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Fraud, scams, money laundering.

One would assume that in today’s digital age where traceability seems like a given, these types of financial crimes would have been eradicated. However, they persist and, alarmingly, thrive. The UN reports that money laundering alone amounts to nearly 5% of the global GDP, costing trillions annually, with no sign of abating. Many cases remain unresolved or unnoticed.

Financial Institutions (FIs) face a daunting challenge. They must not only thwart these crimes to safeguard their customers’ trust and their own reputation but also navigate increasingly stringent regulatory requirements.

Meanwhile, global fines for non-compliance have surged, reaching almost USD $5 billion in 2022 alone and totalling nearly USD $55 billion since 2008. Meeting these escalating demands becomes even more complex given the mounting cost pressures and outdated systems that struggle to handle the overwhelming volume of daily transactions and connections.

According to Ahmed Drissi, Industry Principal Consultant for AML at SAS Global, there is a noticeable gap in maturity within this domain. While long-serving banks, seasoned with 20-30 years of compliance experience, might exhibit better comprehension, newer entrants like digital startups, insurance or e-wallet companies often struggle due to a lack of resources and capabilities to meet local regulations.

Despite the pivotal role of Know-Your-Customer (KYC) screening and Anti-Money Laundering (AML) monitoring as crucial controls to thwart financial crime, their effectiveness and efficiency persist as challenges. This is exacerbated by the reliance on outdated controls in financial crime operations, notably manual, rules-based transaction monitoring systems that are tedious and generate excessive false positives.

The thing about false positives, according to Ahmed, is that they tend to overwhelm investigative resources, divert attention from genuine threats, and inflate operational costs, impeding banks’ ability to effectively combat financial crime.

Hence, besides reducing false positives, which will greatly enable financial institutions to allocate more resources effectively, Ahmed named a few notable challenges that financial institutions have to urgently address, such as:

• Lowering the rising cost of compliance.
• Improving operational efficiency by automating traditionally manual KYC, AML and fraud detection tasks.
• Modernising and implementing cutting-edge technology because legacy systems simply can’t keep up with modern financial crime activities and changing business landscapes.

Ahmed explained that as criminals become more sophisticated, financial institutions need to adopt an innovative, multi-layered approach to combating financial crime. SAS offers precisely these capabilities, empowering FIs to combat money laundering and terrorist financing through Artificial Intelligence (AI), Machine Learning (ML), intelligent automation, and advanced network visualisation.

Notably, he added that SAS stands apart from emerging fintechs and upstarts with its extensive decades-long history, pedigree, domain expertise, and a team of qualified professionals from relevant backgrounds, combining expert guidance with technology to assist FIs in staying ahead of emerging threats and changing financial crime patterns.

Best of all, FIs need not overhaul their entire systems since SAS’ compliance analytics solution, rooted in SAS Viya, seamlessly integrates with their existing solutions, across fraud, AML, credit risk, and more.

The huge benefit of having a unified platform like SAS is that it enables a singular data flow, offering a comprehensive view of customer profiles and activities across various solutions, as well as fostering enhanced information sharing and convergence from both technical and business perspectives.

What do all these result in?

Vastly reduced false positives, earlier financial crime detection, holistic view of financial crime risk, lower compliance costs, optimised resource utilisation, and efficient time to value without ripping and replacing existing systems.

Whether you’re with a well-established bank with decades of experience or a burgeoning financial tech startup, SAS provides tailored solutions to meet your unique needs, empowering your organisation to effectively navigate evolving risks and maintain regulatory compliance.

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