Keppel Ltd. 1Q 2024 Business Update Presentation Slides
Business Intelligence For Aml
1. Role of Business Intelligence in Anti-Money Laundering Compliance software implementation
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4. Training and Awareness Program Cost of Compliance Anti-Money Laundering Strategy Management Commitment Security & technology usage Administrative and end - user policies and procedures KYC - Data Access/Mining Transaction Monitoring/ Tracking Processes Business and organisation Processes & Initiatives Tactical short term solutions Compliance Requirements International, Regulatory, Industry, Third Party, Internal AML Reporting Risk assessment Investment suitability Tax etc. Investment suitability Tax etc. From Reactive to Proactive approach Integrated Approach Anti - money laundering standards and procedures Know your customer (KYC) - Account Opening
5. DDA CIS SWIFT Money Market transaction hub Load to IEF Load to IEF Load to IEF Data Hub Wires Reference data Posted & Deposit Detail Transactions TDA Extract Normalize & Transform Load Fortent Monitor Systems of Record Data Pipeline FedWire transactions wire transactions customers accounts rel man Concept: Fortent software training material I E F Excel sheet, graphs Excel sheet, graphs Excel sheet, graphs Zurich office London office New York office Money Laundering Data warehouse
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7. Opportunities: Easy Trends analysis Money Laundering Analysis using Tools Users Wealth Management Investment Banking Calculation Engine Actuate Actuate Zurich office Stamford Office Actuate Cognos SAS New York office Actuate London Office Excel sheet, graphs Excel sheet, graphs Excel sheet, graphs Excel sheet, graphs
8. Opportunity: Easy access of information globally Zurich office – Report on Clients transactions unexplained for amount above $10,000 . Stamford office List of clients in US said to be under suspicion radar Berlin office List of clients in Germany said to be under suspicion radar New York office – US government – List of all Clients under suspicion by bank’s investigators Paris office – How to perform better Than Credit Suisse – search Trends Excel, Word London office demands Suspicious Activity Reports
9. Opportunities: Actual number & not mere suspicion about Client & their transaction 10 47 30 12 Wealth Management Investment banking Fixed Income Institutional securities US Europe Asia 3/1 3/2 3/3 3/4 Date Month Region Product
10. [1] Professor S. Seshadari, IIT Professor slides on Datawarehousing. Only the diagram structure taken by Professor’s slide. The concept & content based on my understanding of Delta case. External Problems Privacy concern’ Of clients Globalisation of clients & data Sophisticated money launderers Inefficient compliance systems Reporting to number of agencies & regulation change Accountability of transactions from Corresponding banks, investigate volumes of data.
11. [1] Professor S. Seshadari, IIT Professor slides on Datawarehousing. Only the diagram structure taken by Professor’s slide. The concept & content based on my understanding of Delta case. Internal Problems Massive volumes Of data & Data integration Permissions Within The bank Day – to- day operations Vs Trends & Strategy issues Hire Paralegal & IT team well versed with Patriot Act AML software which is best processes and budget? Where to hire best IT, Technology consultants Each division working on different data system
12. Operational Problem: Quick access to financial information in manage transactions What product promotions have the biggest impact on revenue? What is the most effective distribution channel? Who are my customers and what products are they buying? Which are our lowest/highest margin customers ? What impact will new products/services have on revenue and margins? Which customers are most likely to go to the competition ?
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15. Know Your Customer Guidelines Customer Acceptance - Ensure that you accept only legitimate and bona fide customers. Customer Identification- Ensure that you properly identify your customers to understand the risks they may pose. Transactions Monitoring- Monitor customers accounts and transactions to prevent or detect illegal activities. Risk Management- Implement processes to effectively manage the risks posed by customers trying to misuse facilities. Money Laundering Searches required by the Compliance Officer Source: Presentation by Sanjeev Singh
16. KYC: If Client Involved in Money Laundering Activities Drug Trafficking Bribery / Corruption Prostitution Gambling Tax Evasion Extortion Robbery and Fraud White Collar Crimes ( including Insider Trading and Securities offences ) Smuggling (arms, people, goods) Counterfeiting and Forgery Kidnapping Serious Crime or All Crimes? Organised Crime Source: www.fintraca.gov.af/assets/ ppt /AML
17. Goal: Integration of Company’s data to enable Money Laundering Analysis Across Bank’s various Divisions for Analysis to happen Investment Banking – Europe division Global Wealth Management Fixed Income US division Trading and Settlement Switzerland Division Drill down By city, country Drill down by Financial product Trend analysis By region Granular Details by region City, state, country
18. Fortent Monitor Data Manager Profiling Engine Operational Data Store Detection Engine Investigation System Source: Fortent software training material
19. DDA CIS SWIFT Money Market transaction hub Load to IEF Load to IEF Load to IEF Data Hub Wires Reference data Posted & Deposit Detail Transactions TDA Extract Normalize & Transform Load Fortent Monitor Systems of Record Data Pipeline FedWire transactions wire transactions customers accounts rel man Concept: Fortent software training material I E F Excel sheet, graphs Excel sheet, graphs Excel sheet, graphs Zurich office London office New York office Money Laundering Data warehouse
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21. Goal: Process change [1] http://www.ibtimes.com/articles/20061006/add-nyse-electronic-trading.htm Exchang e Electronic Communications Network Market Maker Firm Internalizes Order Internet order Phone order
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23. The Simple SWOT from MIS750 S TRENGTHS W EAKNESSES O PPORTUNITIES T HREATS 4. Existing Human Resource, Divisions, high cost Brick structure within bank, how to utiilize their services compared to Click structure of small Online companies & consequently their low operating cost. 6. Buying / Tie up with Online Financial services Company and learn from their low cost Click culture, Online handling of Processes like Fox TV who successfully launched My Space on Internet though traditional TV Media company. 5. Lack of methods to know and verify Customer details from what they say and what they actually do. 6. Huge amount of daily data to be checked right from Client’s details, to Transactions, to email correspondence between the Client and the Bank. 7. Cataloging data from around the world, from all their Clients & from all the Client’s transactions and then storing all these details at Bank’s location. 8. Cataloging all the above details and yet comply with the Swiss Privacy Laws of Non Disclosure of Client’s details and maintaining Client’s Privacy.
24. Weakness: Data Integration & Size of Bank Problems: Data Disintegration Across Sources Brokerage Credit card Wealth Management Investment Banking Same data different name Different data Same name Data found here nowhere else Different keys same data
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27. Strengths Weaknesses 1. Use Huge pockets to deploy latest Money Laundering Technology. 2. Use Brand name to enter Online Money Laundering Banking Operations. 1. Provide staff IT training in Money Laundering software to make them equipped to handle Money Laundering software operations. 1. Fines from the regulators. New changing regulations around the world and fines for Bank in event of non compliance to these new laws. Loss of Image in case Bank found guilty of Money Laundering. Tie up Start up firms to join the Online Products & services. Tie-up and Co-Brand services with existing Online player to compete with new born Online firm. Lower cost of operations and transaction to attract customers from competition. Tie-up with IBM, Infosys to provide regular supply of well experienced IT workers. Start transformation of Enterprise into IT governed enterprise parallelly in multiple divisions of bank. Opportunities S O STRATEGIES W O STRATEGIES S T STRATEGIES W T STRATEGIES Threats Super SWOT Company UBS Money Laundering Division 1. Brand Name 2. Cash Flow 3. Well distributed office locales 4. Products and services 5. Trained Financial workforce. 6. Part of Bank Transactions Online. 1. Huge Online market untapped. 2. Commanding presence in US, European 3. Greater reach to clients than competitors 4. Offer more variety services 1. Lack of in house Money Laundering & IT workforce 2. Huge size, slower adoption of technology than by competitors 3. High cost of Brick structure against the Click structure and high operating cost. 4. Late mover in Online market.
28. Strengths Weaknesses 3. Use big distribution to get more clients than competition. 4. Use huge infrastructure to provide Add on services. 1. Use Huge pockets to deploy latest Money Laundering software & trained IT workforce from say IBM. 2. Use brand name to offer Online services and market these. 2. Slow adoption of IT 3. In house trained workforce Tie up Start up firms to join the Online Products & services. Tie-up and Co-Brand services with existing Online player to compete with new born Online firm. Lower cost of operations and transaction to attract customers from competition. Tie-up with IBM, Infosys to provide regular supply of well experienced IT workers. Start transformation of Enterprise into IT governed enterprise parallelly in multiple divisions of bank. Opportunities S O STRATEGIES W O STRATEGIES S T STRATEGIES W T STRATEGIES Threats Super SWOT Company UBS Money Laundering Division
29. Method 1: Customer Relationship Management CRM used for Monitoring/Reporting Customer ID documentation Enhanced due diligence Monitoring Reporting FIU analysis Investigation Application from customer Within the institution Outside the institution When should KYC research need to be carried out? Source: www.baft.org presentation by Andrew Clark
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31. Method 1 Contd… CRM : 2 Tracking Suspicious Behavior by customer, by transaction Alerts Account Value Account Volume Insufficient Account Insufficient Peer Peer Volume Peer Value Events Group by customer Infractions (reason for alert) Source: Fortent software training material Comparison of current month to account profile Comparison of current month to peer profile Event Thresholds Sum of scores SB Thresholds Customer Security Blanket Infraction Account Security Blanket Infraction BLU Infraction Account Profile Peer Profile Monthly Summary Daily Summary Daily Summary Daily Summary
32. Fortent Monitor Data Manager Profiling Engine Operational Data Store Detection Engine Investigation System Source: Fortent software training material Method 2: Information Organization
33. DDA CIS SWIFT Money Market transaction hub Load to IEF Load to IEF Load to IEF Data Hub Wires Reference data Posted & Deposit Detail Transactions TDA Extract Normalize & Transform Load Fortent Monitor Systems of Record Data Pipeline FedWire transactions wire transactions customers accounts rel man Concept: Fortent software training material I E F Excel sheet, graphs Excel sheet, graphs Excel sheet, graphs Zurich office London office New York office Method 2: Information Organization Money Laundering Data warehouse
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35. Method 2: Information Organization What do we look at ? Source: Fortent software training material Role Country Bank Account Island Bank Peoples Bank Lion Bank Transaction Type Originator SWIFT Intermediary 1 SWIFT Intermediary 2 SWIFT $ Wachovia Beneficiary SWIFT $ Message/Product Type SWIFT MT103 WIRE
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37. Business Strategy Competitors Banks like Barclays, Credit Swisse, Citi Group are also deploying Technology, but Business Intelligence might be UBS edge. Local banks, online financial instutions with low distribution network will loose customers badly and may even cease to exist. Competitors Banks like Barclays, Credit Swisse, Citi Group as well Online firms like E-Trade, Charles Schwab are giving UBS tough competition. Customers/Clients Educated, high net worth individual well versed with Online services, specially younger generation will jump on, might loose those who not Online. Client prefer Telephone or web meetings, one-to-one meeting only in special cases. Customers/Clients For Clients coming to bank for one-to-one meet is a norm loaded with paper and going back with bag full of financial documents. Products and Services Single UBS Executive, Client’s point of contact for all kinds of accounts, Asset, Wealth Management or Brokerage to get overall picture. Online services. Products and Services Asset Management, Wealth management, Brokerage – to an extent still manual and same client has to call different divisions for different accounts Business Scope To-Be As-Is
40. Business Strategy Online Asset management, Brokerage, Taxes filing, Pension policy advise and related Online services become norm. Services over the phone, Call center services for minor administrative services like logging on bank’s Web page, opening bank account become a norm. Note Changes Big distribution network. Brand Name Deep pockets to implement any new technology within a short time. Distinctive Competencies Internal Decisions , Regulatory, Etc. Patriot Act details of client submission to government – implementation done Online only using Excel, Business Objects, graphs. Internal Decisions , Regulatory, Etc. Patriot Act implementation done both partly manual, partly Online Business Governance To-Be As-Is
41. Bank teller puts in Customer account Office Boy Faxes Account details Details received at Bank’s Head office Office Boy Suspicious Transaction Accounts Desk Search for Right Client Account & Right FAX Investigator from FBI, Bank, Head Bank Try to trace client’s details Investigator Search Account past trends As – Is : Business Strategy Governance Paper based Approach to Money Laundering Money deposit by Client Bank manager Compiles transaction Volume of paper work In Investigation and Administrative loop holes Leads to loss of Investigation. Is this Client records Processing fine in 2008?
43. Training and Awareness Program Cost of Compliance Anti-Money Laundering Strategy Management Commitment Security & technology usage Administrative and end - user policies and procedures KYC - Data Access/Mining Transaction Monitoring/ Tracking Processes Business and organisation Processes & Initiatives Tactical short term solutions Compliance Requirements International, Regulatory, Industry, Third Party, Internal AML Reporting Risk assessment Investment suitability Tax etc. Investment suitability Tax etc. Business Strategy Governance: To Be From Reactive to Proactive approach Integrated Approach Anti - money laundering standards and procedures Know your customer (KYC) - Account Opening
45. Business Infrastructure Fast typing skills mandatory along with use of all MS Office products from Word, to Excel to Power point, Outlook, Web browsing along with specilised software like Database programmes like SQL, Business Objects, Charles River for few. Paper based work, typing skills, telephonic skills, PC skills limited to MS Word and limited level of MS Excel. HR/Skills Separate head for Money Laundering was brought in. Person was of level of Director reporting directly to Executive Committee and working in parallel with CIO. Division was headed by Business Analyst, Project Manager who was much low in Management ranking. Administrative Process have been designed to be all Online, data transfer, sharing, all online with click of a button. Bank’s declining position, bank responsibility to comply with new new compliances and unhappy customers with slower transaction speed as compared to competitors. Few process were manual, few based on Excel sheets, few other online but there was no integration, so one division could not exchange information with other without use of paper. Key Processes To-Be As-Is
46. Bank teller puts in Customer account Office Boy Faxes Account details Details received at Bank’s Head office Office Boy Suspicious Transaction Accounts Desk Search for Right Client Account & Right FAX Investigator from FBI, Bank, Head Bank Try to trace client’s details Investigator Search Account past trends As – Is : Administrative Approach to Money Laundering REACTIVE APPROACH Money deposit by Client Bank manager Compiles transaction Volume of paper work In Investigation and Administrative loop holes Leads to loss of Investigation. Is this Client records Processing fine in 2008?
47. Current Key Processes – As Is Brokerage Asset Management Private Banking Investment Banking Institutional investors ** Above Pictures taken from Google Images
48. Future Key Processes – To Be Brokerage Asset Management Private Banking Investment Banking Institutional investors ** Above Pictures taken from Google Images
49. Organisational changes As Is To Be Hierarchy based org Structure Services, Product line based org Structure
51. IT Strategy Internal Decisions , Regulatory, Etc. Include all areas that are relevant after the project implementation. Note Changes Internal Decisions , Regulatory, Etc. Include all areas that are relevant before the project implementation Governance Key Applications After project implementation Key Technologies After project implementation Key Applications Prior to project implementation Key Technologies Prior to project implementation Technology Scope Those areas in which the company has a distinct or competitive advantage over their competition after the implementation of the project. Note Changes Those areas in which the company has a distinct or competitive advantage over their competition. System Competency To-Be As-Is
52. Bank teller puts in Customer account Office Boy Faxes Account details Details received at Bank’s Head office Office Boy Suspicious Transaction Accounts Desk Search for Right Client Account & Right FAX Investigator from FBI, Bank, Head Bank Try to trace client’s details Investigator Search Account past trends As – Is : IT Strategy Paper based Approach to Money Laundering Money deposit by Client Bank manager Compiles transaction Volume of paper work In Investigation and Administrative loop holes Leads to loss of Investigation. Is this Client records Processing fine in 2008?
56. IT Strategy: To Be As a result of Process change implementation Exchang e Electronic Communications Network Market Maker Firm Internalizes Order Internet order Phone order
57. IT Infrastructure As-Is To-Be Architecture The IT Architecture prior to the project The IT Architecture after the project implementation. Key Processes The Key Processes prior to the project. The Key Processes after the project implementation. H/R/SKILLS HR duties and functions prior to the project. HR duties and functions after the project.
58. Pre requisites for Integrated approach to trade processing: centralisation of information collection process … to Centralised information source on correspondent banks From … Numerous bilateral information exchanges within financial institutions Source: www.swift.com/index.cfm?item_id=3878
59. As – Is Architecture US Wealth Management Europe Wealth Management Investment Banking US Wealth Management Board meet Europe Wealth Management Board meet Brokerage Management Board meet
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62. DDA CIS SWIFT Money Market transaction hub Load to IEF Load to IEF Load to IEF Data Hub Wires Reference data Posted & Deposit Detail Transactions TDA Extract Normalize & Transform Load Fortent Monitor Systems of Record Data Pipeline FedWire transactions wire transactions customers accounts rel man Concept: Fortent software training material I E F Excel sheet, graphs Excel sheet, graphs Excel sheet, graphs Zurich office London office New York office Money Laundering Data warehouse
63. [1] Professor S. Seshadari, IIT Professor slides on Datawarehousing. Only the diagram structure taken by Professor’s slide. The concept & content based on my understanding of Delta case. Alternatives Centralization and Integration of Various Divisions Key Process change Implementation Of IT in handing Transactions Setting up Separate Money Laundering Division Brick to Click Organization for Internal reporting & HR changes Merger, Tie up with upcoming Online Financial companies & Websites
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67. Organisational changes As Is To Be Hierarchy based org Structure Services, Product line based org Structure
68. Future Key Processes – To Be Brokerage Asset Management Private Banking Investment Banking Institutional investors ** Above Pictures taken from Google Images
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70. Training and Awareness Program Cost of Compliance Anti-Money Laundering Strategy Management Commitment Security & technology usage Administrative and end - user policies and procedures KYC - Data Access/Mining Transaction Monitoring/ Tracking Processes Business and organisation Processes & Initiatives Tactical short term solutions Compliance Requirements International, Regulatory, Industry, Third Party, Internal AML Reporting Risk assessment Investment suitability Tax etc. Investment suitability Tax etc. From Reactive to Proactive approach Integrated Approach Anti - money laundering standards and procedures Know your customer (KYC) - Account Opening
71. Pre requisites for Integrated approach to ML Bank: centralisation of information collection process … to Centralised information source on correspondent banks From … Numerous bilateral information exchanges Source: www.swift.com/index.cfm?item_id=3878
72. Organisational changes As Is To Be Hierarchy based org Structure Services, Product line based org Structure
73. References MIS 760 Team Case 1. www.cfdg.org.uk/.../events_h_050518_E3%20-%20 Money %20 Laundering %20and%20Fraud%20-%20Don%20Bawtree. ppt Presentation from Don Rawtree, Don Bawtree, Partner, BDO Stoy Hayward LLP, Emerald House, East Street, Epsom, Surrey, KT17 1HS 2. Presentation on Briefing on ‘KYC’ Norms and ‘AML’ Measures for IBA Member Banks by Sanjeev Singh, Additional Director, FIU-IND, Financial Intelligence Unit-India 3. www.fintraca.gov.af/assets/ppt/AML 4.http://www.nchelp.org/elibrary/Presentations/2003/2003WinterLegalAffairsMeeting/Consumer%20Privacy%20Issues.ppt 5. www.cityinformation.org.uk/Events/presentations/2007-May-MicheleBate.ppt 6. http://www.amlcft.com/cases.htm#Recent_Major_Fines_and_Penalties 7. Presentation on Briefing on ‘KYC’ Norms and ‘AML’ Measures for IBA Member Banks
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76. “ Cheating during in-class tests or take-home examinations or homework is, of course, illegal and immoral. A Graduate Academic Evaluation Board exists to investigate academic improprieties, conduct hearings, and determine any necessary actions. The term ‘academic impropriety’ is meant to include, but is not limited to, cheating on homework, during in-class or take home examinations and plagiarism.” Consequences of academic impropriety are severe, ranging from receiving an “F” in a course, to warning from the Dean of the Graduate School, which becomes a part of the permanent student record, to expulsion. Consistent with the above statements, all homework exercises, tests and exams that are designated as individual assignments must contain the following signed statement before they can be accepted for grading. I, Kartik Mehta, pledge on my honor that I have not given or received any unauthorized assistance on this assignment/examination. I ,Kartik Mehta, further pledge that I have not copied any material from a book, article, the Internet or any other source except where I have expressly cited the source. MIS 760 Team Case Ethical Statement
Editor's Notes
Source: Picture taken from Google Images
Source: http://www.nchelp.org/elibrary/Presentations/2003/2003WinterLegalAffairsMeeting/Consumer%20Privacy%20Issues.ppt 1. USA PATRIOT Act of 2001 delegates to Financial Crimes Enforcement Network (FinCEN) responsibility for setting requirements for financial institutions to establish: A nti-money laundering compliance, and Customer identification programs (in cooperation with federal functional regulators). 2. FinCEN Information-Sharing Rule Effective Date - 9/26/02 General Purpose - Encourages information sharing among financial institutions and Federal government law enforcement agencies to identify, prevent, and deter money laundering and terrorist activity. 3. Section 352(a) of the Patriot Act - Effective Date - April 24, 2002 General Scope - amended Bank Secrecy Act to require every financial institution to establish an anti-money laundering program that includes, at a minimum: The development of internal policies, procedures, and controls; The designation of a compliance officer; An ongoing employee training program; and An independent audit function to test programs.
Part of the input is taken from training material at UBS. Hence, it meant for only academic use. Source: http://www.amlcft.com/cases.htm#Recent_Major_Fines_and_Penalties Reason for UBS wanting to carve out a separate Money Laundering unit. 1. September 2007: Union Bank of California, San Francisco, CA Failing to maintain an effective anti-money laundering program particularly in the areas of Customer Due Diligence (CDD) and Suspicious Activity Reporting (SAR) Penalty: USD $21.6 million civil forfeiture USD $10 million concurrent civil money penalty Agency: OCC/FinCEN 2. August 2007 American Express Co., Miami, FL and Salt Lake City, UT Private Banking unit, Miami - deficiencies in Suspicious Activity Reporting (SAR) and Customer Due Diligence (CDD) Travel Services Unit, Salt Lake - failing to file accurate and timely SARs. This is the largest forfeiture to date. Penalty: USD $55 civil forfeiture USD $10 civil money penalty. Deferred Prosecution 3. January 2007 Bank of America, Charlotte, NC Bank of America Corp.'s investment services unit failed to comply with anti-money laundering rules relating to "high risk" accounts. The bank failed to obtain customer information for high-risk accounts and did not communicate adequately with its parent to ensure that suspicious activity reports were filed properly. Penalty: USD $3 million civil money
Source: www.baft.org/content_folders/2nd%20European%20Bank-to-Bank%20Forum/andrew_clark. ppt Need of the hour: Change in approach need of the hour. From Reactive to Pro-active approach needed to save bank from any fines, penalties in future. A superior approach to risk management and anti-money laundering (AML) is mandatory – one that 1. Delivers not only the accuracy and comprehensiveness to fight criminals 2. Meet compliance regulations 3. Also bottom-line savings and business process efficiency.
Concept: Fortent software training material But, diagram and changes are based on my understanding of Money Laundering systems. As mentioned a Pre requisite of Intelligence about the Customer and their transactions is Integration of various divisions of the bank. Once that is done, then comes integration of Profile generation per customer and per customer transaction.
One bank, one website is a kind of slogan each Investment bank is marketing to its customer, be it HSBC, Credit Swisse, Barclays (heard during meeting with Technological managers meetings with above mentioned banks). Concept is to make all the services bank is offering to His / her client at one website and avoid the hassle of going to ten different websites by the client to learn about the his / her current stock position and wealth estimates. Though in reality most of the banks are far, at present, in giving this information in totality but many of them have are moving to reach this goal earlier than its competitor bank. 2. Deadlines of implementation of respective compliance comes up regularly in mail box and deadlines from higher ups, so have no specific website to quote.
** Only graph of slide taken from IIT Professor S.Seshadari’s slide, inputs and details are my own understanding of working of bank. Easy Money Laundering Trends analysis from anyplace from CEO to Analyst. Business Intelligence enables enterprise (bank) to dig into the historical trends based on the whole gamut of data in the data warehouse and also Analyse the current market trends based on the recent transactions and on basis of it calculate the upcoming market moves and trends.
** Only graph of slide taken from IIT Professor S.Seshadari’s slide, inputs and details are my own understanding of working of bank. Use of Business Intelligence –Easy access of information for In house investigation team about the company’s clients & their transactions who involved in Money Laundering activity across various divisions & branches of bank round the globe. Best part it is, it is not based on theory by any analysts or senior person wherein theory exists in their mind but results are based on actual numbers given by Business Intelligence tolls like Business Objects. This however, can only happen, if data across the organisation is integrated.
** Only graph of slide taken from IIT Professor S.Seshadari’s slide, inputs and details are my own understanding of working of bank. Hidden Trends on Suspicious Transactions, Direct numbers on amount of all Client Transaction & Visual Analysis of Trends
** Only graph of slide taken from IIT Professor S.Seshadari’s slide, inputs and details are my own understanding of working of Money Laundering software implementation. operational risks, financial institutions are facing: • More sophisticated money launderers who are finding ways to fly below the radar and avoid traditional means of detection • More sophisticated regulatory oversight from a greater number of agencies and organizations around the world • Massive volumes of data from multiple business lines • Inefficient compliance systems that don’t integrate with the firm’s various businesses. Globalisation of clients & data
** Only graph of slide taken from IIT Professor S.Seshadari’s slide, inputs and details are my own understanding of working of Money Laundering software implementation. Assign Director to check for the best Money Laundering software in market Director to report back within 1 month & thereafter presentations by Software vendors in next month Assign Project Manager to Hire AML specialists – Paralegals; Hire IBM IT Technology specialists Project Manager to report to Director who reports to CIO about weekly on training of UBS employees on Money Laundering directives
** Only graph of slide taken from IIT Professor S.Seshadari’s slide, inputs and details are my own understanding of working of bank. With world becoming Global family, Financial analysts were demanding better access to information about the clients, many of whom have accounts, Both in Europe and US branches of UBS.
Part of the input is taken from training material at UBS. Hence, it meant for only academic use.
1. KYC ( know your Customer) 2. Perform Due Diligence for Client 3. Run Suspicious Activity Reports 4. Gets Account, Transaction alerts using Business Logic 5. Save Bank from government fines, if not implemented, Customer found to be a money launderer 6. Early detection and generation of Alerts about Client and his / her account found suspicious of doing Money Laundering. 7. Faster Online processes to enable easy access of Detected alerts across the Organisation’s Money Laundering Division. 8. Access Customer Accounts and Transaction and yet Customer’s Privacy.
Source: Presentation on Briefing on ‘KYC’ Norms and ‘AML’ Measures for IBA Member Banks by Sanjeev Singh, Additional Director, FIU-IND, Financial Intelligence Unit-India Is the bank account and corresponding banks where client has made transaction, the place Regulator wants Bank to Investigate? No, the below is list of places to be looked in, when required, by the bank. Data Files used in Electronic Reporting Control File, Branch Data File, Account Data File, Transaction Data File, Individual Data File, Legal Person Data File
Source: www.fintraca.gov.af/assets/ ppt /AML People normally associate money laundering with Drugs and rightly so, it was one of the first areas that governments focussed on. But it also covers proceeds from gambling, robbery, white collar crime, and extortion. It also covers in some countries the proceeds from bribery, corruption and tax evasion. This gets particularly difficult to fight when in some countries it is part of everyday life and sometimes even legal. In recent years we have also seen a proliferation of human trafficking and prostitution.
** Only graph of slide taken from IIT Professor S.Seshadari’s slide, inputs and details are my own understanding of working of bank. Pre-requisite for Money Laundering Analysis Across Bank’s various Divisions for Analysis to happen is : Centralisation of all the Data, Transactions, Client details of the various divisions of the bank. Once bank has a control of what is Internal transactions and what are External transactions can the bank run analysis. Why is it necessary? In the new system aim is to merge the data from multiple sources in order to prevent data loss and data disintegration. 1. Market data (pricing, fundamentals, news, corporate act, etc.) 2. Front office (indications, pricing, risk, trends, etc.) 3. Back office (accounts, inventory, settlement, etc.) Once data is Centralised only then all the data can be stored at a Data Store ie Data Ware house and only then an analysis can be done. Hence, first goal, even before thinking of Money Laundering analysis is centralisation of all various divisions of the banks.
Source: Fortent software training material As mentioned a Pre requisite of Intelligence about the Customer and their transactions is Integration of various divisions of the bank. Once that is done, then comes integration of Profile generation per customer and per customer transaction.
Concept: Fortent software training material But, diagram and changes are based on my understanding of Money Laundering systems. As mentioned a Pre requisite of Intelligence about the Customer and their transactions is Integration of various divisions of the bank. Once that is done, then comes integration of Profile generation per customer and per customer transaction.
Source: www.kentlaw.edu/faculty/rwarner/classes/certificate/crime/ USA %20 Patriot %20 Act .ppt Controlling Money Laundering: Law enforcement cannot achieve control alone. The cooperation of private business is required. The reason: controlling white collar crime requires access to and analysis of vast amounts of information, information possessed partly by law enforcement and partly by private business. Source: Source: Fraud, Money Laundering, Terrorism & Compliance in the Financial Services Industry by WoltersKluwer - Automated Solutions to an Integrated Problem Document and Message Management – Email and IM : Review and analysis of eMail and IM content, at the access point, to determine if Corporate Policies and legal mandates are being observed Email Archiving and Retrieval: Email is indexed and searchable, greatly reducing the time, cost and effort required to meet the needs of legal discovery and associated business requests. Unstructured Document Archiving, Indexing and Retrieval: An Indexing scheme that allows for the searching of a large number of heterogeneous documents based on complex search criteria, thus greatly reducing the time and resources required to meet both normal business needs and Legal Discovery requirements Access to and Audit Trail for Unstructured Documents: Rules and restrictions regarding document access as well as document editing, permissions, and deletions. Maintaining a detailed audit trail of who has done what to which documents and what the changes were Back up and Recovery of Email, IM and Unstructured Documents: Secure, off-site back-up of all documents on the servers. Quick and efficient restoration
New system merges data from multiple sources, thereby, preventing data loss and disintegration. 1. Market data (pricing, fundamentals, news, corporate act, etc.) 2. Front office (indications, pricing, risk, trends, etc.) 3. Back office (accounts, inventory, settlement, etc.) Aim of the IT could be to change the existing process to a level where work based on Paper is totally scrapped and Phone based and Internet Email based work culture is established. This is also in line with complying with the Privacy Laws by New York Stock exchange rule that mandated that all communication with regard to Stock buy, sell be recorded and stored in order to used in case of dispute by any of the concerned parties.
Strength 1. Brand Name: UBS 30 year old presence and brand name as a reputed Wealth Management financial service provider. 2. Cash Flow: Bank’s huge assets that enable the bank to allocate large sums of money and back it up further, if required, for investing in Technology, software buying, development and training. Bank’s sole aim is to provide better services to its long standing customers around the globe and keep up its reputation as best in Wealth Management in light of global competition. 3. Distributed office locales – UBS has over 500 office around the global including the centers of world Trade in New York, London, Paris and is expanding its branches in Shanghi and Mumbai. 4. Products and services: Well developed and popular existing products and services used by clients in Europe, US. Hence, bank does not need to go haywaire in getting clients. Brand name coupled with long standing Products names bring clients to bank. So, retaining the existing and building upon the clientale is goal. 5. Trained workforce - Has a trained workforce with long experience THREATS: 1. New competitors - Online Digital firms like Charles Schwab, E-Trade, TD Ameritrade. 2. Slow adoption of Technology due to huge size and thus slower in providing Online services to Clients than the new born Online Financial firms. 3. Lack of in house IT workforce with expertise in implementing IT projects to enable UBS as Technologically advanced as new firms. 4. Ill equipped to provide Digital Services to clients as fast as Online firms due to time taken in transforming the huge organisation . 5. Late mover in Online financial services market as compared to few Investment banks and new Online firms and fear of loosing the existing customers to these banks and Online digital financial firms.
THREATS: 1. New competitors - Online Digital firms like Charles Schwab, E-Trade, TD Ameritrade. 2. Slow adoption of Technology due to huge size and thus slower in providing Online services to Clients than the new born Online Financial firms. 3. Lack of in house IT workforce with expertise in implementing IT projects to enable UBS as Technologically advanced as new firms. 4. Ill equipped to provide Digital Services to clients as fast as Online firms due to time taken in transforming the huge organisation . 5. Late mover in Online financial services market as compared to few Investment banks and new Online firms and fear of loosing the existing customers to these banks and Online digital financial firms.
** Only graph of slide taken from IIT Professor S.Seshadari’s slide, inputs and details are my own understanding of working of bank. Huge size, global data & so slower adoption of new technology than by small size companies.
Source: www.cityinformation.org.uk/Events/presentations/2007-May-MicheleBate.ppt Compliance is a legal requirement in most jurisdictions and has become more stringent in the wake of 9/11 and Enron: USA Patriot Act 2001 EU Money Laundering Directives UK Money Laundering Directives Source: Fraud, Money Laundering, Terrorism & Compliance in the Financial Services Industry by WoltersKluwer group The consequences of non-compliance are serious. 1. Compliance & Regulatory risk Fines Loss of charter Loss of GLB powers Multiple agency enforcement actions 2. Prison 3. Reputation risk 4. Operational risk 5. Litigation risk Penalties Under the Act include, among others: Regulatory Fines, and supervisory/examination fees Supervisory Letters/Cease and Desist Orders Civil Minimum of $10,000/day for failure to terminate an account relationship terminated Up to $1,000,000/ transaction for failure to comply with the various provisions under the Act Criminal Depending upon the severity of the infraction officers and directors are subject to personal fines and incarceration
Source: http://www.amlcft.com/cases.htm#Recent_Major_Fines_and_Penalties 1. September 2007: Union Bank of California, San Francisco, CA Failing to maintain an effective anti-money laundering program particularly in the areas of Customer Due Diligence (CDD) and Suspicious Activity Reporting (SAR) Penalty: USD $21.6 million civil forfeiture USD $10 million concurrent civil money penalty Agency: OCC/FinCEN 2. August 2007 American Express Co., Miami, FL and Salt Lake City, UT Private Banking unit, Miami - deficiencies in Suspicious Activity Reporting (SAR) and Customer Due Diligence (CDD) Travel Services Unit, Salt Lake - failing to file accurate and timely SARs. This is the largest forfeiture to date. Penalty: USD $55 civil forfeiture USD $10 civil money penalty. Deferred Prosecution 3. January 2007 Bank of America, Charlotte, NC Bank of America Corp.'s investment services unit failed to comply with anti-money laundering rules relating to "high risk" accounts. The bank failed to obtain customer information for high-risk accounts and did not communicate adequately with its parent to ensure that suspicious activity reports were filed properly. Penalty: USD $3 million civil money
Source: Most of knowledge is based on day to day work at UBS. Along with it other major source of information was www.ubs.com
Source: Most of knowledge is based on day to day work at UBS. Along with it other major source of information was www.ubs.com
Source: www.baft.org/content_folders/2nd%20European%20Bank-to-Bank%20Forum/andrew_clark. ppt When should KYC investigation be carried out? 1. New customers – account opening 2. Existing customers – filling information gaps 3. Ongoing requirement – monitoring of transactions B. Information requirement by regulator for individual: Verification of identity Confirmation of information provided How have they acquired their wealth? Links to organised crime – money laundering? Terrorism funding? Political affiliations and exposure - corruption? Corporate affiliations – bankrupt companies? Fraud? Undesirable associates? Bankruptcy, disqualification from being a director, criminal convictions, civil litigation Regulatory issues B. Information requirement by regulator for company: Confirmation of information provided Identification of beneficial ownership - who is actually behind the company? Who controls it? Links to organised crime – money laundering? Terrorism funding? Political affiliations and exposure - corruption? Corporate affiliations – bankrupt companies? Fraud? Litigation Regulatory issues Environmental issues Health and safety issues Social concerns
Source: Fortent AML training guide 1. Transactions are grouped by account, txn type and day to build Daily Summaries 2. Daily Summaries are grouped by account txn type and month to build Monthly Summaries 3. Monthly Summaries are grouped by account and txn type to build Account Profiles 4. Monthly Summaries are grouped by Peer Groups and txn type to build Peer Profiles
Source: Fortent software training material Alert the Bank about Suspicious Behavior for each and every Bank’s customer and each & every transaction using Account Profile And then comparing the Customer’s Account profile in a given month with past months and thereafter with similar situated customer’s profile called as a Peer profile. If the Account activity crosses the Threshold mark, then an alert is generated and this alert gets accumulated and before the month End is checked by the Bank Money Laundering Investigating team thereby building a case of the customer every month. 1. Verify and maintain the record of: A. Identity of client B. Address - current and permanent C. Nature of business D. Financial Status Maintain records of the identity of clients for a period of ten years from the date of cessation of the transactions with the client. Suspicious transaction means a transaction whether or not made in cash which, to a person acting in good faith – gives rise to a reasonable ground of suspicion that it may involve the proceeds of crime; or appears to be made in circumstances of unusual or unjustified complexity; or appears to have no economic rationale or bonafide purpose. B. Internal Control of the bank: Compliance program provides: 1. A system of internal controls to ensure ongoing compliance 2. An independent testing of compliance conducted by bank personnel (Internal Auditing) 3. Training for all staff via intranet or with internal directives.
Source: Fortent software training material As mentioned a Pre requisite of Intelligence about the Customer and their transactions is Integration of various divisions of the bank. Once that is done, then comes integration of Profile generation per customer and per customer transaction.
Concept: Fortent software training material But, diagram and changes are based on my understanding of Money Laundering systems. As mentioned a Pre requisite of Intelligence about the Customer and their transactions is Integration of various divisions of the bank. Once that is done, then comes integration of Profile generation per customer and per customer transaction.
Source: Fortent software training material Key Alerts & Reports generated by new software Customer Alerts Provides high risk events on accounts that have been conducting wires Bank Alerts Alert on banks that have new activity or unusual increases in wire value or volume Geographic Alerts Alert on high risk areas Monitors bank/country combinations Repetitive Trend Reports Monitor originating and recipient bank and counterparty relationships Velocity Reports Monitor how bank accounts interact with external banks and countries
Source: Fortent software training material
Source: Fortent software training material New User Interface permissions are created: Search Alert Search Customer Search Account
Source: www.ubs.com, personal experience, US Census on Internet penetration rate in US.
Only pictures copied from Images in Google. Picture 1: Picture 2: http://www.storageessentials.co.uk/images/library/filing-efficiency-1.jpg Brick bank - For services Customers come to the bank and seek advise about where to put their money From and thousands of office files on desk of Portfolio manager
Only pictures copied from Images in Google. Products & services are changing. Customers used to go to bank to get the services from the bank, today they want the bank to come to their house, office, On the go to deliver the services using the Internet, Smartphone, Laptops. So, from TO THE BANK to TO THE CUSTOMER has been the change in Products delivery route.
In all As Is-ToBe you must explain the changes require to get from where you are to where you need to be. Changes that take place must be fully expanded upon in your notes. Highlight the changes in color.
** Photos have been taken from Google, but the concept and Process are created by me. The process has been designed by me based on my understanding of Money Laundering Process for 760 class. It has no similarity with any Bank’s actual processes. If the similarity be found, it is merely coincidental. Source: (Text) Presentation on Briefing on ‘KYC’ Norms and ‘AML’ Measures for IBA Member Banks by Sanjeev Singh, Additional Director, FIU-IND, Financial Intelligence Unit-India Manual Customer Transaction Report Summary of Cash Transaction Reports Cash Transaction Report Annexure A- Individual Detail Sheet Annexure B- Legal Person/Entity Detail Sheet Manual STR ( Suspicious Transaction Report) Suspicious Transaction Report Annexure A- Individual Detail Sheet Annexure B- Legal Person/Entity Detail Sheet Annexure C- Account Detail Sheet
Picture 1: http://www.cartoonstock.com/lowres/hsc3590l.jpg Picture 2: http://www.cartoonstock.com/lowres/vsh0492l.jpg Many paper reports were being printed each day with hardly anybody was reading them. The programs that produce reports were hard-coded; once report was generated, the user can not ask for more information ie fields in excel sheets or manipulate the excel sheet reports to fit their needs and the client’s inquiries about their product. Thus, UBS business end user was unable to provide all the relevant information required by the client at one go leading to loss of time, energy and employee’s work load each day. Most printed reports had a lag of one day or more plus wastage of paper, manpower and cost of distribution. Additional work force had to be allocated to ensure that Excel worksheets are getting faxed to right people and the right people are getting them because all these reports had client’s Social Security number’s or Tax id and personal information. Any pilferage of client’s information could mean breach of privacy of client’s data and that could land UBS in big soup. Organisation in above situation had Information. But, what was lacking is organized and analysed data.
Source: www.baft.org/content_folders/2nd%20European%20Bank-to-Bank%20Forum/andrew_clark. ppt Need of the hour: Change in approach need of the hour. From Reactive to Pro-active approach needed to save bank from any fines, penalties in future. A superior approach to risk management and anti-money laundering (AML) is mandatory – one that 1. Delivers not only the accuracy and comprehensiveness to fight criminals 2. Meet compliance regulations 3. Also bottom-line savings and business process efficiency.
Pic 1: http://www.timespub.tc/fileadmin/user_upload/business/Summer2006/TCI-Bank-Lobby.jpg Pic 2: http://msnbcmedia3.msn.com/i/msnbc/Components/Photos/061130/061130_atm_hmed_12p.jpg Pic 3: http://www.appliedcorp.com/_images/flash_holder.jpg Pic 4: http://www.synergysolutionsinc.com/include/images/nyCallCenterInside.jpg More work is done Online using Internet, Intranet. Consequently, Business gets more workforce experienced in IT and use Business Intelligence tools of IT.
To- Be: Separate head for Money Laundering was brought in. Person was of level of Director reporting directly to Executive Committee and working in parallel with CIO. Funds are made available more easily, progress is tracked and lot of heat is generated if project misses deadlines, which is inevitability, given that project was in a evolution stage a year back. After initial opposition by various divisions because their data was needed to test run the software, now though opposition exists but is declining with initial successes of the project.
** Photos have been taken from Google, but the concept and Process are created by me. The process has been designed by me based on my understanding of Money Laundering Process for 760 class. It has no similarity with any Bank’s actual processes. If the similarity be found, it is merely coincidental. Source: (Text) Presentation on Briefing on ‘KYC’ Norms and ‘AML’ Measures for IBA Member Banks by Sanjeev Singh, Additional Director, FIU-IND, Financial Intelligence Unit-India Manual Customer Transaction Report Summary of Cash Transaction Reports Cash Transaction Report Annexure A- Individual Detail Sheet Annexure B- Legal Person/Entity Detail Sheet Manual STR ( Suspicious Transaction Report) Suspicious Transaction Report Annexure A- Individual Detail Sheet Annexure B- Legal Person/Entity Detail Sheet Annexure C- Account Detail Sheet
Only pictures copied from Images in Google, rest concept and diagram drawn using MS Power point are my own creation. Change in approach has its direct bearing on the way of governance of Bank’s traditional processes. They too require a change To be able to meet Proactive risk management approach of the bank. Change process – Transactions, Exchange of financial services and products need to change from merely Information gathering and building A elephant of Information to Intelligence gathering. For the same, Integration of the process, of the system is a pre-requisite.
Only pictures copied from Images in Google, rest concept and diagram drawn using MS Power point are my own creation. Change process – Transactions, Exchange of financial services and products need to change from merely Information gathering and building A elephant of Information to Intelligence gathering. This makes for Centralised Intelligence gathering system which in turn helps the bank develop Financial Intelligence needed about Each and every of its customer as well as each and every transaction made by the Bank’s customer or corresponding bank’s customer. For the same, Integration of the process, of the system is a pre-requisite.
Hierarchy based org Structure : As is to Services, Product line based org Structure: To Be Hierarchy decreases and collaborative work gain more prominence because work load is higher and problem is more complex requiring feedback across the various divisions of the organisation.. Office boy transferring files, doing faxes to Internet & Intranet connection to transfer file, paper thereby reducing manual work and increasing work done on Internet & Intranet.
Only pictures copied from Images in Google. Profile of Human resource worker within the organisation professional changes from Paper based worker to more IT savvy worker, Networking of computer savvy professional.
In all AsIs-ToBe you must explain the changes require to get from where you are to where you need to be. Changes that take place must be fully expanded upon in your notes. Highlight the changes in color. Relate to your topic
** Photos have been taken from Google, but the concept and Process are created by me. The process has been designed by me based on my understanding of Money Laundering Process for 760 class. It has no similarity with any Bank’s actual processes. If the similarity be found, it is merely coincidental. Source: (Text) Presentation on Briefing on ‘KYC’ Norms and ‘AML’ Measures for IBA Member Banks by Sanjeev Singh, Additional Director, FIU-IND, Financial Intelligence Unit-India Manual Customer Transaction Report Summary of Cash Transaction Reports Cash Transaction Report Manual STR ( Suspicious Transaction Report) Suspicious Transaction Report
Only pictures copied from Images in Google.
Only pictures copied from Images in Google. Online Customer Transaction Report Summary of Cash Transaction Reports Cash Transaction Report Online STR ( Suspicious Transaction Report) Suspicious Transaction Report
** Only graph of slide taken from IIT Professor S.Seshadari’s slide, inputs and details are my own understanding of working of bank. ***Names of various divisions might not be actual and are done to illustrate view point. Since, all the information is bounded by privacy laws, I am making a general view point of divisions that might exists in any Investment bank. If above division are divisions in UBS, it is coincidental and no Private information of bank is disclosed. Online Customer Transaction Report Summary of Cash Transaction Reports Cash Transaction Report Online STR ( Suspicious Transaction Report) Suspicious Transaction Report Unlike the past where company’s data was distributed / locked in various databases, with data warehouse technology integration of data is taking place, standardization of data is becoming a norm, data access is instant and easily distributed and in long run organization will be able to better analysis of its performance. 1. Used to manage and control business 2. Data is historical or point-in-time 3. Optimized for inquiry rather than update 4. Use of the system is loosely defined and can be ad-hoc 5. Used by managers and end-users to understand the business and make judgment.
Only pictures copied from Images in Google from a NYSE website, exact web id I do not remember.
From Separate divisions working separately within UBS to Centralisation of UBS Separate Entities ( As Is) Centralisation ( To Be)
Source: www.swift.com/index.cfm?item_id=3878 Bank not only has to take of care of transactions held in the bank but also the transactions the bank has with Corresponding banks and financial institutions. That cannot happen when bank’s different division, say, Asset Management interacts with Corresponding bank’s Asset management division. For Anti Money Laundering activities, Integration of Bank’s different division is must. This would enable a central agency, single point of contact, with external world, be it any financial institution or regalator. This way bank would be able to monitor bank’s external transactions.
** Only graph of slide taken from IIT Professor S.Seshadari’s slide, inputs and details are my own understanding of working of bank.
** Only graph of slide taken from IIT Professor S.Seshadari’s slide, inputs and details are my own understanding of working of bank. Task before the IT Team in line with Business requirements is to integrate the 7-9 Business divisions of the company. And, to convert all the processes, manual, paper based form of business, semi-automated, automated, all into one Online system. System already existed for the seven systems. Hence, the tasks before Information Technology team is not that of re-inventing the wheel, but only to re-engineer the existing system.
** Only graph of slide taken from IIT Professor S.Seshadari’s slide, inputs and details are my own understanding of working of bank. This provides an example of a comprehensive data warehousing architecture. It illustrates the large number of possible source systems, ETL processes, sample products, the data warehouse, dependent data marts, meta data, data access tools and applications, and various kinds of users. Inmon calls a comprehensive architecture like this one a Corporate Information Factory.
Concept: Fortent software training material But, diagram and changes are based on my understanding of Money Laundering systems. As mentioned a Pre requisite of Intelligence about the Customer and their transactions is Integration of various divisions of the bank. Once that is done, then comes integration of Profile generation per customer and per customer transaction.
** Only graph of slide taken from IIT Professor S.Seshadari’s slide, inputs and details are my own understanding of working of Delta case. Details notes are attached in respective slides points. This is only an index slides and so does not have notes.
*** Above Pictures copied from Images in Google
Alter route structure
Source: www.ubs.com Based on personal interviews at Morgan Stanley, UBS, Bank of America.
Images from google: Hierarchy based org Structure : As is to Services, Product line based org Structure: To Be Hierarchy decreases and collaborative work gain more prominence because work load is higher and problem is more complex requiring feedback across the various divisions of the organisation.. Office boy transferring files, doing faxes to Internet & Intranet connection to transfer file, paper thereby reducing manual work and increasing work done on Internet & Intranet.
Only pictures copied from Images in Google, rest concept and diagram drawn using MS Power point are my own creation. Change process – Transactions, Exchange of financial services and products need to change from merely Information gathering and building A elephant of Information to Intelligence gathering. This makes for Centralised Intelligence gathering system which in turn helps the bank develop Financial Intelligence needed about Each and every of its customer as well as each and every transaction made by the Bank’s customer or corresponding bank’s customer. For the same, Integration of the process, of the system is a pre-requisite.
Source: Based on my work experience and HR interviews at consulting firms & www.ubs.com,
Source: www.baft.org/content_folders/2nd%20European%20Bank-to-Bank%20Forum/andrew_clark. ppt Need of the hour: Change in approach need of the hour. From Reactive to Pro-active approach needed to save bank from any fines, penalties in future. A superior approach to risk management and anti-money laundering (AML) is mandatory – one that 1. Delivers not only the accuracy and comprehensiveness to fight criminals 2. Meet compliance regulations 3. Also bottom-line savings and business process efficiency.
Source: www.swift.com/index.cfm?item_id=3878 Bank not only has to take of care of transactions held in the bank but also the transactions the bank has with Corresponding banks and financial institutions. That cannot happen when bank’s different division, say, Asset Management interacts with Corresponding bank’s Asset management division. For Anti Money Laundering activities, Integration of Bank’s different division is must. This would enable a central agency, single point of contact, with external world, be it any financial institution or regalator. This way bank would be able to monitor bank’s external transactions.
Images from google: Hierarchy based org Structure : As is to Services, Product line based org Structure: To Be Hierarchy decreases and collaborative work gain more prominence because work load is higher and problem is more complex requiring feedback across the various divisions of the organisation.. Office boy transferring files, doing faxes to Internet & Intranet connection to transfer file, paper thereby reducing manual work and increasing work done on Internet & Intranet.
![2001: Enactment of Patriot Act & impact on Money Laundering Compliance ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source: http://www.nchelp.org/elibrary/Presentations/2003/2003WinterLegalAffairsMeeting/Consumer%20Privacy%20Issues.ppt](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)