complying with regulation as a community, bella lai, swift
TRANSCRIPT
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SWIFT Financial Crime compliance initiatives
Bella Lai
Compliance Market, SWIFT Asia Pacific
July 2014
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2SWIFT_Compliance_services_April_2014
• SWIFT Compliance Services Roadmap• SWIFT Sanctions Screening• SWIFT Sanctions Testing• SWIFT Compliance Analytics• SWIFT KYC Registry
Agenda
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Financial Crime Compliance Roadmap
Sanctions KYC AML
Processingservices
Traffic analysis
Standards
Data repositories
KYC registry
Sanctions list Management service
AML testing & tuning
Compliance Analytics
Sanctions Screening
Sanctions Testing & tuning(transaction & client systems)
Traffic restriction (RMA)
LiveDevelopmentQualificationExploration
QualityAssurance
FATF 16 Information quality
Client/Name screening
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More on SWIFT Sanctions Screening
service
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Your institution
• Best-in-class Screening engine & user interface• Centrally hosted and operated by SWIFT• No local software installation & integration• Real-time screening of FIN messages• Sanctions List update service
Sanctions Screening service
Your correspondents
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Sanctions Screening - headlines
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Advantages:- Conversion capabilities (adapts to any format)- Minimal impact: No additional footprint, easy to implement, no additional maintenance, etc.- Inherits integration capabilities of Alliance Access (MQ, FTA, etc.)- Re-use of SWIFTNet infrastructure (security, resilience, ….)
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SanctionsFilter
Screening of Any Format – Connector in Alliance Access
Back Office
Interface
Alliance Access
Payment to be screened
“Good” payment
“Rejected” paymentSanctions
Connector
SWIFT
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More on SWIFT Sanctions Testing
service
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Effectiveness
• Provide assurance that your filter works
• Measure system’s fuzzy matching performance
• Assess coverage of sanctions lists
• Align screening system to your risk appetite
Efficiency
• Reduce false positives through iterative testing
• Build optimisation tests into your processes
• Understand parameter changes• Manage and tune rules and “good-
guy” lists
Testing Meeting regulatory demands
Tuning Managing cost and resources
Sanctions compliance – balancing priorities
with
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Formats
Settings
Lists
Automate • Repeat • Compare • Monitor
Sanctions Testing processDefinetest objective
Downloadtest files
Processtest files
Uploadhit results
Viewtest results
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More on Compliance Analytics
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13Compliance Analytics – 2014 – Confidentiality: Public
Leverage SWIFT traffic data to address risk
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14Compliance Analytics – 2014 – Confidentiality: Public
• Enterprise risk assessment
• Correspondent risk assessment
• Alignment with risk policies
Risk Assessment
• Compare anticipatory behaviour against country standards
• Periodic reviews to ensure activity is in line with anticipated risk
• Event driven reviews
• Retrospective reviews
Customer Due Diligence
• FIU investigations• Country visits • Correspondent reviews
Investigations and visits
Transaction monitoring
• Pre-calculated metrics
• Key Performance / Risk Indicators
Metrics and dashboarding
• Volume reconciliation
• Scenario optimisation
• System tuning
Compliance Analytics will bring value to…
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Compliance Analytics – 2014 – Confidentiality: Public 15
Monitor hidden payment flows & nested activityIdentify countries of origin and destination, and which institutions are involved
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More on SWIFT KYC Registry initiative
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The ContextAn unprecedented challenge to comply with KYC legal requirements
SWIFT KYC
Registry
Complex and inconsistent requirements across jurisdictions
Cumbersome, repetitive and inefficient bilateral exchanges
Unavailability and poor quality of information
Complex and inconsistent requirements across jurisdictions
Cumbersome, repetitive and inefficient bilateral exchanges
Unavailability and poor quality of information
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18SWIFT_Compliance_services_April_2014
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SWIFT ProfileA new way to bring more transparency on your correspondents’ activities
• Objective and factual, initially based on FIN traffic• Helps validate declared behaviour• Substantiates risk rating process• Different levels of granularity up to the level of
nested correspondents• Optional and shared at bank’s discretion• Specific, transparent and unambiguous• Does not contain competitive information
SW
IFT
Pro
file
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Thank you