AML Transaction Monitoring
|
|
- Kathlyn Rogers
- 6 years ago
- Views:
Transcription
1 AML Transaction Monitoring A Survey of UK Financial Institutions September 2014
2
3 Contents Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7 Section 8 Executive summary General findings Governance Technology Coverage and quality Investigation management Conclusion a lifecycle of maturity Contact information
4 01 Executive summary
5 Transaction Monitoring (TM) is a critical, and resource intensive, component of an effective Anti-Money Laundering (AML) programme. In response to demand from UK Financial Institutions for an industry benchmark for TM we conducted a targeted survey to provide a snapshot of the current state of TM as well as plans for the future. Our survey reveals that there is a large variation in how TM systems and controls are implemented, configured and managed. There appears to be a broad lifecycle of maturity that banks are following in their adoption of TM. Organisations earlier in the lifecycle are facing the challenge of how to improve their alert performance and adequately cover their AML risks; institutions that are further developed in their TM functions face the challenge of bringing operational costs under control. This variation amongst institutions is most evident in the alert effectiveness rates achieved (in particular conversion of alerts to Suspicious Activity Reports) and the number of alert investigators employed to monitor a given number of accounts. There is a clear correlation between the level of satisfaction with TM and alert performance. However, there is no clear consensus as to what level of alert performance institutions should be aiming for. The survey results show that there are significant variations in other areas. From a technology perspective, some institutions have a higher level of automation and sophistication across alert generation and case management than others. Similarly, some have much richer Management Information (MI) available than others. From an operational perspective, there are substantial differences in the way institutions have configured their vendor TM systems and the processes for ongoing alert tuning. Survey Overview EY conducted a targeted survey of AML Transaction Monitoring (TM) professionals in order to obtain a benchmark of the maturity of TM controls across the UK Financial Services Industry. The 38 question survey comprised the following sections: Introduction and TM metrics (12 questions) Governance and management information (10 questions) Technology (9 questions) Alert coverage and quality (5 questions) Investigation management (2 questions) The survey ran for several weeks in Q following a TM round table event for UK banks. Survey Participants The survey was targeted at compliance, operations and technology leaders involved in AML TM at UK banks. Respondents roles included Money Laundering Reporting Officers, Heads of Financial Crime Compliance, Alert Investigation Managers and TM Systems Managers. Survey responses reflected different sectors within the banking industry including retail banking, corporate and wholesale banking, private wealth and securities brokerage. The survey was targeted at UK banks, but in many cases the responses reflected a global view across the organisation. 30% 20% 50% Operations Compliance Technology Figure 1: Distribution of respondents by role 14% Corporate Banking (i) Private Banking (iii) 14% 43% 29% Retail Banking (ii) Securities Brokerage Figure 2: Distribution of respondents by industry sector (i) Includes Corporate and Wholesale banking (ii) Includes Retail Banking, Credit Cards, Small/Medium Business Banking and Retail lending services (iii) Includes Private Banking and Wealth Management Services AML Transaction Monitoring 4
6 02 General findings
7 There is a wide variation in both the number of automated TM alerts that banks generate and the operational cost of investigation. Our survey covered a wide range of regional and global banking operations, from a division monitoring 5,000 accounts to global banking operations monitoring over 100 million accounts. As expected, different sizes of TM operation generate different numbers of monthly alerts. What is surprising is the large variation in the number of alerts generated on average per alert investigator, i.e. when you normalise the data. This reflects a large variation in the operational cost of a TM function: even amongst institutions with similar business profiles, some have 20 times more alerts generated per alert investigator than others. There is an even wider variation in the alert generation rates per account, especially when looking across all business lines. No of alerts generated per month 1,000, ,000 10,000 1, ,000 10,000 There is a large variation in the effectiveness of alerts generated by automated TM systems, particularly across different sectors. Typically the Retail Banking sector achieves the best conversion rates of alerts into Suspicious Activity Reports (SARs) up to 20% in some cases and the best overall rates of alerts worthy of investigation as high as 90% in some instances. At the other end of the spectrum, Securities Brokerage and Corporate Banking businesses have SAR conversion rates as low as 1% and alerts worthy of investigation as low as 5%. Whilst some of this variation may be attributable to differing policies as to when to file a SAR and as to what constitutes a worthy alert, it is notable that institutions with higher alert performance rates register higher satisfaction ratings with their TM technology and overall TM programmes. The differences in alert performance appear to not be correlated with the underlying systems used or with the individual scenarios configured within those systems in other words, all vendor systems were considered effective at detecting activity worthy of investigation. Rather, the level of maturity of the alert investigation organisation and governance around the TM function seems to be a factor. But the most significant factor is likely to be the nature of the business itself: suspicious activity is easier to identify in the Retail Banking sector where customer behaviour more naturally falls into well-defined segments. No of alert investigators Figure 3: Number of alert investigators vs. number of alerts per month Approximate number of alerts per alert investigator per month Average Maximum Minimum Approximate number of accounts per alert investigator Average Maximum Minimum 1,506,102 8,333, No of accounts monitored 10,000,000, ,000,000 1,000,000 10, ,000 10,000 No of alert investigators Figure 4: Number of alert investigators vs. number of accounts AML Transaction Monitoring 6
8 02 General findings Respondents 50% 40% 30% 20% 10% Similarly, institutions with better alert performance tend to have more sophisticated MI, for example tracking operational efficiency, data quality and system performance in addition to basic alert metrics From a technology perspective, more mature institutions tend to have all accounts monitored by a single TM system, but with multiple instances across different business lines and geographies. 0% 0-1% 1-2% 2-5% 5-10% 10-20% 20-50% % Alert Worthy Rates and SAR Conversion Rates SAR % Worthy% Figure 5: Percentage of worthy alerts vs. SAR rates 14% Financial Institutions rely on both automated TM and manual alert generation Despite the sophistication of automated TM solutions, nearly all institutions still process significant volumes of manually generated alerts. Assuming manual alerts are of higher quality than automatically generated alerts, there is an opportunity to feedback learnings from manual alerts into the configuration of the TM systems. 50% 36% No - on-going challenge to keep up with alert volumes No - but alerts mostly processed within SLA Yes - all alerts all processed within SLA Figure 6: Are your alerts investigated in a timely manner? 0% 7% Number of manual alerts per month 100,000 1, ,000 1,000,000 Number of automated alerts per month 20% 40% Figure 8: Number of automated alerts vs. number of manual alerts 33% Very Satisfied Satisfied Neither satisfied or dissatisfied Dissatisfied Very dissatisfied Figure 7: How satisfied are you with the overall effectiveness and value of your Transaction Monitoring (TM) solution(s)? Alert effectiveness and operational expenditure correlate with maturity of Management Information (MI), technology implementation and alert investigation We see a correlation between overall alert performance and associated operational expenditure on alert investigation and the level of maturity of the TM organisation in other areas. For example, more sophisticated institutions tend to have their alert investigation more specialised by business line rather than relying on a single shared service model. Financial Institutions know they need to do more, but what this means is unclear Financial Institutions want to do more with their TM programmes. For institutions with poor alert conversion rates, this means getting more out of their technology and evolving their operational processes. For institutions that already have TM programmes with which they are broadly satisfied, the focus is more on reducing operational expenditure. In summary the bar for TM and what constitutes good is unclear. Respondents indicated that investment in TM is seen as harder to justify than sanctions screening, where the results may be seen as more binary, and that TM deployments even within the same organisation can vary significantly in their effectiveness. AML Transaction Monitoring 7
9
10 Governance 03
11 Very few institutions implement a dedicated strategy for TM, rather it is part of a broader AML or Financial Crime strategy. When surveyed on TM strategy, respondents were evenly split between those that included their TM strategy within an AML strategy and those which included their strategy as part of a wider approach to financial crime. 8% 8% Only a minority of institutions surveyed feel that they have comprehensive coverage in all areas of their TM policy. Over half of respondents acknowledged that they have gaps in the implementation of their TM policy that need to be addressed. Most respondents indicated that a separate TM policy is in place for each business line or region and some implemented an enterprise wide TM policy. Specific feedback in this area indicated that a policy emphasising a consistent minimum standard with local augmentations was the objective of most institutions. 38% 46% 60% 50% 40% No dedicated TM strategy TM strategy is a component of a wider AML strategy TM strategy is a component of a wider Financial Crime strategy We have a dedicated, stand-alone strategy for TM Figure 9: Which of the following describe the TM strategy in your organisation? However, few institutions are considering synergies with other areas of financial crime in their strategies, such as fraud and tax evasion. With regards to the content of TM strategies most frequently cited were initiatives to upgrade technology platforms. The exploitation of synergies with other areas of financial crime was the least mentioned initiative this could be considered contradictory considering that a significant volume of institutions have a TM strategy that is part of a wider approach to financial crime. Our strategy includes initiatives to upgrade technology platforms Our strategy includes initiatives to create or use a shared service investigation function Our strategy includes initiatives to implement new technologies Our strategy includes initiatives to create or use an off-shore or near-shore investigation function Our strategy includes initiatives to create or use an analytical function for coverage and quality activities Our strategy includes initiatives to merge or exploit synergies with other Financial Crime areas, e.g., fraud 30% 20% 10% 0% Some policy areas have significant coverage gaps Tactical or strategic solutions in place for all major areas but gaps exist which are still to be addressed Tactical or strategic solutions in place for all major areas and all gaps have remediation plans in place Comprehensive coverage of all areas Figure 11: How fully implemented is your TM policy (select all that apply)? The majority of respondents utilise a shared service function to process TM output; however, few share this information with an FIU (Financial Intelligence Unit) With respect to institutions operating models twothirds of respondents indicated that they use a shared service model crossing multiple regions and lines of business. However, there were still significant responses that indicated siloed business line models. These responses were commonly mentioned in the context of providing specialist investigation services for areas such as correspondent banking and trade finance. A small number indicated that they used a shared model interfacing to an FIU for information sharing. This approach is seen as the one that most institutions are inclined to move towards. 0% 50% 100% Figure 10: Which of the following initiatives are contained within your TM strategy (select all that apply)? AML Transaction Monitoring 10
12 03 Governance 100% Regional shared service model across multiple lines of business/regions Current 90% 80% 70% By line of business 60% 50% 40% Enterprise wide alert investigation unit for TM output Enterprise wide alert investigation unit for TM output and interface to an FIU for information sharing 0% 10% 20% 30% 40% 50% 60% 70% 30% 20% 10% 0% Alert volumes (e.g., by line of business) Timeliness of alert investigation (e.g., alert ageing) Alert effectiveness (e.g., SAR conversion rates) Coverage metrics (e.g., volumes of alerts by scenario/aml risk) Operational efficiency metrics (e.g., alerts processed per investigator) System performance (e.g., batch run times) Data quality and completeness metrics Figure 12: How is the TM operating model defined within your organisation (select all that apply)? The level of satisfaction toward MI is mixed, with institutions more satisfied by richer information covering not only alerting volumes, but, coverage, effectiveness and operational metrics. The satisfaction toward MI is mixed amongst respondents. Responses appear to be correlated to the amount of information that is available the broader number of metrics the greater satisfaction that is expressed. Areas for future consideration are focused in data quality and technical performance for most institutions. Only around 60% of respondents current capabilities measure alert effectiveness and less than 40% capture MI on data quality. Figure 14: What MI do you currently produce relating to TM (select all that apply)? Most institutions have semi-manual MI but are moving towards more automated MI production. The majority of institutions use a combination of reports generated using their TM platform which is supplemented with semi-manual processes. Usage of dedicated MI tools is limited with provision of interactive reporting even less prevalent. Institutions are however moving toward an environment where dedicated MI capabilities are used to a greater degree with a number mentioning a planned transition in the next 1 to 2 years. Semi-manual process (e.g. using some spreadsheet templates and macros) 0% 8% 8% Use the functionality supplied by the TM system Dedicated MI tool with static reports 46% 38% Fully manual process Very Satisfied Dissatisfied Neither satisfied or dissatisfied Satisfied Very Dissatisfied Dedicated MI tool with interactive reports 0% 10% 20% 30% 40% 50% 60% 70% Figure 13: How satisfied are you with the overall effectiveness of your TM MI? Figure 15: What level of automation do you have for your TM MI (select all that apply)? AML Transaction Monitoring 11
13
14 Technology 04
15 Institutions have typically deployed multiple instances of automated TM platforms across businesses and regions. Mostly automated (e.g. a few specialist products/businesses only have manual alert generation) Fully automated Respondents use a variety of vendor supplied TM systems. NICE Actimize (Monitor and Suspicious Activity Monitor (SAM) and Oracle (Mantas) are the most widely used TM vendors in our sample, with the majority of respondents either currently having these products installed in some part of their organisation or planning to implement them in the next 12 to 24 months. Note that some respondents utilise more than one TM vendor in their technology landscapes. NICE Actimize (SAM) Oracle (Mantas) Partially automated (e.g. some lines of business only have manual alert generation) NICE Actimize (Monitor) BAE Systems (Norkom) Fiserv AML (NetEconomy) All alerts generated manually Internally developed system Avaloq AML 0% 20% 40% 60% BAE Systems (Detica) SAS AML Figure 16: What level of automation do you have for your TM alert generation (select all that apply)? Multiple instances of a common TM architecture across lines of business and regions Multiple disparate TM platforms across all lines of business and regions 0% 10% 20% 30% 40% Figure 18: What vendor TM systems do you use (select all that apply)? Satisfaction levels on the overall effectiveness of TM software varied amongst respondents with more than half expecting more from their existing platforms. Overall TM satisfaction varied and is generally correlated with the alert conversion rates discussed in the General Findings section. 0% Single centralised TM platform across all lines of business and regions 31% 46% 0% No automated TM 23% 0% 20% 40% 60% Very Satisfied Dissatisfied Neither satisfied or dissatisfied Satisfied Very Dissatisfied Figure 17: Which of the following describe the use of TM software in your organisation (select all that apply)? Figure 19: How satisfied are you with the overall effectiveness of your TM software? AML Transaction Monitoring 14
16 04 Technology Data transformation processing across institutions is quite similar with transaction data being directly extracted from source system and prepared in a staging area prior to being ingested in the TM platform. Over two-thirds of the respondents had a similar approach to data management by extracting data from source systems into an Extract, Transform and Load (ETL) platform before being ingested into the TM software. Ad-hoc checks/changes only made when issues occur; focus on remediation only Programme of periodic data quality reviews in place File level reconciliation, i.e., checks on expected size of file Sample based checks of completeness and data quality against upstream systems Combination of automated and manual data quality controls at both the file and data element level Risk based sampling used Data is collected into an ETL platform and prepared for load into a TM platform Fully automated exception management for data quality issues Volume based sampling used Data is extracted and prepared at source system for load into TM platform TM system extracts data directly from source systems to perform monitoring against - 0% 50% 100% Figure 20: How is data obtained for your TM system(s) (select all that apply)? Institutions do not rely on a single control mechanism to monitor the quality and completeness of data being ingested into the TM software; instead they typically use a combination of ad hoc checks around a dedicated programme level data quality review. When surveyed on the approach towards data quality and completeness the results were quite evenly distributed amongst respondents, with a combination of ad hoc checks, periodic data quality reviews, file level reconciliation and sample based checks. There appears, however, to be a correlation between the sophistication of data quality controls, the completeness of MI and overall satisfaction with TM. Similarly, institutions with good MI and data quality also typically have better alert performance. 0% 20% 40% 60% 80% Figure 21: Which of the following describe the processes for ensuring good quality data in your TM system(s) (select all that apply)? The majority of respondents have TM alert data fed into their investigation platform or have provided access to alert data from the source systems. When queried on how they would describe their investigation platforms for AML alerts, half of respondents described conducting manual investigations. Other responses were extremely mixed with less than a third utilising a centralised or integrated case investigation platform. There exists a high incidence of varied platforms used across divisions and geographies. Manual investigations Disparate investigation platforms in use across geographies and divisions Automated case creation from high priority alert sources Single case investigation platform for all Financial Crime activity TM Investigation platform with no case management AML alert data ingested into integrated investigation platform e.g., TM, sanctions & filtering 0% 20% 40% 60% Figure 22: Which of the following describe your investigation platform for AML alerts (select all that apply)? AML Transaction Monitoring 15
17 With respect to data availability most respondents relied on the data ingested into their relevant TM or specific investigation platform. A minority have the more advanced capability to link their analysis to other relevant AML systems and a similar minority rely on just using references to link cases with relevant data. Almost all institutions described having a multi-level investigation workflow, with some configured by geography and half of respondents enabling a restricted workflow for specific customer types such as employees and sensitive customers. TM alert data ingested into the platform Workflow has multiple levels of investigation Access to AML data in investigation platform e.g., TM profiles & alerting analysis Link analysis from case view to all related AML systems Workflow configurable for private information (e.g., restricted customers, employees) Limited data transferred to case e.g., alert reference with customer and/or account reference Workflow configurable by country/region 0% 50% 100% Figure 23: What data is available on your investigation platform (select all that apply)? 0% 50% 100% Figure 24: Which of the following describe the workflow on your investigation platform (select all that apply)? AML Transaction Monitoring 16
18 05 Coverage and quality
19 Although all respondents are using vendor built scenarios, the majority feel these only partially met their monitoring needs. When queried about their software vendor purchased monitoring systems only a small minority of respondents felt that that the provided scenarios were very robust. There is a fairly consistent set of TM scenarios used across most institutions. Rapid movement of funds and large value/volume transaction pattern scenarios are pervasive across all respondents. 70% 60% Rapid movement of funds 50% 40% 30% 20% 10% 0% Very robust, allowing my firm to pick and choose those that are most relevant Offer reasonable Are too generic Vendor built TM options, but only or irrelevant, thus solutions are not partially meet our needs employed within my organisation requiring extensive build for our organisation Figure 25: Which of the following best describes the scenarios provided with vendor purchased TM systems? Use of alerting entities such as social networks and groups of connected entities is limited with transactions, accounts and customers remaining the key alerting entities in TM. Of developing interest however, is alerting against the customer s customer being the most popular alerted entity to be planned in the next 12 to 24 months. Large amount, large volume Cash focussed Change in behaviour High risk focused (e.g. Money Service Bureaus, cash intensive businesses) Cheque focussed Structuring Wire focussed Originator/Beneficiary Peer comparison Transactions Accounts Customers Correspondent Banks Hidden relationships Credit card specific scenarios (e.g. credit usage not consistent with profile) Loan specific scenarios (e.g. early repayment) Households/addresses Customer s customer Social networks 0% 20% 40% 60% 80% 100% Figure 26: Which of the following describe the entities that your TM system monitors or alerts on (select all that apply)? Anticipated profile Securities trading specific scenarios (e.g. excessive cancels/corrects) 0% 50% 100% Figure 27: Which of the following scenarios do you use in your TM platform (select all that apply)? AML Transaction Monitoring 18
20 05 Coverage and quality Many institutions are planning to build a dedicated analytics team, utilising formalised scenario libraries with a rapid development capability Most institutions are yet to implement a standardised approach although many have a more advanced approach to tuning planned in the next 12 to 24 months. Additionally, current analytical techniques are limited with most relying on historical data to tune for coverage and alert volumes. 60% Parameters tested against historical data Tuned for coverage and alert volumes Statistical analysis of data to create robust customer segmentation and peer groups 50% 40% Parameters agreed with compliance and business teams 30% 20% Above and below the line testing and tuning 10% 0% No standard approach Scenario library formalised and aligned to directly mitigating inherent AML risk assessment Current% Dedicated analytics team develop and modify rules based on identified risks and developing risks formalised by an FIU Planned% Rapid development and deployment of new detection scenarios based on money laundering intelligence Interactive What-if analysis available to users to test scenarios Dedicated optimisation team Statistical analysis to demonstrate the effectiveness to third parties 0% 20% 40% 60% 80% Figure 28: How are your TM scenarios developed and maintained (select all that apply)? Figure 29: How are your TM scenarios tuned (select all that apply)? AML Transaction Monitoring 19
21
22 06 Investigation management
23 The alert investigation process is generally consistent across institutions The majority of institutions surveyed have a separation of duties in alert investigations between level 1 and level 2 teams to ensure obvious false positives are discarded and only worthy alerts are reviewed for further analysis. Only half of institutions use automated SAR filing 50% of the institutions surveyed use automated SAR filing. The reason this figure is not higher may be due to the relatively low SAR conversion rates experienced by many organisations as mentioned earlier in the general findings section. Suspicious cases passed on to specialist Level 2 team for further analysis Alerts initially investigated by generalist Level 1 team to gather information and filter obvious false positives Suspicious cases passed back to individual lines of business for further analysis Financial Intelligence Unit involvement in specialist cases End to end investigation by a single investigator No standardized investigation process Manual reporting of SARs via data entry on web pages Automated SAR reporting for a single jurisdiction, predominately the main market in which my Financial Institution operates Manual reporting of SARs via paper based filing Automated SAR reporting for multiple jurisdictions, outside the main market, where technically feasible Single SAR preparation, filing and repository platform deployed across financial crime areas (e.g., AML, fraud, KYC and Sanctions) 0% 20% 40% 60% 80% Figure 30: Which of the following best describe your investigation process/workflow (select all that apply)? 0% 50% 100% Figure 31: How are Suspicious Activity Reports (SARs) filed within your business line (select all that apply)? AML Transaction Monitoring 22
24 Conclusion a lifecycle of maturity 07
25 Financial institutions face common fundamental challenges in AML Transaction Monitoring of keeping operational costs under control whilst ensuring adequate mitigation of money laundering risk. The survey results support the view that many organisations follow a common lifecycle of maturity in addressing these challenges. We see six discrete stages aligned to the management of risks and the control of operational costs. These are summarised below. Stage 1 Introducing an AML TM solution. The first stage of maturity is simply the implementation of an automated TM solution where previously one did not exist. This provides a minimal level of risk management with an initial, increasing operational cost. Stage 2 Stabilisation of an AML TM platform. As a result of lessons learnt from the initial solution implementation institutions are able to achieve efficiencies and balance a basic level of cost and risk. Stage 3 Improved coverage of AML risks. Pressure from regulators and internal control functions demand that TM provide better coverage of AML risks, but this comes at a significant increase in technology and operational cost as system coverage is extended, new rules are added and thresholds are lowered. Stage 4 Rationalisation. Refinements in operational processes and systems management, and more effective application of analytical tools and methods drives decreases in costs and further decreases in residual AML risk. Stage 5 Steady state. Mature governance, MI and a dedicated TM analytics function ensures new threats are addressed effectively whilst keeping operational costs under control. Stage 6 High performance AML function. Leading edge technologies and investigative processes are applied on an opportunistic basis to drive further cost reduction and improved risk management. AML TM Operational Cost Not to scale for illustrative purposes only Residual AML Risk Stage 1 Introducing an AML TM solution Stage 2 Stabilisation of an AML solution Stage 3 Improved coverage of AML risks Stage 4 Rationalisation Stage 5 Steady state Stage 6 High performance AML function Figure 32: The relative relationship of operational costs and residual risks in Transaction Monitoring across the stages of maturity. From our survey it appears that many UK Financial Institutions in are aligned to Stages 2 and 3 with a smaller number in Stage 4 in the maturity model. The challenge for institutions that are in the earlier stages of the model is to avoid the impending rapid increase in operational cost that will likely result from regulatory pressure to drive down risks. For institutions that are more progressed, their challenge in Stage 4 is to quickly reduce the already high operational costs caused by increased alert volumes and large investigation operations. For institutions considering how to further control their AML risk, the approach is not as simple as increasing the depth of coverage, as this will drive increases in alert volumes and consequently investigation operations. A more sustainable response appears to be for institutions to enhance their fundamental capabilities in TM, by investing in: Strategy, policies and governance that drive consistent approaches to technology and operations, where necessary highlighting requirements for specialist monitoring situations Regular MI not only on aggregate output of monitoring scenarios, but on the quality and completeness of data ingested into the system, and effectiveness of investigations Analytical functions that are able to optimise coverage with evidenced results and respond to new threats with rapidly developed scenarios and controls Smarter operational management with specialized teams, a risk focused approach and better defined processes and procedures AML Transaction Monitoring 24
26 08 Contact information
27 Contact information Patrick Craig Partner, Financial Services Advisory Debbie Ward Partner, Financial Services Advisory Jodie Forbes Senior Manager, Financial Services Advisory Matt Reed Senior Manager, Financial Services Advisory
28 EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. Ernst & Young LLP The UK firm Ernst & Young LLP is a limited liability partnership registered in England and Wales with registered number OC and is a member firm of Ernst & Young Global Limited. Ernst & Young LLP, 1 More London Place, London, SE1 2AF Ernst & Young LLP. Published in the UK. All Rights Reserved. ED NONE (UK) 09/14. Creative Services Group. In line with EY s commitment to minimise its impact on the environment, this document has been printed on paper with a high recycled content. Information in this publication is intended to provide only a general outline of the subjects covered. It should neither be regarded as comprehensive nor sufficient for making decisions, nor should it be used in place of professional advice. Ernst & Young LLP accepts no responsibility for any loss arising from any action taken or not taken by anyone using this material. ey.com/uk
Anti-money laundering (AML) Transaction Monitoring
Anti-money laundering (AML) Transaction Monitoring 2018 EMEIA Survey Report October 2018 Contents 0 1 Executive summary 0 4 Detailed analysis 20 Conclusion 22 Contacts 3 AML Transaction Monitoring 2018
More informationIntegrated reporting. Communicating sustainable value creation
Integrated reporting Communicating sustainable value creation What is Integrated Reporting (IR)? IR is a significant evolution in corporate reporting, providing a business s investors and other principal
More informationComplex contracting made simple
Complex contracting made simple Integrated legal and advisory services Complex contracting made simple Integrated legal and advisory services EY s multi-disciplinary complex service contracts team delivers
More informationInstitute of Global Mobility
Institute of Global Mobility Responding to changing demands: the evolution of the global mobility function October 2013 Working towards enabling strategic alignment of the Global Mobility function with
More informationWhat is next for Interbank Offered Rates?
What is next for Interbank Offered Rates? What is changing? After more than 40 years of organisations relying on Interbank Offered Rates (IBORs) as a reference rate, the London Interbank Offered Rate (LIBOR)
More informationSupporting local public services through change. Contract optimisation
Supporting local public services through change optimisation Getting value for money from contracts and spend with third parties is an ongoing challenge for most organisations. This is increasingly true
More informationAs we say robot, will our children say colleague? ey.com/betterworkingworld #BetterQuestions
As we say robot, will our children say colleague? ey.com/betterworkingworld #BetterQuestions Contents A new world of robotic process automation 2 Embracing robotics in the work place 3 Which tasks could
More informationRisk reduction? Value creation?
The power of culture: Risk reduction? Value creation? Find out what applying a cultural lens to your organisation could reveal Measuring the effectiveness and value of culture and potential risks is one
More informationIntroduction to Financial Modelling. Training course outline
Introduction to Financial Modelling Training course outline Overview This course aims to provide participants with a thorough understanding of how to build a robust financial model from start to finish.
More informationEY s response to Building the UK financial sector s operational resilience a BoE/FCA/PRA Discussion Paper
EY s response to Building the UK financial sector s operational resilience a BoE/FCA/PRA Discussion Paper Minds made for protecting financial services When the financial services industry works well, it
More informationAML model risk management and validation
AML model risk management and validation Who we are EY s Anti-Money Laundering (AML) and Regulatory Compliance Technology practice is a global team of client-serving, financial services professionals.
More informationOpen Banking: the technology revolution sweeping across the banking industry. Policy Pulse June 2018 compendium
Open Banking: the technology revolution sweeping across the banking industry Policy Pulse June 2018 compendium Eamonn McGrath UK Head of Regulatory & Public Policy Loree M. Gourley UK Director of Regulatory
More informationFAAS Financial Reporting Training
EY Assurance Tax Transactions Advisory Instructor profile Claire Dean is a Director in EY s UK Financial Accounting Advisory Services team where she is responsible for providing IFRS and UK GAAP training
More informationIntroduction to DCF Modelling. Training course outline
Introduction to DCF Modelling Training course outline Overview This course aims to provide participants with a thorough understanding of how to build a robust financial model from start to finish. Calculations
More informationBuilding and operating the UK s infrastructure. Establishing your roadmap to success
Building and operating the UK s infrastructure Establishing your roadmap to success Building for the future The UK government has issued a challenge to the sector to remedy a 50 year backlog in investment
More informationExcellence in Operations. Getting the basics right in banking
Excellence in Operations Getting the basics right in banking Getting the basics right in banking Overview Banks are currently focusing their efforts on complying with increasingly complex regulations and
More informationHow robotics is changing the way accountancy firms conduct audits. Policy Pulse June 2018 compendium
How robotics is changing the way accountancy firms conduct audits Policy Pulse June 2018 compendium Eamonn McGrath UK Head of Regulatory & Public Policy Loree M. Gourley UK Director of Regulatory & Public
More informationSupporting local public services through change. Getting more from strategic commissioning
Supporting local public services through change Getting more from strategic commissioning The unprecedented level of public sector spending cuts and the impact on local authority budgets is well documented.
More informationThe viability statement. Finding opportunities in the new regulatory challenge March 2015
The viability statement Finding opportunities in the new regulatory challenge March 2015 Foreword The clock is already ticking for directors of listed 1 companies with accounting periods beginning on or
More informationBig risks require big data thinking: EY Forensic Data Analytics (FDA), powered by IBM
Big risks require big data thinking: EY Forensic Data Analytics (FDA), powered by IBM Executives across multiple business functions, industries and geographies, have made significant advancements to solve
More informationRegulatory Reporting: Implementing the proposed MAS Notice 610. Navigating the regulatory reporting and data challenge
Regulatory Reporting: Implementing the proposed MAS Notice 610 Navigating the regulatory reporting and data challenge Contents 03 Introduction 04 MAS Notice 610 timeline and implementation 05 Addressing
More informationSupporting local public services through change. Getting more from strategic commissioning
Supporting local public services through change Getting more from strategic commissioning Public buildings house the meeting places, books, clinical equipment, blue light vehicles, sports facilities, care
More informationThe UK Modern Slavery Act What are the requirements and how should businesses respond?
The UK Modern Slavery Act 2015 What are the requirements and how should businesses respond? Introduction Modern slavery is defined as slavery, servitude, forced or compulsory labour and human trafficking
More informationBest practice workshop. Training course outline
Best practice workshop Training course outline Overview This course aims to provide participants with a thorough understanding of how to construct a financial model using leading approaches towards model
More informationStreamline your business processes for far-reaching results. EY s Business Process Management Services practice
Streamline your business processes for far-reaching results EY s Business Process Management Services practice Introduction Today s financial services organizations are facing a number of pressures: Stressed
More informationTake-aways from EY s series of Internal Audit Analytics roundtables over 2016
Take-aways from EY s series of Internal Audit Analytics roundtables over 2016 2 Amsterdam Roundtable on Data Analytics for Internal Audit Over 2016 EY hosted a series of roundtables with key executives
More informationSupporting local public services through change. Integrating health and social care services
Supporting local public services through change Integrating health and social care services Health and social care services should be viewed as a single, interdependent system. Services designed from this
More informationStrathclyde Partnership for Transport
Agenda item 5 Strathclyde Partnership for Transport Independent Examination of Internal Audit February 2017 Contents Page Executive summary 1 Section 1 Public sector internal audit standards 2 Section
More informationThe future of assurance How technology is transforming the audit
The future of assurance How technology is transforming the audit 1/6 2/6 Viewpoint Advances in technology are fundamentally changing the nature of the audit. How can auditors harness the latest technology
More informationDigital Passport. Transforming SME banking through customer-permissioned data exchange
Digital Passport Transforming SME banking through customer-permissioned data exchange Contents The Digital Passport 3 How the Digital Passport works 4 Why EY? 7 Contacts 7 The Digital Passport Putting
More informationEY Disruption Index Are you ahead of the curve?
EY Disruption Index Are you ahead of the curve? November 2018 Introduction Welcome to the EY Disruption Index bulletin for Q4 2018. This is the first edition of a regular publication sharing key insights
More informationBig data strategy to support the CFO and governance agenda
Financial Accounting Advisory Services Big data strategy to support the CFO and governance agenda Big data has the potential to change the way people work. It is creating a culture in which business and
More informationCoE in a Box - Enablement and Controls. The key get rights vital to successful RPA CoE Program
CoE in a Box - Enablement and Controls The key get rights vital to successful RPA CoE Program Robotics Process Automation Organizations of varying size, scale, and type are adapting RPA to automate business
More informationInfo paper Is your sanctions filter working?
Info paper Is your sanctions filter working? How regular testing and tuning can help you achieve peace of mind. Contents How regular testing and tuning can help you achieve peace of mind. Executive Summary
More informationInnovating with RegTech. Turning regulatory compliance into a competitive advantage
Innovating with RegTech Turning regulatory compliance into a competitive advantage Contents Executive summary 01 The evolution of RegTech 02 RegTech ecosystem 04 Market insights 06 RegTech benefits 08
More informationActimize Essentials. Cloud-based Solutions for Financial Crime Prevention & Regulatory Compliance
Actimize Essentials Cloud-based Solutions for Financial Crime Prevention & Regulatory Compliance FIs of All Sizes Face Increasing Pressures From Financial Crime and Tightening Regulations As regulations
More informationIntegrating COSO s Fraud Risk Management Guide on an Enterprise Scale
Integrating COSO s Fraud Risk Management Guide on an Enterprise Scale September 15, 2017 Vincent Walden Partner EY Atlanta Delores White Director, Internal Audit Southern Company Scott Hulsey Chief Compliance
More informationZero clothing returns. Digital future or fairytale?
Zero clothing returns. Digital future or fairytale? 1 Executive Summary Retail is disrupted and out of balance; in the race to win with customer experience, operating costs have spiralled. Digital technologies
More informationAssessing the effectiveness of the external audit process
Assessing the effectiveness of the external audit process A guide for audit committees November 2013 Foreword This document offers practical guidance and direction for audit committees seeking to discharge
More informationBusiness resilience in the provider care sector. Actively adapting to a changing environment
Business in the provider care sector Actively adapting to a changing environment There has never been a greater need for a company to assess its own business and nowhere is this more true than in the provider
More informationAnnual reporting in 2016/17: broad perspective, clear focus Aide mémoire
Annual reporting in 2016/17: broad perspective, clear focus Aide mémoire Aide mémoire This aide mémoire will help you address key considerations and challenges as you start planning and drafting your next
More informationOut with the old, in with the new. Early reflections from EY s review of December 2013 annual reports in the FTSE 350 June 2014
Out with the old, in with the new Early reflections from EY s review of December 2013 annual reports in the FTSE 350 June 2014 A year of change in corporate reporting 2013 was clearly a year of change
More informationW4: Remote Trading Supervision
W4: Remote Trading Supervision The importance of a strong oversight model The European Compliance Conference Warsaw 19 April 2018 Introductions Julian Marsh Partner Ernst & Young LLP Mark Goulden Global
More informationThe winning tax transformation trinity. Data, technology and operations
The winning tax transformation trinity Data, technology and operations Panel Moderators Daryl Blakeway Director South Africa Tax Performance Advisory Anthony Davis Executive Director EMEIA Tax Performance
More informationInnovation in transactions
Innovation in transactions Data and Analytics in the Transaction lifecycle Kenneth Ingram EY Transaction Analytics Markets are changing with data growth in volume, variety and velocity Business are facing
More informationThe credit card industry: navigating an evolving environment. EY Advisory Services
The credit card industry: navigating an evolving environment EY Advisory Services The credit card industry: navigating an evolving environment The path to profitability for card issuers has been increasingly
More informationCrowe Caliber. Using Technology to Enhance AML Model Risk Management Programs and Automate Model Calibration. Audit Tax Advisory Risk Performance
Crowe Caliber Using Technology to Enhance AML Model Risk Management Programs and Automate Model Calibration Audit Tax Advisory Risk Performance The Unique Alternative to the Big Four Crowe Caliber: Using
More informationShareholder engagement and corporate reporting at a crossroads. February 2014
Shareholder engagement and corporate reporting at a crossroads February 2014 Will company boards, investors and auditors embrace new corporate governance changes so as to maximise the benefits to shareholders?
More informationBanking Guiding an industry in transition
Banking 2014 Guiding an industry in transition 2 EY s Banking practice Guiding an industry in transition The global financial crisis and the regulatory reform that has taken place over the past several
More informationCombining Data Analytics with Transaction Monitoring Capabilities to Identify Suspicious Behavior. AIBA Compliance Seminar March 3, 2015
Combining Data Analytics with Transaction Monitoring Capabilities to Identify Suspicious Behavior AIBA Compliance Seminar March 3, 2015 Agenda i About K2 Intelligence K2 Intelligence Team Foundation of
More informationCloudy skies. How to bring clarity to your cloud platform in order to optimize your investment. September 2016
Cloudy skies How to bring clarity to your cloud platform in order to optimize your investment September 2016 The benefits of the cloud are clear Flexibility Scalability Accessibility Decreased initial
More informationInternal audit in insurance: market issues and trends
Internal audit in insurance: market issues and trends Contents 3 Legal risk The need for clarity 5 Solvency II Pillar 3 A complex process 7 Strategic risk Be prepared 9 How EY can help 1 Insurance internal
More informationOptimize network OPEX and CAPEX while enhancing the quality of service. Telecom, media and technology January 2014
Optimize network OPEX and CAPEX while enhancing the quality of service Telecom, media and technology January 2014 Contents Introduction...01 I. An urgent need to optimize network OPEX and CAPEX...02 II.
More informationCan complex demands lead to a better working world? Global Compliance & Reporting and EYKeySpace : innovation at the intersection of finance and tax
Can complex demands lead to a better working world? Global Compliance & Reporting and EYSpace : innovation at the intersection of finance and tax 2 GCR and EYSpace TM : Innovation at the intersection of
More informationEY license compliance manager for SAP software. Forensic Technology & Discovery Services
EY license compliance manager for SAP software Forensic Technology & Discovery Services Overview In an increasingly complex world, where software deployment has become pervasive throughout business life,
More informationAre you ready for a future outside of the European Union?
Are you ready for a future outside of the European Union? Key considerations for the Life Sciences sector November 2017 The UK is expected to exit the European Union from 29 March 2019. This has consequences
More informationAdvancing analytics and automation within internal audit
Advancing analytics and automation within internal audit A look into the current maturity stages of internal audit analytics and how internal audit departments are further developing their analytics programs
More informationAccelerating your financial close arrangements
Accelerating your financial close arrangements EY Think Piece Contents at a glance Local government accounting, auditing and governance preserving quality financial reporting in light of the new reporting
More informationEY Midlands Engine Devolution Survey
EY Midlands Engine Devolution Survey The Midlands Engine: your views on how this should work Driving Midlands Growth Executive summary Over the coming years, the region s political and economic structure
More informationThird Party Governance and Risk Management
Third Party Governance and Risk Management 23 October 2017 Agenda Today s discussion topics Third Party Ecosystem Insights from the Deloitte Global Third Party Risk Management Survey Third party risk management
More informationThe shrinking treasury management system landscape TEXPO April 2017
The shrinking treasury management system landscape TEXPO 2017 April 2017 Disclaimer EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited,
More informationImproving your finance function effectiveness
April 2016 Financial Accounting Advisory Services Improving your finance function effectiveness Establishing a Center of Expertise framework for your teams Finance functions in many companies are evolving
More informationAML for MSBs & FinTech: The Compliance Conundrum. Insight Article. Copyright 2016 NICE Actimize. All rights reserved.
AML for MSBs & FinTech: The Compliance Conundrum Insight Article Copyright 2016 NICE Actimize. All rights reserved. TABLE OF CONTENTS FinTech Innovation Collides with Reality... 3 Compliance Challenges
More informationUse of analytics in financial services to combat Fraud and Anti Money Laundering.
Use of analytics in financial services to combat Fraud and Anti Money Laundering. The Data Warehouse Institute (TDWI) 3 August 2011 Richard Moore Head of Security Advisory & Investigations, Group Security
More informationActimize Essentials AML. Cloud Based Anti-Money Laundering Solutions
Actimize Essentials AML Cloud Based Anti-Money Laundering Solutions Essential Anti-Money Laundering Compliance Capabilities Growing Compliance Burdens for Financial Institutions of All Sizes As recent
More informationAutomotive finance. October 2014
Automotive finance October 2014 3 Automotive finance Growing in a changing environment The auto finance market has been in recovery since 2008. Record low interest rates, access to credit and new market
More informationThe Modern FCIU: Special Risk Investigations
SAS FINANCIAL CRIMES EXECUTIVE FORUM Toronto, 2018 The Modern FCIU: Special Risk Investigations Daniel Nagle, Global Banking Principal, SAS Trends in Compliance What are other Financial Institutions saying?
More informationResults Integrity Management Survey
Week of Integrity 2018 Results Integrity Management Survey 1 9 December 2018 Level of awareness and effective mitigation of integrity and integrity risk Week of Integrity In the Week of Integrity a large
More informationAccelerate programme launch
Accelerate 2012 programme launch Contents Welcome 01 Accelerate: How it works 02 Overview 03 Workshop outlines 05 London dates 20 Welcome I passionately believe in Ernst & Young making the difference for
More informationMadison Consulting Group. An Introduction to AML Compliance Consulting Services
An Introduction to AML Compliance Consulting Services May 2009 Table of Contents Firm Overview AML Compliance Practice Contact Information 3 4 5 14 15 2 Who We Are Experience Financial Services Specialists
More informationEY LIC Solution. Powerful tool to support quick IFRS 9 implementation
EY LIC Solution Powerful tool to support quick IFRS 9 implementation Contents Executive summary... 1 How EY LIC Solution helps... 2 Functionalities and applied methods... 3 Parameters of collective assessment...
More informationThe Business Model concept in Integrated Reporting
This IR Update comprises the following: - To propose a definition of the term business model for IR - To provide guidance on how to disclose the business model in an IR Integrated Reporting Update The
More informationPoor customer experience costs $40 billion per year. Customer Experience Series Cost of Complaining
Poor customer experience costs $40 billion per year Customer Experience Series Cost of Complaining Australian businesses are losing more than $720 for every negative customer experience The EY Customer
More informationMichael Lammie Director, PricewaterhouseCoopers
www.pwc.com BSA/AML Risk Assessment and Data Analytics ACAMS Chicago Chapter Michael Lammie Director, PricewaterhouseCoopers Welcome 2 Current State Risk Assessment Challenges Current State Point in time
More informationThe Changing Check Deposit Landscape: An Obstacle Course for Fraud Management. Copyright 2016 NICE Actimize. All rights reserved.
The Changing Check Deposit Landscape: An Obstacle Course for Fraud Management TABLE OF CONTENTS Overview... 3 Fraud Follows Speed: The Hurdles Financial Institutions Face... 3 Navigate to the Safety of
More informationModel Risk Management (MRM)
Model Risk Management (MRM) 2015 SEAC Fall Meeting Dwayne Husbands November 20, 2015 Overview Introduction Model risk management framework Common challenges Page 1 Introduction Background Model risk management
More informationYOUR PLANNING & REPORTING SUDDENLY GOT EASIER AND MORE EFFECTIVE!
YOUR PLANNING & REPORTING SUDDENLY GOT EASIER AND MORE EFFECTIVE! "We went from complex, inefficient spreadsheets to an automated, transparent and efficient forecasting, budgeting & reporting environment."
More informationThe Ten Commandments of Information Governance & edisclosure 2015
The Ten Commandments of Information Governance & edisclosure 2015 Recent years have seen a massive increase in regulatory scrutiny, investigations and disputes, particularly in the most heavily regulated
More informationHeightened standards for compliance risk management. Lines of defense compliance s role
Heightened standards for risk management Lines of defense s role Post-financial crisis, the Office of the Comptroller of the Currency (OCC) developed a set of heightened expectations to enhance the risk
More informationCOP21 and the Paris Agreement: what it means for UK businesses
COP21 and the Paris Agreement: what it means for UK businesses Climate policy update January 2016 The international agreement reached at the Paris Conference of Parties (COP21) marks a significant inflection
More informationGoverning the cloud. insights for 5executives. Drive innovation and empower your workforce through responsible adoption of the cloud
insights for 5executives Governing the cloud Drive innovation and empower your workforce through responsible adoption of the cloud Of special interest to Chief information officers Chief information security
More informationPayments the new player domain. How EY can assist
Payments the new player domain How EY can assist Payment is defined as an exchange of financial value between two parties for goods or services. Contents Current trend... 1 Importance of an end-to-end
More informationDoes a disrupted Internal Audit function mean a stronger strategic partner?
Does a disrupted Internal Audit function mean a stronger strategic partner? The future of internal audit will require significant disruption to keep pace with global change. To keep pace with digital and
More informationBusiness integrity and sustainable growth: making the intelligent connection Fraud Investigation & Dispute Services
Business Integrity and Corporate Compliance Business integrity and sustainable growth: making the intelligent connection Fraud Investigation & Dispute Services We make the connection between integrity,
More informationA GUIDE TO FRICTIONLESS DELIVERY
A GUIDE TO FRICTIONLESS DELIVERY Aligning DevOps, ITSM and other tooling is the key to achieving frictionless delivery. This paper explains how to connect portfolio management, change and operate activities
More informationKPMG Smart Controls. Putting you in control of your controls. kpmg.co.uk
KPMG Smart Controls Putting you in control of your controls kpmg.co.uk KPMG Smart Controls Putting you in control of your controls Our solution for Control Testing, Assurance and Clouded by controls Many
More informationEY Forensic & Integrity Services
EY Forensic & Integrity Services EY Business Intelligence A disruptive offering to traditional due diligence The difference between information and intelligence is context and experience. Fred Gebauer,
More informationEnergy: fixed overhead or controllable input?
Energy management Energy: fixed overhead or controllable input? EY can help you track, visualize and analyze energy and water use right down to the production unit level, so you can manage utilities like
More informationPayment by Results: what are the key get rights prior to launching a successful programme?
Payment by Results: what are the key get rights prior to launching a successful programme? Payment by Results: what are the key get rights prior to launching a successful programme? This paper will be
More informationThe long and winding road to corporate governance reform
August 2017 The long and winding road to corporate governance reform A summary of the Government s response to reform the UK s corporate governance framework Introduction On 29 August 2017, the Government
More informationDeloitte Shared Services, GBS & BPO Conference Indirect Tax: Delivering Best-in- Class Compliance in a GBS Environment
Deloitte Shared Services, GBS & BPO Conference Indirect Tax: Delivering Best-in- Class Compliance in a GBS Environment Christophe de Waele & Demian de Souza, Deloitte 22 23 September 2015 Berlin, Germany
More informationCFO attestation: building a sustainable process
CFO attestation: building a sustainable process This regulatory briefing highlights the challenges faced by firms in establishing their CFO attestation supporting capabilities, as well as the priorities
More informationEnterprise intelligence in modern shipping
Enterprise intelligence in modern shipping Leveraging commercial and cost performance with data analytics 7th Capital Link Greek Shipping Forum 16 February 2016 Agenda I. What is Enterprise Intelligence?
More informationGlobal mobility shared service centres That s the bottom line
Global mobility shared service centres That s the bottom line September 2014 Contents Introduction 1 Why consider it? 2 How would we do it? 3 Who to contact 8 Introduction Most, if not all companies, are
More informationEffective Risk Management With AML Risk Assessment. January 25, 2017
Effective Risk Management With AML Risk Assessment January 25, 2017 2017 2017 Crowe Crowe Horwath Horwath LLP LLP Agenda Regulatory Trends in Risk Assessment Crowe Approach to Anti-Money Laundering (AML)
More informationManaging the move to SMI How EY helps clients get the most from a multisourced environment Service management integration (SMI)
Managing the move to SMI How EY helps clients get the most from a multisourced environment Service management integration (SMI) Industry trends for outsourcing are evolving, and it s more important than
More informationreport that their financial impact of all fraud, corruption and/or money laundering incidents is over per incident
Week of Integrity 2017 1 9 December 2017 Results Integrity Management survey 90% of respondents consider the risk of bribery/corruption and fraud applicable to their business 73% of respondents report
More informationROI EVALUATION REPORT IBM COGNOS SOFTWARE
ROI EVALUATION REPORT IBM COGNOS SOFTWARE Corporate Headquarters Nucleus Research Inc. 100 State Street Boston, MA 02109 Phone: +1 617.720.2000 Nucleus Research Inc. THE BOTTOM LINE Companies that use
More informationDesigning a finance function to meet tomorrow s challenges
April 2016 Financial Accounting Advisory Services Designing a finance function to meet tomorrow s challenges Creating increased enterprise value requires finance leaders to adapt both to a rapidly changing
More informationKeeping pace with innovation. Managing conduct risk in a digital era
Keeping pace with innovation Managing conduct risk in a digital era Keeping pace with innovation Managing conduct risk in a digital era Digital conduct risk The most immediate priority here for us and
More information