Using a Self-Defined Data Fabric, Banks Can Exert Accurate and Timely Control Over Their Anti-Money Laundering Systems
Last December, a large global bank got fined for more than $100 million for “serious and persistent” gaps in its anti-money laundering controls. As a matter of fact, financial watchdogs such as Britain’s Financial Conduct Authority (FCA) and the US Consumer Financial Protection Bureau (CFPB) have stepped up action against failings in bank money laundering controls in recent years.
While there are some cases of fraud and negligence, ineffective systems and lack of automated internal control are often to blame. In order to properly oversee and manage its anti-money laundering (AML) systems, a bank needs to establish internal controls that are incorporated such that there is full visibility into the calculations and reports that are related to large currency transactions, aggregate daily currency transactions, funds transfer transactions, and monetary instrument sales transactions. Auditors need to be shown that any data used for analytical and trend reports is trusted. They also need to be provided with evidence and an audit trail of previously reported issues and remediations.
How Banks Leverage Orion Governance’s EIIG
Banks can leverage Orion Governance’s Enterprise Information Intelligence Graph (EIIG), a self-defined data fabric, to strengthen their internal control and AML compliance regime. To start off, EIIG enables connectivity between all relevant data systems such as money service businesses (MSBs) and transaction monitoring systems. It automatically and intelligently ingests information all the way from the mainframe to the BI reports used by the executives. It can handle complex data sets on large scale, be it risk models developed in Python or legacy transaction applications written in PL/1 or COBOL. By doing so, it provides the auditors with end-to-end traceability of information that is current and easy to understand.
With EIIG, banks are able to use metadata analytics to get an overview of how AML related assets are distributed across the IT Landscape. Near real-time impact analysis can help identify how any changes or new applications may impact the AML control systems and prevent costly issues from happening. EIIG also catalogs all the assets that are critical to AML compliance for easy discovery and access by the compliance and other executives. Trust propagation in the form of active metadata can provide bank executives with confidence in their reports to the regulators.
Banks Obtain Compliance with Orion
In short, with EIIG, banks can rest assured that they comply with the Bank Secrecy Act (BSA) and AML regulations by showing that their independent tests are comprehensive, adequate, and timely. They can significantly reduce operational and reputational risks and save millions of dollars in potential out-of-compliance penalties.
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About the Author: Niu Bai, Ph.D. is the Head of Global Business Development at Orion Governance, Inc. Connect with Niu on LinkedIn.