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How to Improve Anti-Money Laundering Investigation using Neo4j

Joe Depeau, Neo4j

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How to Improve Anti-Money Laundering Investigation using Neo4j

  1. 1. How to Improve Anti-Money Laundering Investigation using Neo4j Joe Depeau Sr. Presales Consultant, UK 6th December, 2018 @joedepeau
  2. 2. • What is Money Laundering? • Anti-Money Laundering regulations • Typical problems with Anti-Money Laundering processes • How Neo4j can help with Anti-Money Laundering • Demo • Q & A 2 Agenda
  3. 3. What is Money Laundering? 3
  4. 4. 4 LOL! But seriously …
  5. 5. 5 What is Money Laundering? “Money laundering is the act of concealing the transformation of profits from illegal activities and corruption into ostensibly ‘legitimate’ assets. One problem of criminal activities is accounting for the proceeds without raising the suspicion of law enforcement agencies. Considerable time and effort may be put into strategies which enable the safe use of those proceeds without raising unwanted suspicion. Implementing such strategies is generally called money laundering. After money has been suitably laundered or ‘cleaned’, it can be used in the mainstream economy for accumulation of wealth, such as by acquisitions of properties or legitimate businesses, or simply spent.” Source: Wikipedia, 27th November 2018
  6. 6. 6 Who needs to launder money? • Terrorists • Embezzlers • Drug cartels • Fraudsters • Illegal gamblers • Thieves • Tax evaders • Corrupt officials • Human traffickers • Criminal gangs Anyone who wants to “clean” their illegally obtained profits so they can be used in the legitimate economy without raising suspicion • Smugglers • Blackmailers • Counterfeiters • Illegal arms dealers • Sanctioned individuals
  7. 7. Anti-Money Laundering Regulations 7
  8. 8. 8 Examples of AML laws and regulations United Nations Convention Against Transnational Organized Crime (UNTOC) The Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations 2017 United Nations Convention Against Corruption (UNCAC) The Bank Secrecy Act (BSA) EU Directive 2015 (Fourth EU Money Laundering Directive) United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances Financial Action Task Force (FATF) Recommendations
  9. 9. 9 The penalties are serious Source: Source:
  10. 10. 10 Pillars of AML AML Policies and Processes Know Your Customer (KYC) Due Diligence (CDD / EDD) Risk Evaluation Transaction Monitoring Reporting and Compliance Supervision and Monitoring
  11. 11. Typical Problems with Anti-Money Laundering processes 11
  12. 12. 12 “Don’t consider traditional technology adequate to keep up with criminal trends” Market Guide for Online Fraud Detection, April 27, 2015
  13. 13. 13 INVESTIGATE INVESTIGATE Normal behavior AML with Discrete Analysis Transaction Volume TransactionValue
  14. 14. 14 AML with Discrete Analysis • High number of false positives • Poor data quality can hinder investigations • Harder to spot suspicious patterns of behavior • Identifying money laundering rings is more difficult • Developing a complete view of complex data across silos is a major challenge • Easier to avoid detection
  15. 15. 15 Normal behavior AML with Connected Analysis Transaction Volume TransactionValue Fraudulent pattern
  16. 16. 16 AML with Connected Analysis • Fewer false positives • Use full data context instead of discrete data points • Entity Resolution using patterns helps manage data quality issues • Easier to spot suspicious patterns of behavior • Identify money laundering rings quickly and more easily • Develop a complete view of complex data across silos using the graph • Harder to avoid detection
  17. 17. How Neo4j can help with Anti-Money Laundering 17
  18. 18. 18
  19. 19. Blank Slide 19
  20. 20. Demo 20
  21. 21. Q & A 21