Perspectives
Suspicious activity reports and analytics
Smarter continuous monitoring
For years banks and other financial institutions have operated sophisticated systems for monitoring, investigating, and reporting suspected money laundering/terrorist financing (AML/TF) transactions. In compliance with a number of US regulations under the Bank Secrecy Act of 1970 (BSA), the USA PATRIOT Act of 2002, and other US laws, these systems sift through significant amounts of data and, as a result, flag many transactions that require investigation as possible suspicious activities. This paper suggests that financial institutions should use analytics to improve those systems, which can result in more efficient, effective, and insightful operations.
While regulatory scrutiny historically has focused on manufacturers’ commercialization activities, recent trends suggest that research and development (R&D) activities also have come to the attention of regulators.
SARs and Analytics
Institutions can benefit from taking steps to structure their data-gathering–ideally as part of their business-as-usual procedures–so analytics can be readily applied to SAR databases. Collecting the data in a structured manner allows analytics to become an integral part of ongoing compliance operations–not simply a snapshot of a system state at a certain point in time, but a perpetual process of mining the data and providing feedback on the system’s rate of success and failure.
