Financial Crime Risk Investigations

The last phase of financial crime risk is often the most overlooked, but it underpins the entire financial crime risk lifecycle. While prevention and detection each deal with types of risks, investigation encompasses how those risks are handled and resolved once they have been identified. Intuitively, the necessity of this step in the overall lifecycle makes sense; however, the often unnoticed aspect is how essential the manner in which issues are discovered and decisioned affects the institution in terms of both risk and cost.

Highlighting how different effective resolution and investigation of risks can be from traditional, often human-driven analysis shows how great of an impact this step has on an institution. Done properly, this means a financial services organization (e.g. banks, investment banks, insurance companies, credit card companies and stock brokerages) is:

(a) Ensuring analysts address the highest risk incidents first, reacting quickly before major issues or losses occur as opposed to handling events in the order they occurred.

(b) Keeping managers and supervisors aware of what’s happening as it happens, in terms of emerging risks and analyst productivity, rather than waiting until a periodic reporting time when it is too late.

(c) Creating processes and workflows so that analysts treat each incident the same way and resolve issues in a predictable amount of time.

(d) Automatically recording all analyst activity for future audits and capacity planning, instead of relying on investigators with varying levels of experience to identify complex threats across multiple point solutions.

(e) Streamlining actions performed by solutions, thereby speeding issue resolution and lowering overall costs.

An organization’s reaction to an event is just as important as awareness of the incident in the first place as demonstrated in the examples above. Proper prioritization of risks and correlation of activity across departments, jurisdictions, and functional areas requires capabilities beyond that of even the best-trained investigator. Developing processes and technology that not only automate low-risk activities, but that also provide insight to human investigators on complex, suspicious incidents is a true “game-changer” in Financial Crime Risk Management; moreover, it has the potential to save the organization significant operational costs while also eliminating the artificial barriers between information silos.

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