Large Financial Services Firms Lag Behind Smaller Firms in Watch List Monitoring

Release date: 4/22/2010

DataFlux survey shows smaller financial services firms are more likely to have processes that screen customers and transactions against criminal and terrorist watch lists than larger firms

Cary, N.C. (April 22, 2010) — DataFlux, a leading provider of data management solutions, today announced the findings from a survey of financial services companies that showed large firms lag behind smaller firms in watch list monitoring. The study found that 56 percent of large firms (10,000+ employees) have a process to compare customers and transactions against lists of known criminals and terrorists, compared to 70 percent of smaller firms (less than 1,000 employees).

While 90 percent of organizations think watch list compliance is important, only 60 percent have a data monitoring process in place for screening transactions and customer data.

“This research confirms that watch list compliance is critical for financial services firms, but more work needs to be done to screen customers and transactions against lists of known terrorists and criminals,” said Tony Fisher, president and CEO of DataFlux. “With regulatory pressure expected to increase over the next 12 months, it is important for firms to automate watch list screening.”

The discrepancy between small and large firms is also seen in the percent of respondents reporting that their company has a fully or mostly automated watch list screening program – 66 percent of small firms have fully automated or mostly automated programs compared to 28 percent of large firms.

For those companies that have processes in place, only 33 percent of respondents from large firms think their company’s program for flagging suspicious or problematic transactions is “very effective.” More than half (57 percent) of respondents from small firms believe their company’s program is very effective.

The research, commissioned by DataFlux and conducted by Lodestar Research, a marketing research and strategy consultancy, was based on a survey of senior professionals with responsibility for data management at financial services companies. The survey was fielded in February 2010.

DataFlux solutions allow business professionals to easily align the people, processes and technology required to help financial services companies meet and exceed regulatory compliance standards. One of the more complicated compliance efforts is matching existing customer lists or business transactions to a list of known or suspected terrorists or criminals. DataFlux provides a streamlined way to match customer information to third-party databases of criminal information, allowing a quick and effective way to meet these compliance goals.

To learn more about this research and how DataFlux helps financial services companies plan and implement data management and data governance initiatives, visit www.dataflux.com.