Analytics to the rescue

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Data quality is critical in line with the deployment of 3AMLD and 4MLD in banks.

Human instinct and analytics will help uncover financial crime together.

The future of successful compliance will go through extremely skilled data scientists, who will become heroes in your organisation. Human instinct and analytics will help uncover financial crime together.

For the last 15 years, banks and other financial institutions have been deploying AML and CFT solutions. In Europe, in line with the deployment of 3AMLD and 4MLD, all the banks we work with have asked SAS to deploy advanced detection capabilities. But recently we have seen a growing realization that even more than the analytics, the quality of the data is critical. As the adage says, “garbage in, garbage out.”

More than ever, high-quality data is now a must. When we deploy a new AML/CFT installation, our teams are spending the majority of the project fixing the data. We also spend on average more than 20 percent of our time building more intelligent ETL. The data has become the critical part of our projects.

When it comes to AML optimisation, we realised that the major benefits could be exploited only when the data quality was good. In the case of a project with weak data quality, the maximum amount of optimisation that can be reached is, in theory, 3.5 percent. This is, of course, a theoretical number based on some strong hypotheses, but it leads to the conclusion that an optimisation project could be completely wasted by poor data quality.

When it comes to AML optimisation, we realised that the major benefits could be exploited only when the data quality was good.

In the case of mixed data quality, the number of true positive detection is reaching just above 50 percent. This explains the need for data quality and why SAS clients are spending so much on data projects.

In this context, our teams have also seen a big change. In addition to the business analysts and process managers that we have been using for the last 15 years, we are now seeing data stewards and data scientists. On a weekly basis, even in developing countries in Africa, we hear AML/CFT departments are hiring data scientists. To understand the details, our team members – and also SAS clients – need new skill sets within the compliance department. Personnel in these roles must understand statistics and be able to explain it to nonstatisticians.

Human instinct and #analytics will help uncover financial crime together - but #DataQuality is critical. #FraudDetection Click To Tweet

The future of successful compliance will go through these extremely skilled data scientists, who we can really call heroes of the modern world of AML/CFT detection.

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About Author

Christopher Ghenne

Christopher Ghenne is a financial crime specialist with over 10 years’ experience in this field. He has worked in the banking, insurance, government and telecommunications sectors helping organisations comply with Anti Money Laundering regulations and protect their customers and shareholders from losses. Working across the EMEA and AsiaPac regions, Christopher is responsible for developing propositions (including AML transaction monitoring, AML Optimisation and FATCA) for specific markets, working to strategically develop financial crime capabilities.

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