Complying with regulation as a community, Bella Lai, SWIFT

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Complying with regulation as a community, Bella Lai, SWIFT

  1. 1. SWIFT Financial Crime compliance initiatives Bella Lai Compliance Market, SWIFT Asia Pacific July 2014
  2. 2. • SWIFT Compliance Services Roadmap • SWIFT Sanctions Screening • SWIFT Sanctions Testing • SWIFT Compliance Analytics • SWIFT KYC Registry 2SWIFT_Compliance_services_April_2014 Agenda
  3. 3. 3 Financial Crime Compliance Roadmap Sanctions KYC AML Processing services Traffic analysis Standards Data repositories KYC registry Sanctions list Management service AML testing & tuning Compliance Analytics Sanctions Screening Sanctions Testing & tuning (transaction & client systems) Traffic restriction (RMA) Live Development Qualification Exploration Quality Assurance FATF 16 Information quality Client/Name screening
  4. 4. 4 More on SWIFT Sanctions Screening service
  5. 5. Your institution • Best-in-class Screening engine & user interface • Centrally hosted and operated by SWIFT • No local software installation & integration • Real-time screening of FIN messages • Sanctions List update service Sanctions Screening service Your correspondents 5
  6. 6. Sanctions Screening - headlines 6
  7. 7. Advantages: - Conversion capabilities (adapts to any format) - Minimal impact: No additional footprint, easy to implement, no additional maintenance, etc. - Inherits integration capabilities of Alliance Access (MQ, FTA, etc.) - Re-use of SWIFTNet infrastructure (security, resilience, ….) 7 Sanctions Filter Screening of Any Format – Connector in Alliance Access Back Office Interface Alliance Access Payment to be screened “Good” payment “Rejected” payment Sanctions Connector SWIFT
  8. 8. 8 More on SWIFT Sanctions Testing service
  9. 9. Effectiveness • Provide assurance that your filter works • Measure system’s fuzzy matching performance • Assess coverage of sanctions lists • Align screening system to your risk appetite Efficiency • Reduce false positives through iterative testing • Build optimisation tests into your processes • Understand parameter changes • Manage and tune rules and “good- guy” lists Testing Meeting regulatory demands Tuning Managing cost and resources Sanctions compliance – balancing priorities with 9
  10. 10. Formats Settings Lists Automate • Repeat • Compare • Monitor Sanctions Testing process Define test objective Download test files Process test files Upload hit results View test results 10
  11. 11. SWIFT_Compliance_services_April_2014 11
  12. 12. 12 More on Compliance Analytics
  13. 13. 13Compliance Analytics – 2014 – Confidentiality: Public Leverage SWIFT traffic data to address risk
  14. 14. Compliance Analytics – 2014 – Confidentiality: Public 14 • Enterprise risk assessment • Correspondent risk assessment • Alignment with risk policies Risk Assessment • Compare anticipatory behaviour against country standards • Periodic reviews to ensure activity is in line with anticipated risk • Event driven reviews • Retrospective reviews Customer Due Diligence • FIU investigations • Country visits • Correspondent reviews Investigations and visits Transaction monitoring • Pre-calculated metrics • Key Performance / Risk Indicators Metrics and dashboarding • Volume reconciliation • Scenario optimisation • System tuning Compliance Analytics will bring value to…
  15. 15. Compliance Analytics – 2014 – Confidentiality: Public 15 Monitor hidden payment flows & nested activity Identify countries of origin and destination, and which institutions are involved
  16. 16. 16 More on SWIFT KYC Registry initiative
  17. 17. The Context An unprecedented challenge to comply with KYC legal requirements 17 SWIFT KYC Registry Complex and inconsistent requirements across jurisdictions Cumbersome, repetitive and inefficient bilateral exchanges Unavailability and poor quality of information Complex and inconsistent requirements across jurisdictions Cumbersome, repetitive and inefficient bilateral exchanges Unavailability and poor quality of information
  18. 18. 18SWIFT_Compliance_services_April_2014
  19. 19. 19 SWIFT Profile A new way to bring more transparency on your correspondents’ activities • Objective and factual, initially based on FIN traffic • Helps validate declared behaviour • Substantiates risk rating process • Different levels of granularity up to the level of nested correspondents • Optional and shared at bank’s discretion • Specific, transparent and unambiguous • Does not contain competitive information SWIFTProfile
  20. 20. 20
  21. 21. Thank you 21

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