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Protecting the bank
The document discusses key priorities and challenges in the banking industry, focusing on the importance of protecting banks from financial crime and regulatory pressures through digital transformation and advanced cybersecurity measures. It highlights CGI's solutions, such as intelligent self-learning systems and integrated cybersecurity, designed to enhance compliance, reduce false positives, and enable efficient transaction monitoring. The need for modernization and adaptability in response to disruptive technologies and changing customer expectations is emphasized as critical for future banking success.
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Protecting the bank
- 1. © CGI GroupInc. CONFIDENTIAL Digital Payments Digital Banking Digital Government Digital Energy April 12, 2016 2016 CGI Global Analyst Forum Digital Banking
- 2. 2 Steve Starace SVP &BU Leader, U.S. Northeast Protecting the Bank
- 3. Protecting the bankis a top priority 3 Retail Banking 1. Digital impact on marketplace 2. Changing customer expectations 3. Disruptive technology & competition 4. Importance of business intelligence 5. Regulation & control burden Modernizing Run the Bank Digitizing the Bank Protecting the Bank Wholesale Banking 1. Regulation & control 2. Data driven 3. Scalable platforms 4. Trade lifecycle digitalization 5. Focus on profitable business Modernizing Payments IT Priorities EMBEDDED CYBERSECURITY Reduce the Run Invest in Change Grow Revenue
- 4. CGI’s solutions andservices are addressing clients’ top priorities in the banking industry 4 High-end consulting IP30 Transformational outsourcing Change Grow Run CGI’s Services & Solutions aligned to Banking Industry Priorities Digitalizing the bank Payments modernization Protecting the bank Modernizing “run the bank” Future business model per sub-industry Strategy consulting Agile development factories Customer journey digitalization Digital omni-channel Value-add services Digital insight Banking platforms Standards consulting Consulting at national and bank levels Payment SaaS SaaS and BPaaS SI / testing around payment hubs Systems integrator for identified leading partners Risk and regulatory data governance and architecture Real-time process monitoring / risk / reporting resolution Regulatory reporting SaaS Cyber protection (IP) AML / fraud / KYC solutions and platforms Rules engines Consulting assessment and roadmap / business case Outsource and sunset to generate funds for change Re-platforming and application management Enterprise re-architecting and application portfolio management Disruptive technologies, e.g., blockchain IT intensive BPO around IP Real-time payments Value-add services
- 5. Our IP helpsclients accelerate the transformation from discrete to globally connected digital 5 Global industry platform and end-to-end solution Global Digital Transformation Solutions Business platform for large enterprises Enterprise Digital Transformation Solutions Solves a mission-critical business problem Discrete Digital Solutions BESPOKE REPEATABLE
- 6. Protecting the bankagainst financial crime is costly and complex Key challenges for banks The financial crime landscape • Ever more complex and sophisticated • Regulators are not synchronized • Transaction volumes are growing The traditional approach is flawed • Fraudsters continue to bypass and evade the banks’ controls • Silos of applications don’t drive the efficiencies required The costs are also growing • Fines are increasing • Complex to implement on legacy • Reputation damage impacts share price, profits and RoE 6 0% 16% 12% 8% 4% ROE 15% 8% - 7% Pre-crisis + 3% 11% 2014 avg 6% - 3% to -7% 15% 2017-2019 Increasing regulation is driving change OFAC Fines in 2015 Further regulation to reduce ROE next 3-5 years Further restructuring and transformation required for banks to address increasing regulation Basel 2.5 & 3 reduced bank ROE by 7% Banks responded with operational efficiencies $619M $787M $1.9BN $1.45BN
- 7. CGI’s “protect thebank” capability through digital insights is a differentiated market offering… 7 …delivered through the combination and investment of CGI IP Command and Control Centre | CGI IP: Case Management Intelligent self learning | CGI IP: ISL BIG DATA Sanctions Screening CGI IP: Centaur Know your customer (KYC) Suspicious activity Fraud CGI IP: Hotscan EMBEDDED CYBERSECURITY
- 8. CGI IP: HotScan BENEFITS: Trusted solution working in 30 countries Filters 64% of the total value of currencies traded globally Compliance with international sanction laws Achieves high levels of STP Low levels of false positive Extensive client base - cross industry Fuzzy matching with 24x7 operability Very high performance Future proof – to manage volumes from new instruments 8 BIG DATA EMBEDDED CYBERSECURITY CGI IP: Hotscan HotScan Regulator Lists e.g. OFAC, EU, UN, UK HMT, MOF Japan, etc. Internal Lists e.g. Fraud, Credit XML Lists Flexible watch list mapping module CSV & Excel Lists Flexible watch list mapping module Good Guy Lists HotScan Online HotScan Lookup HotScan Batch HotScan Case Manager Transaction Screening KYC – Due Diligence Case Management
- 9. CGI IP: CENTAuR 9 LAYER1FDS CLIENT L1S L2S Internet WAF L1S L1S FRONTEND OTHER BACKEND AND DWH FRAUD ANALYTICAL AND COMPETENCE CENTER LAYER 3-5 FDS CENTAuR Overview: Monitors account behavior across single and multiple channels using internal and external data Pre-defined rules to detect suspicious (client or employee) activities and transactions Ability to recommend modifications to the model High-performance scalable real-time risk engine Predictive Analysis Module BENEFITS: High speed and real time Enables use on new instruments – eg. Immediate Payments Flexible design enables rapid implementation and integration of Cyber, Case Management etc. Can be utilized as a stand alone solution BIG DATA EMBEDDED CYBERSECURITY CGI IP: CENTAuR
- 10. CGI IP: IntelligentSelf Learning (ISL) 10 ISL is the only solution to reduce false positives from the false-positive history Business Systems Gateways Business Systems Extract ISL Hits Passes Prioritised False Positives Client Screening Manual Review ? 0 2 4 6 8 10 12 14 Month 1 Month 2 Month 3 Month 4 Month 5 False Positives Effectiveness BENEFITS: Fully integrated with Hotscan Can work with other AML components Unique solution dramatically improves efficiency Enables compliance to focus on effectiveness Prioritised False Positive Reduction PercentageHits BIG DATA EMBEDDED CYBERSECURITY Intelligent self learning | CGI IP: ISL
- 11. CGI Services: Cybersecurityand Big Data Cybersecurity: Baked in, not bolted on CGI has qualified Insider Threat assessors We run three accredited security certification facilities We have deep domain expertise CGI helps ensure that $170 billion+ dollars a day are cleared through to the Canadian Payments Association systems safely and securely Our local proximity model enables us to be onsite quickly to manage an incident Big Data Layer: Data2Diamonds is CGI’s methodology for design and implementation of big data analytics solutions 5,000 members globally serving clients in Big Data Analytics Lafayette Digital Center of Excellence as CGI continues to invest in data services 11 BIG DATA EMBEDDED CYBERSECURITY CGI Cyber Security
- 12. Anti Money Laundering– Global Bank Customer 12 Client background • Protecting the Bank from Sanctions violations globally • Volumes growing – 5m txns/day 100,000+ hits a day • HotScan client for 15 years • Intelligent Self Learning (ISL) • Managing false positive volumes • HotScan for AML & KYC • Centralised case management • ISL driven down false positives to circa 3% • ISL increases efficiency without impact on effectiveness • Future - Protect the bank from insider threat & cyber crime CGI solution CGI’s sanctions screening drives control and global efficiency gains for the Bank in fighting money laundering crime Regulatory Compliance Digital Data Insights CybersecurityDigital Transformation
- 13. 13 Legacy silo transformationCGI is bring a holistic solution to the market for our clients The market is growing IP specifically designed to handle growth as new real time services come to market Integrated Cybersecurity CGI is baking in protection for CGI AML clients against cyber hacks and internal threats Digital end to end solution Protecting the institution, managing growth and driving new levels of efficiency and effectiveness end-to-end 1 3 2 4 5 IP30 Combining IP with global industry expertise to deliver extended value to clients Key takeaways DIGITAL BANKING IP
- 14.
Editor's Notes
- #7 HSBC - $ 1.9 B (civil and criminal charges relating to US economic sanctions) Commerzbank – $1.45B (2015) $718M sanctions penalties $734M in AML related penalties Credit Agricole - $787M in Iran Sanctions (2015) ING Bank - $ 619 M (illegally moving billions of dollars through the US financial system on behalf of Cuban and Iranian entities) Credit Suisse - $ 536 M (violating federal and state law related to transactions with countries subject to U.S. economic sanctions)
- #13 Benefits of approach for CGI This creates a 100% differentiated solution which will change client perception Innovative direction for Cyber Security in Banking where we can compete and win Moves away from product comparisons of feature, function and cost Increase value of each bid by factor of 10
- #14 Defense B2B TTM of 133% (as of end of Q1) Q1 Civilian agency margin of 17.6% Federal overall margin in Q1 of 13.8% New Dept of Justice shared services vehicle (SAJE) and Dept of Agriculture cloud services vehicle (RAP) Top 15 banks = #5 JP Morgan; #12 DB; #13 CitiBank