maximizing your bang for the buck - transactional limits in aml

Copyright © 2015 BAE Systems. All Rights Reserved.BAE Systems is a trade mark of BAE Systems plc 1

MAXIMIZING YOUR BANG FOR BUCK – THE ART OF ESTABLISHING TRANSACTION LIMITS

GINA J LOWDERMILKSENIOR BUSINESS SOLUTIONS CONSULTANT


ABOUT THE PRESENTERS

GINA LOWDERMILKSENIOR BUSINESS SOLUTIONS CONSULTANT

BAE SYSTEMS APPLIED INTELLIGENCE

JEFF SKLARMANAGING DIRECTOR

SHC CONSULTING


AGENDA

Why ‘Appropriate’

Transactional Limits Are Important

What To Do

If You Don’t Have Them

What You Can Do

to Ensure they are Appropriate




What To Do


What You Can Do



Limits are the foundation for AML Transaction Monitoring

They trigger alerts for suspicious activity

They establish transaction patterns of customers

They are used for the development of risk profiles

The Limit information is used for Reporting(e.g. SAR Reporting, Board Reporting, Senior Management Reporting)


Large # of false positives

Alerts are inadequate for your organization

Inaccurate risk profiles

Potential activity being missed

Activity not being investigated properly

Suspicious activity not identified and reported timely

Increased time and resources needed to investigate large number of false positives

Insufficient resources or limited time for alert investigations

Are You Seeing this?




What To Do


What You Can Do



TOO MANY FALSE POSITIVES

INCREASE IN # OF ALERTS GENERATED

RISK PROFILES INACCURATE

TRANSACTION PATTERNS INAPPROPRIATE

LIMITS ARE APPLICABLE TO BUSINESS

ALERTS & HITS

ALERTS NOT RELEVANT


SUSPICIOUS ACTIVITY MISSED

TIME SPENT INVESTIGATING ACTIVITY NOT SUSPICIOUS BUT IS APPROPRIATE

UNTIMELY SAR REPORTING = AML VIOLATION

INCREASED RISK EXPOSURE TO MONEY LAUNDERING AND

OTHER FINANCIAL CRIMES

INVESTIGATIONS NOT COMPLETED PROPERLY

SUSPICIOUS ACTIVITY NOT REPORTED TIMELY

SUSPICIOUS ACTIVITY


ADDITIONAL TIME NEEDED TO INVESTIGATE ALL ALERTS

ADDITIONAL RESOURCES NEEDED FOR SAME

MORE RESOURCES = INCREASED MANPOWER COSTS

INCREASED TIME ON INVESTIGATION = DECREASED

TIME ON OTHER PROJECTS

INSUFFICIENT TIME OR RESOURCES = INADEQUATE INVESTIGATIONS

TIME & RESOURCES




What To Do


What You Can Do



WHEN is the last time you reviewed your limits? have you ever made any revisions?

do you review your limits? were your transactional limits originally

established? HOW

WHO originally established your limits?


WHAT


CURRENT LIMITS

• Evaluate current limits

• Evaluate number of alerts being generated by the current limits

• Number of suspicious activities being reported and investigated

HISTORICAL DATA

• Be familiar with your organization’s historical data• What is typical for your

customer base?• What businesses do you

typically do business with?• What is common with your

organization v. industry trends?

REVISIONS

• Revise transaction limits in accordance to:• Industry limits• Specifications to your

organization• Historical data• Industry trends• Current financial crime data


APPROPRIATE TRANSACTIONAL

LIMITS

More effective transaction monitoring Accurate transaction patterns Appropriate risk profiles Suspicious activity identified timely


APPROPRIATE TRANSACTIONAL

LIMITS

More effective transaction monitoring Accurate transaction patterns Appropriate risk profiles Suspicious activity identified timely

Timely Reporting Compliant with AML rules Prevention of financial

crimes Reduce costs for

additional resources Effective use of resources


Stay Out of The Headlines


Ensure monitoring of transactional limits is part of your overall AML monitoring program

Stay current with industry trends in financial crimes

Understand your transaction data

Routinely review the transactional limits and revise appropriately

Ensure sufficient time and resources are provided for monitoring transactional limits and conducting investigations


SUMMARY

Appropriate transactional limits

are critical for AML compliance

Inappropriate transactional limits

can result in AML violations

Appropriate transactional limits

can decrease costs


THANK YOU.© BAE Systems 2014, unpublished, copyright BAE Systems all rights reserved.

Proprietary: no use, disclosure or reproduction without the written permission of BAE Systems plc.

More Information:[email protected]@baesystems.comBAESystems.com/FinancialCrime

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