Win the fight on fraud
The growing threat of fraud and continued regulatory complexity around know your customer
controls present financial institutions with new challenges. Today, financial crime management and
cost controls are top priorities for risk and compliance professionals. EastNets has recognised
their need with effective and efficient solutions that uniquely bridge the compliance and fraud gap,
as group director, channels Freddy Nurski explains to Jim Banks.
 The banking industry is taking action
to limit the potential for fraud
and money laundering, not least
because of the pressure being applied by
regulators. These efforts require technology
and processes to evolve rapidly, at a time
when the sector is changing shape through
consolidation and overcoming the effects of
the financial crisis.
Whatever market pressure banks face,
regulations such as the EU’s Third Money
Laundering Directive cannot be ignored.
The directive, laid down in 2005, focuses on
preventing the use of the financial system
for the purpose of money laundering
and terrorist financing. It requires the
use of anti-money laundering capabilities
in the verification of customers’ identity
and record keeping, as well as defining
additional requirements and safeguards for
situations of higher risk, such as trading with
correspondent banks outside the EU.
‘The most important effect of the directive
is that banks have to know their customers
better than ever before,’ says Freddy Nurski,
group director, channels, EastNets. ‘This is
driven not only by the legislation but also by
the globalisation of the economy, which is
now a reality for banks. They need to work
on knowing their customers on a day-to-day
basis with a risk-based approach.
‘They need to build in checks from
the on-boarding stage right through to
the transactional stage. Banks need to
enhance their due diligence over customers’
behaviour and to do that they need a flexible
and configurable solution.’
The core of EastNets’ business is to help
financial institutions control risk, cost and
complexity more efficiently and effectively with its portfolio of best-in-class solutions.
A SWIFT regional partner, the company has
strategic global alliances to offer value-added
payment solutions, and develops enterprise
compliance management solutions to
combat money laundering and fraud.
EastNets also operates a well-established
outsourcing service for payment solutions
and services.
With 25 years experience behind it,
EastNets understands the problems banks
face in tackling fraud and money laundering,
among the most important of which is the
challenge of sifting through an enormous
amount of data from different sources to
spot suspicious behaviour.
‘Our systems build on existing processes
and add new capabilities for profiling
customers and filtering data to allow banks
to go deeper in their identification and
transaction monitoring. You can spend a lot
of time looking at all the data you have, or
you can truly leverage the data to ensure
the right data gets to the right person at the
right time. Processes need to be optimised
to meet enterprise needs and risks – as
these processes are much more business
critical now,’ remarks Nurski.
Solutions and safeguards
EastNets offers a suite of integrated
solutions forming EastNets’ enterprise
compliance management framework,
delivering to its customers a single,
integrated environment to meet regulatory
compliance, improve risk protection, and
help banks to more effectively identify
customers and monitor their activity. Its
en.SafeWatch Filtering solution, used
today by over 350 financial institutions,
provides list filtering for a variety of
watch lists including OFAC, with real-time detections and the ability to stop
suspicious transactions before they are
completed. It streamlines the checking
process in straight through processing
with real-time integration to back office
systems, and provides auditing and
reporting tools through a user-friendly
graphical user interface. Input comes
from data connectors that are written to
capture data from specific applications and
in chosen formats.
The en.SafeWatch Profiling solution is
an easy to use, configurable and flexible
web-based behavioural and transaction
profiling anti-money laundering solution
built on the open architecture that
characterises all EastNets products. It
is based on standard databases and
platforms, and can integrate with any
banking application. It includes the
Detection Analyzer module, which
manages all detections of suspicious
transactions with a sophisticated detection
engine designed to reduce false positives,
allowing compliance officers to quickly
review all alerts.
Finally, en.SafeWatch Fraud is a realtime
prevention and management solution
for online, AT M, wire and credit card
fraud. The solution, like en.SafeWatch
Filtering and Profiling, is SWIFT ready and
monitors multiple sources across several
channels and jurisdictions. Through the
SWIFT Alliance Connector, the EastNets
platform integrates with a bank’s existing
SWIFT environment, ensuring that fraud
monitoring of incoming and outgoing
SWIFT messages happens in real time to
prevent suspicious messages entering the
SWIFT network.
The enterprise compliance management
framework, which includes a common
platform for anti-fraud and anti-money
laundering capabilities, also features Know
Your Customer controls, advanced workflow
capability, case management, regulatory and
management reporting, risk assessment
functionality, and full audit capture.
‘To effectively prevent fraud losses and
manage regulatory risk and controls, a
common integrated platform is optimal
as well as a scalable solution that can
handle the high volume of data, explains
Nurski. A financial institution today can
know their customer better and catch
more fraudulent activity with an integrated
environment that bridges the compliance
and financial crime gap.’
‘Our solution captures data in realtime,
so banks can respond quickly to
any aler ts. Real-time capability is vital
to catch and block fraudulent activity.,’
comments Nurski.
‘Our fraud detection capability, for
example, combines filtering and profiling
on one platform. Using the platform
approach has many benefits, including
the elimination of unnecessary workflow
for compliance analysts by reducing the
number of false positives. We also provide
an excellent detection system with
advanced algorithms, and we can integrate
with a bank’s existing applications, which
can remain smooth and seamless and not
impact the production environment.’
‘Financial institutions should strive to
combine silos for compliance and fraud
prevention, and leverage and access
customer data stored in many places
throughout the complex internal enterprise
within a financial institution. Systems must
interface in a flexible way with all of the
dispersed data. EastNets takes on that
complexity and data challenge.’
Flexible for the future
The high level of configurability is vital for
banks, particularly if they are changing their
structure through a merger or acquisition.
The tools for fighting fraud and money
laundering must grow and adapt to the
shape of the bank. With EastNets solutions,
financial institutions can set their own
parameters in order to ensure the solution
reflects the operations of its own internal
systems and its business model.
‘Banks are still consolidating, so it is
important that our systems are scalable.
They can expand quickly to add new data
sources,’ Nurski notes.
Similarly, such systems must be
sufficiently flexible to incorporate future
changes in legislation. After all, regulations
rarely become softer over time.
‘Regulations will always move on.
In the last six months, regulators and
governments have put very strict
requirements on banks, and this process is
likely to continue,’ he adds.
The ability of EastNets to deliver such
adaptable technology comes not only from
its expertise on the software side, but also
from the knowledge and understanding of its
customers regarding the challenges they face.
‘The market needs a diversity of
expertise to develop effective solutions,
and we have that in our company. But we
also must be able to optimise the solution
to address the specific needs of our
customers,’ Nurski believes.
‘EastNets brings together the necessary
expertise in integration, payments financial
crime, and compliance, all of which are
important to the development of a
successful solution.’
Nurski is well aware that cost controls
and return on investment are important.
‘EastNets solutions are designed to adapt
as requirements change without extensive
consulting fees to make optimisations.
With EastNets’ solutions, financial
institutions can easily make changes inhouse
with minimum disruption or cost
because it is a highly configurable system.
‘We see banks becoming increasingly
confronted with evolving regulations
and potentially high maintenance costs
if they want to keep up. That is why
they are looking for systems that can
aggregate data and processes across
anti-money laundering and fraud systems
and silos to improve risk protection, meet
global regulatory demands, streamline
operational efficiencies and reduce fraud
losses for significant costs savings. That is
where we can deliver significant value to
our customers.’ |
