Data Analytics... Banking on it

Short takes... on analytics

Abstract of a blog by Donald Monson, Senior Manager, Deloitte Financial Advisory Services LLP and Sara Vandermark, Senior Manager, Deloitte Financial Advisory Services LLP

With increased scrutiny by various Federal groups, remaining in compliance is becoming increasingly difficult and at the same time, ever more important. Billions of dollars in fines related to anti-money laundering (AML), fraud, and LIBOR manipulation are sending a message that banks face stiff penalties and incalculable damage to their reputations as a result of non-compliance. Growing challenges in AML and terrorist financing have led to an emergence of more advanced analyses and reporting methods to help uncover and report suspected suspicious activities.

Today’s AML systems are good at sifting through significant amounts of data and flagging transactions for investigation. The objective is to move from being reactive to proactive; from looking at what may be suspicious to predicting, knowing, and mitigating fraud and risk before it proliferates. To do this, banks need analytics for more informed decision-making and to promote better insight into unusual or suspicious activity. While financial executives may believe their transaction monitoring systems are performing satisfactorily, feedback from analytics may quantify just how effective existing processes are and uncover possible avenues for improvement. The time to be proactive is now; later may not offer many options beyond paying stiff fines.

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