This presentation was given at the prestigious ONE Aldwych hotel in London on July 14th 2016. The presentation discusses the implications to finance as regulatory and compliance controls become increasingly strict. How confident can you be that you are doing enough to spot and prevent risky transactions and money laundering attempts? And could technologies like blockchain help to increase confidence in transactions? In July's edition we're talking about Trust, Transaction Monitoring, and anti-money laundering (AML) for financial messaging specifically: How secure are current transaction methods? What are the key weaknesses which can be exploited? What approaches can be used to identify anomalies in financial messaging traffic? What are the risks to Compliance Officers and financial institutions? Are there improvements which can be made transaction monitoring systems? Can technologies like blockchain be used to increase trust and confidence in financial messaging?

1. FINTECH TALKS LIVE
JULY EDITION
TRUST,
TRANSACTION
MONITORING AND
AML FOR SWIFT
MESSAGING presented by

2. OPENING REMARKS
CRAIG BEDDIS

3. PRESENTATION
KEITH FURST

4. OFAC
FINES
Source:
https://risk.thomsonreuters.com/e
n/resources/infographic/fines-
banks-breached-us-
sanctions.html
2012$1.9 BILLION
2013$100 MILLION
2014$8.9 BILLION
2015$1.45 BILLION

5. MODEL
RISK
MANAGEMENT
Source:
http://www.occ.treas.gov/news-
issuances/bulletins/2011/bulletin-
2011-12a.pdf
Governance
Model Validation
Model Development, Implementation & Use

6. COMPLIANCE
DEVELOPERS

7. THIS
GUY

8. WAKE UP CALL!

9. THE
PANAMA
PAPERS
214,488
200+
11.5m
12
29
ENTITIES
INVOLVED
DOCUMENTS
LEAKED
COUNTRIES
INVOLVED
FORBES LISTED
BILLIONAIRES
COUNTRY
LEADERS
Source: International
Consortium of Investigative
Journalists

10. MT 202
UNDER
SCRUTINY
SWIFT doesn’t prevent its use
Improper use prevents screening
Misuse is expensive and manual
Regulators are increasing scrutiny on misuse

11. MT 202
MISUSE
EXAMPLE

12. ANNUAL
CERTIFICATION
Source:
http://www.dfs.ny.gov/legal/regulat
ions/proposed/rp504t.pdf
The Department of Financial Services (the “Department”)
has recently been involved in a number of investigations
into compliance by Regulated Institutions, as defined
below, with applicable Bank Secrecy Act/Anti-Money
Laundering laws and regulations1 (“BSA/AML”) and Office
of Foreign Assets Control (“OFAC”)2 requirements
implementing federal economic and trade sanctions.
As a result of these investigations, the Department
has become aware of the shortcomings in the
transaction monitoring and filtering programs of
these institutions and that a lack of robust
governance, oversight, and accountability at senior
levels of these institutions has contributed to these
shortcomings. The Department believes that other
financial institutions may also have shortcomings in their
transaction monitoring programs for monitoring
transactions for suspicious activities, and watch list
filtering programs, for “real-time” interdiction or stopping of
transactions on the basis of watch lists, including OFAC or
other sanctions lists, politically exposed persons lists, and
internal watch lists.

13. CAN BANKS
RE-RISK
RATHER THAN
DE-RISK?

14. Country Risk
Amount
Frequency
:20:55555555-5555
:23B:CRED
:32A:000555USD5443,99
:33B:USD5443,99
:50K: ORIGINATING CUSTOMER
NAPLES IT
:52A:BCITITMM500
:53A:BCITUS33
:54A:IRVTUS3N
:57D: BNP PARIBAS S.A.
GRENOBLE FRANCE
:59F:/55555555555555555555
1/BENEFICIARY CUSTOMER
2/ADDRESS LINE 1
3/BE/BRUSSELS
:70:/RFB/INVOICE 5555555
:71A:SHA
:72:/ABCD/narrative
//more narrative
/EFGH/narrative
BLOCK3

15. RE-RISKING
CRITERIA
Customer banking outside of their jurisdiction
Micro-jurisdictional risk
Risk rating methodology and visualization

16. CUSTOMER
BANKING
OUTSIDE
OF THEIR
JURISDICTION
RUSSIA BANKING
THROUGH LATVIA

17. MICRO
JURISDICTIONAL
RISK
MOLENBEEK
BELGIUM

18. EVENT
DRIVEN
RISK

19. EVENT
DRIVEN
RISK
DID YOU SPOT THE
DIFFERNCE?

20. IN
SUMMARY
Do you have/know your Unicorns?
In a real-time world why calibrate annually?
Is your AML technology helping you re-risk
vs. de-risk?

21. LET’S EAT