTELLIGENT I DOCUMENT I PROCESSING 8 © claudio foglini for Scalaris AG IDP
  • 9. The risk of corporate „autism“ Auto-refential Emergence of business intelligence, CRM, collaboration tools has multiplied the internal information available, and the emphasis on it High risk exposure Many organisations rely very heavly on intangible information, held by employees (the wealth manager who knows his customer inside-out, etc.) Difficult access to information Internal information (customer names, partner companies, suppliers) is not matched with the external information available (biographies, company profiles, news) Open to external Regulators requirements and risk management policies ask for an intelligent information exploitation of the external information available Intangible information assets can improved with access to external information Risk conscious IT is now capable of „connecting-the-dots“ Content aggregation is now a mature market, offering a global coverage, with structured data delivery and integration capabilities INTELLIGENT I DOCUMENT I PROCESSING © Sc I9I © claudio foglini for Scalaris AG IDP
  • 10. Cost of missing critical information Frequency Severity Medium Cases/ Significant Cases/ Small Minor Cases/Incidents Incidents Incidents Number/Type of required information INTELLIGENT I DOCUMENT IAG © Scalaris PROCESSING 11 © claudio foglini for Scalaris AG IDP I 11 I
  • 11. Information Exploration, refining , distribution INTELLIGENT I DOCUMENT I PROCESSING 12 © claudio foglini for Scalaris AG IDP
  • 12. Scalaris IAS Sentinel platform: Exploration, refining , distribution INTELLIGENT I DOCUMENT I PROCESSING 13 © claudio foglini for Scalaris AG IDP
  • 13. Scalaris Intelligence Automation Solutions Technology Consulting Open Source Intelligence Automation OSINT and Due Diligence for Corporate, Financial and Military Secure and anonymous Industries Proprietary name matching algorithms Next Generation KYC processes and tools Autonomy IDOL - based Multi-lingual search engine Expertise with global financial institutions and law Scalable enforcement agencies False positive reduction Content On-demand crime and customer due diligence Best available content collections Research design Specialized content Research Execution Internal content integration International network Information brokering AySEC Services Ltd. www.crimeduediligence.net INTELLIGENT I DOCUMENT I PROCESSING 14 © claudio foglini for Scalaris AG IDP
  • 14. Objective and definitions We spent the last 50 years focusing on the T part of IT, Know we should spend another 50 thinking about the I part. Information: Inform itself comes (via French) from the Latin verb informare, to give form to, to form an idea of. Content: in media production and publishing, content is information and experiences that may provide value for an end-user/audience in specific contexts. Content may be delivered via any medium such as the internet, television, and audio CDs, as well as live events such as conferences and stage performances Technology: is a broad concept that deals with an animal species' usage and knowledge of tools and crafts, and how it affects an animal species' ability to control and adapt to its environment. Technology is a term with origins in the Greek"technologia", "τεχνολογία" — "techne", "τέχνη" ("craft") and "logia", "λογία" ("saying").[1] However, a strict definition is elusive; "technology" can refer to material objects of use to humanity, such as machines, hardware or utensils, but can also encompass broader themes, including systems, methods of organization, and techniques Intelligence (abbreviated int. or intel.) is not information, but the product of evaluated information, valued for its currency and relevance rather than its detail or accuracy —in contrast with "data" which typically refers to precise or particular information, or "fact," which typically refers to verified information. INTELLIGENT I DOCUMENT I PROCESSING 15 © claudio foglini for Scalaris AG IDP
  • 15. New rules and the “pressure to know”... FATF: recomandations and blacklists Higher compliance costs US-PATRIOT Act: „war on terror“ (KYC, Margin and efficiency reductions KYCC and transaction monitoring) High reputational and legal risks EU Second and Third Anti-Money Sanction risks Laundering Directives Intangible reputational risks National money laundering ordinances Higher financial complexity = MiFID higher risk of financial fraud Higher automation = less customer intimacy Criminals learn fast INTELLIGENT I DOCUMENT I PROCESSING 16 © claudio foglini for Scalaris AG IDP
  • 16. Internal information proliferation Monitoring & Archiving Financial situation Suspicious events Classification Identification Customer INTELLIGENT I DOCUMENT I PROCESSING © claudio foglini for Scalaris AG IDP 17
  • 17. External information proliferation  Exponential growth of content production  Improvement of content gathering technologies  Information management & analysis becomes a challenge  The proliferation of information will help intelligence processes , as archive information will be more available to analysist  The information over-load lowers the value of free content, often considered less trustful INTELLIGENT I DOCUMENT I PROCESSING 18 © claudio foglini for Scalaris AG IDP
  • 18. The information overload  500 billion web pages  7 million added per day  1 million per day going out of date  14 billion emails daily  45 million scientific articles growing at 5,000 per day  Insurance companies receive 35,000 letters per day in UK  Enterprise data is doubling every six months INTELLIGENT I DOCUMENT I PROCESSING © claudio foglini for Scalaris AG IDP
  • 19. Sources are less and less open Content is becoming a commodity Subscription based access is limited Market consolidation Low but steady growth INTELLIGENT I DOCUMENT I PROCESSING © claudio foglini for Scalaris AG IDP
  • 20. The risk of not knowing Legal & compliance risk Cost of remedial actions «Top Management attention » cost Cost for rebuilding your brand INTELLIGENT I DOCUMENT I PROCESSING 21 © claudio foglini for Scalaris AG IDP
  • 21. Reasons for not finding the right information Insufficient coverage Update frequency Technical failure Language Exclusive availability of sources Spelling variations Insufficient investment in content provision INTELLIGENT I DOCUMENT I PROCESSING 22 © claudio foglini for Scalaris AG IDP
  • 22. The risk of corporate „autism“ Emergence of business intelligence, CRM, transaction monitoring has multiplied the Auto-refential internal information available, and the emphasis on it High risk exposure Many organisations rely very heavly on intangible information, held by employees (the wealth manager who knows his customer inside-out, etc.) Difficult access to information Internal information (customer names, partner companies, suppliers) is not matched with the external information available (biographies, company profiles, news) Regulators requirements and risk management policies ask for an intelligent Open to external exploitation of the external information available information Intangible information assetts can improved with access to external information Risk conscious IT is know capable of „connecting-the-dots“ Content aggregation is know a mature market, offering a global coverage, with structured data delivery and integration capabilities INTELLIGENT I DOCUMENT I PROCESSING 23 © claudio foglini for Scalaris AG IDP
  • 23. Proliferation of risk factors  The complexity of today‘s world requires a virtually unlimited access to relevant information for decision making Risks Information Operation to infringe regulatory or antitrust constraints, to infringe regulatory or antitrust constraints, to promote corruption and embezzlement, to promote corruption and embezzlement, to participate in fraud machinations, to participate in fraud machinations, to be involved in money laundering schemes, to construct money laundering schemes, to breach international embargoes or national to breach international embargoes or national sanctions, sanctions, to assist in the proliferation of strategic goods to facilitate proliferation of strategic goods and and WMD, WMD, to enable terrorist financing, to enable terrorist financing, to cause serious environmental or health to disguise environmental or health damages, damages, to facilitate organized crime, to being a implicated in organized crime, to disguise activities heavily violating human to be involved in activities heavily violating rights human rights 24 INTELLIGENT I DOCUMENT I PROCESSING 24 © claudio foglini for Scalaris AG IDP
  • 24. Emergence of a risk based governance & compliance Customer Sanction information lists Global PEP data Media Transaction Transaction Risk based Tresholds based KYC data KYC Company Hard copy data Statistical Criminal models records •New regulations (3rd EU AML Directive) know highlight the consequences of unilateral risk management •The value of external information to prevent risk rises considerably •The possibility of global media monitoring is influencing the AML obligations INTELLIGENT I DOCUMENT I PROCESSING 25 © claudio foglini for Scalaris AG IDP
  • 25. Risk Based Approach (RBA) Frequency Severity Medium Significant Small Minor Cases/Incidents Cases/ Cases/ Incidents Incidents 26 Number/Type of required information INTELLIGENT I DOCUMENT I PROCESSING © claudio foglini for Scalaris AG IDP
  • 26. The garbage in / garbage out principle: Quality always matters Open web (5-10 % of available Deep web (90- 95% of available Information) Information) Google like search engines Fee-based providers Value-added providers Quantity Quality Quality Diversity Timeliness Timeliness Indipendence Accuracy Accuracy Selected information Regular update High value Full-text indexing Standard format Allerte automatiche Workflow Integration Confidentiality (trough anonimisation techniques) Very low Precision & Recall Limited update Cost No full text indexing Limited Search & Archive Need of multiple providers Volatility Cost No confidentiality Low confidentiality INTELLIGENT I DOCUMENT I PROCESSING © claudio foglini for Scalaris AG IDP
  • 27. Principles around content selection Providers Evaluation criterias should Source Evaluation criteria should include: include: Coverage Quality Archive historical depth Authority Languages Relevance Local sources availability Trust Exclusive sources Timeliness Content structure (taxonomy) Technical Delivery capability IT capabilities (indexing, abstracts, translation services, inforrmation relationships) + cost of accessing the content + cost of access + cost of elaboration & analysis + cost of elaboration & analysis INTELLIGENT I DOCUMENT I PROCESSING 28 © claudio foglini for Scalaris AG IDP
  • 28. Principles around content selection Fee based news aggregators: companies that offer for a fee, general news content that is business –related and electronically-delivered International Indexing Content Integration Local Content Personalisation Local Language Market Reliability Integrity (full text) Service Consistency Dependability Consultancy Customer Local Account Service Mgmt. INTELLIGENT I DOCUMENT I PROCESSING 29 © claudio foglini for Scalaris AG IDP
  • 29. Over-lapping (content) is not a crime ! Commercial Online Books & Telephone Journals Surveys Maps & OSINT Complex Commercial Human & IT Imagery Universe Services Conferences & Gray Dissertations Literature Internet 30 INTELLIGENT I DOCUMENT I PROCESSING © claudio foglini for Scalaris AG IDP
  • 30. Overview of content providers Business information Dow Jones Factiva, Lexis Nexis, Dialog Specialised content Company World- information Check Dun&Bradstreet, DowJones Experian, Thomson, WatchList Bureau Van Diik SIPRI EIU Scientific/technical/medical information Elsevier, Springer, Thomson, Wiley INTELLIGENT I DOCUMENT I PROCESSING © claudio foglini for Scalaris AG IDP
  • 31. Content providers market overview  Content is becoming a commodity  Subscription based access is limited  Market consolidation  Low but steady growth INTELLIGENT I DOCUMENT I PROCESSING 32 © claudio foglini for Scalaris AG IDP
  • 32. Overlapping is not a crime Dow Jones - Global media - Company data Critical information requirement - Publicly Exposed Persons Lexis Nexis - Sanction lists - Global media - Criminal records Internal - KYC data Provider 1 information Internal Provider 2 information Dialog World-Check - Global Media - Sanction list - Criminal records - Publicly Exposed Persons INTELLIGENT I DOCUMENT I PROCESSING 33 © claudio foglini for Scalaris AG IDP
  • 33. Advantages of an intelligent content strategy Research time reduction Legal, AML, Compliance cost reduction • False positive reduction • Second level investigation need reduction Possibility of exploiting the information available in other departments INTELLIGENT I DOCUMENT I PROCESSING 34 © claudio foglini for Scalaris AG IDP
  • 34. Case solving scenarios Customer information External Customer External information content content Unstructured Hard copy information Unstructured Hard Internet information copy Internet External content Customer information Unstructured Hard copy information External Customer Customer content External information Internet information content Unstructured Hard copy Unstructured information Hard copy information Internet Internet INTELLIGENT I DOCUMENT I PROCESSING © claudio foglini for Scalaris AG IDP
  • 35. Conclusion Risk of not knowing is high: Precautionary principle should be applied, by orienting the choice towards the best possibile coverage content redundancies should be tolerated to concentrate on the information gaps that hide high risk areas IT infrastructures / applications can take responsability for full exploitation and dissemination of critical information Complex search engines can perform federated searches and analyse / connect virtually all type of content INTELLIGENT I DOCUMENT I PROCESSING 36 © claudio foglini for Scalaris AG IDP

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