Helping a UK Bank Holding Company remedy shortcomings in AML Transaction Monitoring
Client: Large UK Bank Holding Company
Sucess Dialog
This is added to your favourites.
Warning Dialog
This is already added to your favourites.
sorry something went wrong.
Objective
Design and implement a wholescale remediation program for a London-based bank holding company whose AML Transaction Monitoring process was found to have deficiencies.
CRISIL's Solution
CRISIL partnered with the client to design and implement an AML Transaction Monitoring Remediation and Transformation Program, including the development and validation of the current standardised customer segmentation model, development of a methodology to determine thresholds for each segment, and the creation and validation of scenarios to generate alerts and transactions by tuning the parameters for thresholds. The CRISIL team accomplished this task with the following steps:
1. Segmentation validation
Generalised validation framework
Developed a suite for validating the segmentation model for standardised segments and risks for different portfolios
Gained in-depth understanding of various input parameters for different portfolios to derive common 'plug-in' solutions for validation tasks
Automated reports
Produced automated validation reports for portfolios
Automated deep dives for root-cause analysis for segmentation validation failures
Provided scalable reporting aspects to monitor/include additional KPIs
Threshold review & tuning
Determine relevant basis population for each scenario based on
Transactional level scenarios
Non-transactional level scenarios
Derive and validate thresholds based on tunable parameters to ensure alert rules for scenarios are met
Establish a QC process to verify the threshold bands selected and analyse events and alerts generation
2. Scenario testing & tuning
Scenario development/modification based on the following parameters (not extensive)
Customer segment
Geographies, channels and risk levels
Line of banking business
Amendable transaction patterns
Scenario validation to confirm
Business requirements, specifications and transaction/alert counts are met within the select scenario
Coverage and redundancy aspects between scenarios
Develop a threshold table for each scenario to analyse or modify parameter thresholds based on feedback
Client Impact
The implementation was completed globally across countries, with integration of local regulations.
The bank met all timelines for the validation.
The suite of tools developed could be reused (with little or no modifications) for future validation exercises.
Risks associated with failed segments were quickly mitigated.
Coverage redundancy reduced due to improved segmentation and scenario tuning.
False positives reduced by 5% due to threshold tuning.
Request for services
Questions
Looking for high-end research and risk services? Reach out to us at: