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How to reduce AML false positives?

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How to reduce AML false positives?

By Alexon Bell, Chief Product Officer (Anti-Money Laundering) at Quantexa. 

Research undertaken by the United Nations Office on Drugs and Crime has estimated that between $800 billion and $2 trillion is laundered through the global financial system annually, accounting for between two and five percent of the world’s GDP.

The UK is a global centre for finance, and its open regulatory environment means that there is very little limitation on creating a company. However, these same characteristics which make it appealing to entrepreneurs, also make it a target for criminals, with the National Crime Agency suggesting that the impact of money laundering in the UK “is in the hundreds of billions of pounds”.

With the regulators placing an increased focus on ‘gatekeepers’ to do more to prevent money laundering, compliance departments have seen their numbers and budgets swell. More than £1.5 trillion is now spent on compliance globally, with much of this being invested in the human capital needed to investigate the outputs of ineffective technology. With contemporary Transaction Monitoring Systems (TMS) requiring high levels of manual processing, and operating at false positive rates of 95-99%, the inefficiencies are clear to see.

To better identify criminal actors precisely and effectively, firms must invest in cutting edge technologies to better arm them in the fight against financial crime.

Historical approaches to Anti-Financial Crime

The TMS used by financial institutions look at standard deviations, anomalies and red flag typologies. This was a suitable approach for the previous AML regime, but is now inappropriate in today’s society.

These rules-based red flag typologies – based on the knowledge of experts – determine whether a transaction is suspicious. However, these indicators have now become common knowledge, and as such has enabled criminals to change their behavior in order to prevent their activity from raising suspicion. For example, a money launderer might split up a larger transaction into several smaller ones to obscure its true size, thus avoiding the raising of alarm. This resulted in high volumes of false positives, with the TMS taking a brute force approach focusing on covering as many transactions as possible, rather than looking at those most likely to have originated from criminal activity.

These alerts are designed to be overly cautious, as to not leave institutions open to a hefty fine should an instance of money laundering go unnoticed. As a result, millions of alerts will be generated on completely benign transactions. This becomes a major issue when each of these alerts require an investigation. Less than 5% of alerts are escalated to the filing of a Suspicious Activity Report (SAR), with no guarantee it is a case of criminal behaviour, revealing the inherent inefficiencies and ineffectiveness of the entire process.

Further complicating the issue, money launderers will often conceal their activities within the behaviours of a legitimate business. The intermixing of criminal capital with legitimate money makes it incredibly difficult to distinguish the former from the latter, allowing launderers to continue their operations unhindered. The most sophisticated criminal organisations have even been known to acquire struggling companies for the sole purpose of leveraging their existing trade networks in the laundering of money.

Most investigators will be able to quickly and efficiently differentiate between nefarious transactions, and those that are legitimate. However, the massive quantity of alerts being generated means that they are often unable to dedicate time to investigating cases that warrant it. The investigative procedure mandates that compliance professionals closely follow every step in the process, meticulously documenting every piece of evidence. This could potentially turn a short check into an hour’s long ordeal.

The ideal solution would be able to combine the knowledge held by human investigators with artificial intelligence software capable of screening millions of transactions at once, using context to process and score the level of risk, freeing up human investigators to focus on the real risk. Unluckily for the criminals, that solution is here in the form of contextual monitoring and contextual decision intelligence.

Why contextual monitoring is changing the way that we combat financial crime.

As opposed to having investigators trawl through external websites and unstructured data to find information on organisations, data can be introduced to a Contextual Decision Intelligence platform, replicating the analytical processes of a real-life investigator. This then frees up investigators to spend more time determining risk, as opposed to data gathering as this process will now be automated.

This intelligence led approach to monitoring also enriches data by linking externally sourced data with that held internally by an organisation. This supplementary data allows the end user to construct contextual networks, enabling a better understanding of relationships and drive better decision making. It will also allow organisations to uncover activity that may have been missed by legacy approaches.

To achieve this, technology needs to emulate the actions of an investigator. Specifically, how they’d confirm an organisations identity by cross referencing transactional data with that held by an external source like Companies House. This is achieved through a process called Entity Resolution.

Compliance professionals will also map out those involved with an organisation, and their connections to each other. This is emulated by technology known as network analytics.

Entity Resolution brings together all the information and data held about a subject, centralizing it into a singular view. Modern consumers will make transactions through a number of differing means, and the corresponding data could be stored in a variety of different fashions by different divisions or organisations. As such, a single individual could appear as multiple entities, creating false positives and disrupting the investigative process. By gathering this data into a single view of the entire network, investigators can further understand who the ultimate beneficiary of a transaction is, allowing them to make better decisions and better arming them to combat money laundering.

Network analytics processes the connections between these entities, providing clearer knowledge of the real-world relationships that underpin financial crime. This saves massive amounts of time and money, as investigators will no longer need to invest resources into cleansing, manual data structuring and the creation of large-scale data lakes. Machine learning can be used to craft a truly transparent view of suspected instances of money laundering, allowing banks to automate the process of validating customer identities. This will provide for the locating of the ultimate beneficiaries at speed, and how entities can be linked with each other.

These advancements can be used to drive better decision making, with vastly improved speed, efficiency and scale. Firms will be able to spot unknown unknowns, minimizing risks, and allowing them to automate scores of operational decisions. The end result of this will be the reduction of false positives, lower costs and a more effective anti-money laundering regime.

Looking Ahead

The fusion of human intelligence with technologies such as entity resolution and network analytics is transforming the way that we combat money laundering. Banks can now effectively balance the cost of compliance with the goal of disrupting financial crime if they use CDI. Additionally, banks will gain a better understanding of their customers and this serves to enhance KYC (Know Your Customer), providing downstream benefits of better risk and opportunity management.

How To

Guest Posting

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Guest Posting 1

The internet has set up brands at every corner of the street and getting people to visit yours is a mix of skill and art. The attempts to layout customer roadmaps to your brand which aren’t abandoned are not new and the struggles are the same as before. In fact, the struggle to have your brand heard has piled up as competition keeps emerging and viewer attention span keeps getting fragmented. This has led to a surge in brands using conventional advertisements to highly compress their message to the audience.

This is not the best gameplan to bet on. Ads are perceived by many as intrusive, insincere and housing an ulterior motive. The audience is bombarded with ads from every angle and making it shorter does not really help. Most people don’t react the same way to guest posting.

A guest post is a piece of brand journalism which lives on a publisher’s website. Sponsored posts are an advertorial piece of long-form writing that is created to be highly engaging. They avoid the intrusive and abrupt conventional-approach of ads and indulge in a more respectful and subtle modern-approach for recommending your services or products.

Choosing the right platforms to publish your guest post is crucial as the platform is seen as your partner and representative. Your chosen platform must balance between writing a blog post and a traditional advertisement, stray away from being intrusive and stick with being subtle and respectful. At Global Banking and Finance (GBAF), we offer the opportunity to bank on our decade-long experience and expertise in writing balanced content like this.

How Can Guest Posts on GBAF Help You?

Constantly investing time and effort into writing and publishing on your blog is great for fostering and strengthening your already existing audience relationship but this doesn’t help you reach a new audience.

Guest posting opportunities on our platform gives you access to an untapped audience base. This is a significant advantage in two ways:

  • Familiarity: We have built our audience through our authentic, thought-provoking and storytelling writing nature. Our audience is familiar and receptive to this writing style. When we adapt your content in the same format, it allows your content to have better reception compared to traditional ads. Also, your content will adapt to the environment of content which makes it feel natural and less abrupt or intrusive.
  • Trust: When a consumer learns about your brand through someone they trust (someone like a renowned brand, friend, some industry authority, etc), they are more likely to trust you, too. Our audience’s trust means a chance for your brand’s voice to be heard. It also means having customers who have completed their journey of brand choice. When they choose you, it will be an additional choice of transition from our platform rather than a new choice of approaching you. They only have to go half-way.

With amplified brand reach and redefined trust, your brand visibility and credibility will be boosted. We also help you boost visibility by leveraging our social media channels which currently have 135k followers and keep growing every day.

Another major area of impact when doing guest posts with GBAF is the focus, delivery and expertise of writing. The audience members will engage with your content much more than they do with your traditional ads. This will increase the chances of convincing the customers who doubt, skepticize and speculate becoming customers of your brand from afar. Writing to deliver your promotion with value-driven content also allows you to plug in a recommendation at a crucial point of the problem with your brand as the solution.

Lastly, value-driven content avoids the intrusive BUY THIS! style of writing. Here, the focus is on communicating your knowledge and therefore allows you to establish yourself as a thought-leader in your niche.

All of these combined benefits act as a catalyst to boost your brand reach, funnel attention to your brand, gain a competitive advantage and knock down all other challenges presented in separating yourself from your competition.

Final Thoughts

Brand adoption is slow. Abandoning an old familiar brand route for a new one is difficult. People rarely reach out to brands and they sprint the other way if they see brands reach out to them through conventional and dull ads. In such a deadlock scenario guest posts can provide the perfect strategy to bet on.

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How To

Why Guest Posting is Your Best Bet

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Why Guest Posting is Your Best Bet 2

In a scenario where new businesses are popping up everyday, one of the major challenges brands face is that of devising an organic and effective way to get the attention of their target audience. And one of the first solutions that comes to mind is the internet and consecutively, digital marketing. Even though its all-pervasive nature has made it both super-easy to reach people across the globe, the internet also comes with its own set of challenges. In this article, we will discuss the tough-to-crack parts of digital marketing, things that almost every brand representative or marketing executive has to face in the present date.

The oversimplification of digital communication has deceived many brands into believing that it’s the only way to reach their audience. However, the reality is hardly so. Today, there are more platforms and media formats than there have ever been before and newer ones keep emerging everyday. As a result, the netizens have developed a rapidly decreasing attention span. As a result, brands are wrestling to fit their message into as tiny a space as possible in what can only be called conventional methods of advertising.

For many brands, digital marketing proves to be an ordeal that takes years to crack, all the while draining the brand’s potential for more business and/or larger reach. It is worth noting that one of the major challenges that most businesses face is that of people avoiding ads altogether; no matter how good your ad is, chances are that people don’t want to see it, resulting in zero engagement. The second and bigger challenge is that short messages don’t convert those who are unaware of your brand, to brand loyalists. Instead, these ads are likely to affect only those who are already considering buying into what your brand is offering, which might be a small share.

This is where Global Banking & Finance Review (GBAF) comes in. We offer you the opportunity to overcome both the challenges (and more) in one go through our guest post services.

Guest Posts Have An Edge Over Normative Advertisements

Guest posts are advertorial pieces of long-form writing, created with an aim to engage the audience by taking away the impression of normative ads. How? Sponsored posting articles are so designed that they address the audience’s demands or queries, and also offer your brand as a solution instead of point-blank marketing. Consequently, this makes the audience spend a longer time engaging with your brand than they would do with, say, a pop-up ad. Through a guest blog post, your brand has the space to engage in a fair exchange because the article delivers value to your audience rather than being a conventional sales-driven advertisement.

To sum it up, sponsored posts fall right on the sweet spot between a blog post and a traditional advertisement on the spectrum of advertising.

Here’s Why You Should Run Guest Posts on GBAF

At GBAF, our team understands the importance of the environment in which your brand is introduced to an audience, something that leaves a lasting impact on their minds. It goes without saying that this very impression will influence and drive their future decisions on whether they want to engage with your brand and buy what you’re selling. Hence, it is our staff that is usually responsible for writing the posts that go up for your brand on our website. This allows for the sponsored post to merge in seamlessly with the existing content in our website instead of sticking out like a sore thumb. The aim in doing so is to create these posts in a way that does not distract or seem abrupt as guest posts are meant to be adaptive to an existing environment. So, even though it is essentially promoting your brand, a sponsored post is more of a brand journalism piece than an ad.

On our platform, we understand the importance readers attach to authenticity and value. This also allows GBAF to have a firm grip on introducing your brand effectively while simultaneously catering to the audience’s needs. Our team works around the clock to gain our audience’s trust by continually delivering authentic and value-driven content to our readers for more than a decade. When you partner with us, that resource pool is easy to tp into. When a consumer learns about your brand through a reliable source (for instance, someone like a renowned brand, friend, some industry authority, etc), they are more likely to trust you, too.

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Why You Need to Take Guest Posting Seriously

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Why You Need to Take Guest Posting Seriously 3

When customers are largely in control of marketing conversations, traditional advertisement has lost its touch. How you educate your prospects and out-educate your competitors now win the battle and generate leads.

If you’re the spokesperson of a brand or if it is your job to tell a story that your customers care about, you know how important it is to be generous, to share your ideas on a platform that promotes storytelling, and to position your brand as the most trusted partner for your customers.

The challenge with quick, easy micro-copy is that it fails to make an impact. It’s like a quick-fix that we try to use in everything we do. However, quick-fixes don’t heal a burning pain-point. A thoughtful, easy-to-read, user-friendly guide does.

At Global Banking & Finance Review (GBAF), we help you help your customers. Here’s how.

Guest Posting: How it Works

Guest posting is the art of telling your story to your audience without shoving it down their throats. It’s not an advertisement, but a thought-leadership content piece that educates & promotes your brand to your target audience without interrupting them.

  • Our editorial team works your content piece to present your brand on our website
  • The sponsored articles adhere to the context, the tone, the voice of your brand and represent it in the way you’d like to portray to your audience
  • The content piece is lucidly written and only does one job, i.e. educating your audience
  • The piece is long-form of content that allows your target audience to engage with your brand longer (much more than an advertisement)
  • It doesn’t distract, interrupt, or intrude the audience
  • Sponsored posts are designed and articulated to solve the audience’s pain-point and showcase your brand as a solution-provider

Why Should You Run Guest Posts on GBAF?

GBAF is a platform that garners a community of over 135,000. Here are four reasons for which you should run guest posts on GBAF:

  1. We help you increase the engagement with your audience: We don’t depend on surveys to understand what your target audience wants. For the last ten years, we have been serving various kinds of readers. And we know them personally. Thus, we know how to place your content to increase engagement.
  2. We put your audience ahead of the marketing funnel: When you run an ad, you start from scratch. And as a result, the first step is always to start with the beginning of the marketing funnel. When you publish a guest post on our platform, your target audience already begins to trust you since we’ve put years of work in building the community.
  3. We help you generate leads: An ad is interruptive. When you submit a guest post on GBAF, it teaches instead. And directs the audience to take action. As a result, you generate more leads. In this era of marketing, the brand that educates better, profits more.
  4. We offer you cost-effective solutions: When you run sponsored articles on GBAF, you’re in charge of your budget. You decide how much you’d like to spend per month. And we support you with cost-effective solutions backed up with the results so that you can calculate your ROI upfront.

How to Submit a Guest Post on GBAF

  • Check categories:
  • B2B: CSR, Green Tech, AI & Big Data, Ongoing Training for Employees, Manufacturing
  • B2C: Travel Destinations, Trends on Buying a Home, Working Remotely, Electronics
  • Follow guidelines:
  • Format: Word format
  • Send at: [email protected] (or use this page to submit a guest post)
  • Length: 750 – 1000 words
  • Image: We need an image of the author (specifications: width – 800 px. & heigh – 600 px.) with original credits
  • Additional requirements:
  • Author Bio: Provide an author bio (name, title, affiliation, bio, and contact). You can add a link
  • Profile: Give a brief overview of the company, key information about the company, major projects, certifications, and company logo. Please submit the profile in word format

We review your submission and if it adheres to our submission guidelines and quality standards, we will connect with you before publishing the article.

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Editorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.

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