One of the largest financial institutions in North America serves millions of personal, business and public sector accounts. The company has offices throughout North America and in more than 30 countries around the world.
Since 2000, no industry has undergone as much upheaval and widespread change than the financial services sector. Financial scandals and a marked downturn in the economy contributed to a shift in the regulatory oversight on banks, insurers and accounting firms. The new laws came fast and furious – Sarbanes-Oxley, the PATRIOT Act, Office of Foreign Assets Control (OFAC) – causing financial services providers to adjust and react to a new marketplace.
The implication for financial institutions was clear. Verify that you are doing business with reputable individuals and companies – or face severe fines. The laws specifically required a review of customer records against a list of names of people or organizations suspected of terrorist activity. To accomplish this, financial services institutions need a technology to monitor, identify and flag suspicious activity for compliance officers.
Immediately after these regulations went into effect, this financial services company installed a system that used exact or near-exact matching to identify questionable transactions. As a result, the compliance team received a high number of “false positives” – transactions that looked suspicious but were actually valid – to review and verify each day.
To meet the demands of the new regulatory standards, the company needed a technology solution that could intelligently find customer records and transactions that could pose a threat to national security. This would help minimize the impact on the compliance department while keeping the company compliant with regulations.
The financial services company selected DataFlux software to help fine-tune the matching process to help them achieve compliance with federal mandates. DataFlux technology allows the company to compare transactional data to a third-party database that contains updated lists of known criminals, terrorists or affiliated organizations. They also built an interactive interface for tellers and customer service staff to input information manually and verify against a third-party list.
Using proprietary fuzzy matching technology, DataFlux solutions can intelligently identify relationships between different data sources. The technology allows the company to customize match rules as conditions change, allowing the financial services provider to refine match results over time.
After implementing DataFlux technology, the financial services company saw a quick reduction in the number of false positives reaching the compliance team. This process improvement allowed the staff to do more thorough checks of questionable transactions – and reduced the workload on the already over-burdened compliance staff.
With better matching technology in place, the company no longer “over-regulates” transactions. Transactions are scrutinized more accurately with DataFlux technology, which improves processing time for compliance checks – and allows the company to provide more responsive customer service.