maximizing your bang for the buck - transactional limits in aml
TRANSCRIPT
Copyright © 2015 BAE Systems. All Rights Reserved.BAE Systems is a trade mark of BAE Systems plc 1
MAXIMIZING YOUR BANG FOR BUCK – THE ART OF ESTABLISHING TRANSACTION LIMITS
GINA J LOWDERMILKSENIOR BUSINESS SOLUTIONS CONSULTANT
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ABOUT THE PRESENTERS
GINA LOWDERMILKSENIOR BUSINESS SOLUTIONS CONSULTANT
BAE SYSTEMS APPLIED INTELLIGENCE
JEFF SKLARMANAGING DIRECTOR
SHC CONSULTING
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AGENDA
Why ‘Appropriate’
Transactional Limits Are Important
What To Do
If You Don’t Have Them
What You Can Do
to Ensure they are Appropriate
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Why ‘Appropriate’
Transactional Limits Are Important
What To Do
If You Don’t Have Them
What You Can Do
to Ensure they are Appropriate
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Limits are the foundation for AML Transaction Monitoring
They trigger alerts for suspicious activity
They establish transaction patterns of customers
They are used for the development of risk profiles
The Limit information is used for Reporting(e.g. SAR Reporting, Board Reporting, Senior Management Reporting)
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Large # of false positives
Alerts are inadequate for your organization
Inaccurate risk profiles
Potential activity being missed
Activity not being investigated properly
Suspicious activity not identified and reported timely
Increased time and resources needed to investigate large number of false positives
Insufficient resources or limited time for alert investigations
Are You Seeing this?
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Why ‘Appropriate’
Transactional Limits Are Important
What To Do
If You Don’t Have Them
What You Can Do
to Ensure they are Appropriate
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TOO MANY FALSE POSITIVES
INCREASE IN # OF ALERTS GENERATED
RISK PROFILES INACCURATE
TRANSACTION PATTERNS INAPPROPRIATE
LIMITS ARE APPLICABLE TO BUSINESS
ALERTS & HITS
ALERTS NOT RELEVANT
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SUSPICIOUS ACTIVITY MISSED
TIME SPENT INVESTIGATING ACTIVITY NOT SUSPICIOUS BUT IS APPROPRIATE
UNTIMELY SAR REPORTING = AML VIOLATION
INCREASED RISK EXPOSURE TO MONEY LAUNDERING AND
OTHER FINANCIAL CRIMES
INVESTIGATIONS NOT COMPLETED PROPERLY
SUSPICIOUS ACTIVITY NOT REPORTED TIMELY
SUSPICIOUS ACTIVITY
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ADDITIONAL TIME NEEDED TO INVESTIGATE ALL ALERTS
ADDITIONAL RESOURCES NEEDED FOR SAME
MORE RESOURCES = INCREASED MANPOWER COSTS
INCREASED TIME ON INVESTIGATION = DECREASED
TIME ON OTHER PROJECTS
INSUFFICIENT TIME OR RESOURCES = INADEQUATE INVESTIGATIONS
TIME & RESOURCES
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Why ‘Appropriate’
Transactional Limits Are Important
What To Do
If You Don’t Have Them
What You Can Do
to Ensure they are Appropriate
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WHEN is the last time you reviewed your limits? have you ever made any revisions?
do you review your limits? were your transactional limits originally
established? HOW
WHO originally established your limits?
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WHAT
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CURRENT LIMITS
• Evaluate current limits
• Evaluate number of alerts being generated by the current limits
• Number of suspicious activities being reported and investigated
HISTORICAL DATA
• Be familiar with your organization’s historical data• What is typical for your
customer base?• What businesses do you
typically do business with?• What is common with your
organization v. industry trends?
REVISIONS
• Revise transaction limits in accordance to:• Industry limits• Specifications to your
organization• Historical data• Industry trends• Current financial crime data
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APPROPRIATE TRANSACTIONAL
LIMITS
More effective transaction monitoring Accurate transaction patterns Appropriate risk profiles Suspicious activity identified timely
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APPROPRIATE TRANSACTIONAL
LIMITS
More effective transaction monitoring Accurate transaction patterns Appropriate risk profiles Suspicious activity identified timely
Timely Reporting Compliant with AML rules Prevention of financial
crimes Reduce costs for
additional resources Effective use of resources
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Stay Out of The Headlines
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Ensure monitoring of transactional limits is part of your overall AML monitoring program
Stay current with industry trends in financial crimes
Understand your transaction data
Routinely review the transactional limits and revise appropriately
Ensure sufficient time and resources are provided for monitoring transactional limits and conducting investigations
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SUMMARY
Appropriate transactional limits
are critical for AML compliance
Inappropriate transactional limits
can result in AML violations
Appropriate transactional limits
can decrease costs
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THANK YOU.© BAE Systems 2014, unpublished, copyright BAE Systems all rights reserved.
Proprietary: no use, disclosure or reproduction without the written permission of BAE Systems plc.
More Information:[email protected]@baesystems.comBAESystems.com/FinancialCrime