Name: ComplyAdvantage at Sibos 2023 – Financial crime risk management
Uploaded: 2023-10-18T09:46:39.292Z
Duration: 468.9

08-Andrew Davies.mp4

08-Andrew Davies.vtt

ENGLISH

{{00:00:06}}
This is FinTech

{{00:00:07}}
Futures at Sibos and I'm

{{00:00:08}}
joined by Andrew Davies
of Comply Advantage.

{{00:00:10}}
Andrew, thank you so much for taking
the time out to come and speak with us.

{{00:00:13}}
Just to get started, I'd like to
give a quick introduction to yourself

{{00:00:15}}
and your role in Comply Advantage.

{{00:00:17}}
So my name's Andrew Davis.

{{00:00:18}}
I run the Global Regulatory Affairs team

{{00:00:21}}
at Comply Advantage,

{{00:00:22}}
which means that we support our
organization in making sure our

{{00:00:27}}
solutions are consistent with market
trends and consistent with the needs

{{00:00:31}}
of our customers to support them
in managing financial crime risk.

{{00:00:35}}
And I've been in the space
for quite a long time.

{{00:00:37}}
So I've seen that sort of evolution
of, from when we started doing

{{00:00:41}}
transaction monitoring for
something like terrorist financing.

{{00:00:44}}
all the way through to where we
are today with more real time

{{00:00:47}}
payments and managing risk in the
context of those type of payments.

{{00:00:50}}
Excellent.

{{00:00:51}}


{{00:00:51}}
So what would you say is shaping
the financial crime landscape today?

{{00:00:54}}
So there's a couple of things.

{{00:00:56}}
So the first thing is criminals
will take advantage of any

{{00:00:58}}
disruption in the industry.

{{00:01:00}}
So they're entrepreneurial, they're
not worried about different compliance

{{00:01:03}}
obligations, they're singularly
focused on committing financial crime.

{{00:01:06}}
So with the transformation of financial
services around the introduction of more

{{00:01:10}}
digital channels, with the advent of
more real time payments, money moving

{{00:01:14}}
more quickly, the criminals will try and
take advantage of that transformation.

{{00:01:18}}
Now that transformation is good, better
customer experience, a broader portfolio

{{00:01:22}}
of companies that are operating within
that financial services ecosystem,

{{00:01:26}}
and money moving more quickly.

{{00:01:28}}
Great services for corporates, for
institutions, and for individuals.

{{00:01:31}}
Criminals will try and take
advantage of that disruption.

{{00:01:34}}
That's sort of one dimension that's
shaping the financial crime landscape.

{{00:01:39}}
The other thing is the
regulatory landscape.

{{00:01:44}}
Broadly, regulators around the world
have, they're not just interested in

{{00:01:49}}
something as basic as money laundering
or fraud, they're looking at the

{{00:01:53}}
predicate crimes for money laundering.

{{00:01:55}}
So there's been this movement from a
regulatory perspective to say, okay,

{{00:02:00}}
there is, there are these predicate
crimes which are particularly nefarious.

{{00:02:03}}
It could be human trafficking, they
could be the illegal wildlife trade.

{{00:02:06}}
So for example, 23 billion dollars
annually is laundered from the proceeds

{{00:02:11}}
of the illegal trafficking of wildlife.

{{00:02:14}}
50 million people are subject to
human slavery, so the regulators are

{{00:02:17}}
now focused on those underpinnings
to money laundering, so the

{{00:02:21}}
transformation of financial services.

{{00:02:23}}
Criminals will try and take advantage
of that disruption, and then the

{{00:02:26}}
broader purview in support of a sort
of moral imperative, they're really

{{00:02:30}}
driving the financial crime landscape.

{{00:02:32}}
And what kind of actions are
global regulators taking to deal

{{00:02:37}}
with this evolving landscape?

{{00:02:38}}
I think there's a couple of things.

{{00:02:39}}
The first thing is...

{{00:02:41}}
With direction from things like the
FinCEN national priorities, certainly

{{00:02:44}}
the Monetary Authority in Singapore, the
FCA in the UK, and then the definition

{{00:02:49}}
of these predicate crimes from under the
sort of AML directives of the European

{{00:02:52}}
Union, that's brought to the fore
this sort of idea of making sure that

{{00:02:59}}
financial institutions and the broader
ecosystem of financial services companies

{{00:03:02}}
are focused on those predicate crimes.

{{00:03:06}}
Now, there's we want to maintain the
integrity of the financial system, we

{{00:03:10}}
want to make sure that we're protecting
our customers, and we want to make

{{00:03:13}}
sure that we're stopping the criminals.

{{00:03:16}}
Right now, it's estimated that 2 5
percent of global GDP is laundered

{{00:03:21}}
through the financial system annually.

{{00:03:23}}
It's been that figure for 25 years.

{{00:03:25}}
So the regulators are now saying,
okay, let's try and solve some of

{{00:03:28}}
the fundamental problems and let's
potentially collaborate more with

{{00:03:32}}
the financial services companies.

{{00:03:34}}
That's that sort of What I've seen
is a transformation in the the

{{00:03:38}}
way that regulators are dealing
with these types of problems.

{{00:03:41}}
It's a problem that needs
to be solved with data.

{{00:03:43}}
It's a problem that needs to
be solved with collaboration.

{{00:03:46}}
Excellent.

{{00:03:46}}
And how can banks leverage effective
financial crime risk management then

{{00:03:49}}
to drive a competitive advantage?

{{00:03:51}}
One of the sort of interesting
figures is two thirds of people

{{00:03:54}}
that are subject to fraud at a
financial institution will consider

{{00:03:57}}
leaving that financial institution.

{{00:03:59}}
So I think making sure that your your
organization is supports integrity and

{{00:04:05}}
security around the customer relationship
is an important differentiator.

{{00:04:10}}
It needs to be integrity and
security need to be synonymous

{{00:04:13}}
with your financial services brand.

{{00:04:16}}
And the way that you can protect your
customers, protect your organization

{{00:04:21}}
and ensure compliance obligations is
first and foremost driven by data.

{{00:04:26}}
We have more data.

{{00:04:27}}
We're at an inflection point in the
industry now, where we have more data.

{{00:04:31}}
We should be able to make better
inference on that data to support

{{00:04:34}}
the idea that we can stop more money
laundering and stop some of the

{{00:04:37}}
predicate crimes for money laundering.

{{00:04:39}}
So start with data.

{{00:04:41}}
And of course the data that we
need is driven by the problem

{{00:04:44}}
that we're trying to solve.

{{00:04:45}}
Here we're trying to solve some
of those predicate crimes, we're

{{00:04:47}}
trying to solve money laundering,
we're trying to prevent fraud.

{{00:04:50}}
So data needs to solve
those particular problems.

{{00:04:53}}
And then of course overlaying the data,
there's two, two ways I use the data.

{{00:04:57}}
The first thing is in
different types of monitoring.

{{00:04:59}}
How can I get all of the data
points that are indicative of

{{00:05:02}}
certain type of financial crime?

{{00:05:04}}
So for fraud for example,
something like account takeover.

{{00:05:07}}
The indicators are beyond
transactional indicators.

{{00:05:11}}
So make sure I've got the right data
supporting the right business use

{{00:05:14}}
case, and then how I present that
data to my analysts to make sure that

{{00:05:18}}
they're efficient and they're not
overwhelmed with false positives.

{{00:05:21}}
So there's some of the things that
financial institutions can do, and they

{{00:05:24}}
need to do that through the lens of not
introducing too much customer friction.

{{00:05:29}}
But also maintaining the managing
their risk and supporting everything

{{00:05:35}}
in that real time context.

{{00:05:38}}
Obviously there's a cost
factor there as well.

{{00:05:39}}
The cost of financial crime risk
management is rising, but the

{{00:05:44}}
big question is, does it have to?

{{00:05:45}}
It certainly doesn't have to and the
reason why it doesn't have to is because

{{00:05:49}}
there's more advanced technology to
make more accurate inference on the

{{00:05:53}}
data, because the perennial problem has
been I need more people because I've

{{00:05:56}}
got too many false positives and, of
course now we have the data that can

{{00:06:01}}
give us more accurate detection and, we
can prioritize the cases or the alerts

{{00:06:07}}
that investigators are looking at to
make sure that they're using their sort

{{00:06:11}}
of spidey sense to actually detect and
prevent legitimate financial crime.

{{00:06:16}}
So the human capital doesn't need to
expand exponentially as transaction

{{00:06:21}}
volumes increase and as things happen
more quickly, as long as you're using

{{00:06:24}}
the right data, which is the fuel
that drives this risk management.

{{00:06:29}}
And then the right inference
techniques on top of that data.

{{00:06:32}}
That's how you can stay on
top of this sort of trend of

{{00:06:34}}
rising costs of financial crime.

{{00:06:37}}
Excellent.

{{00:06:37}}
And just to finish off quickly have you
got anything else in the pipeline as a

{{00:06:39}}
compliant bank that you can tell us about?

{{00:06:41}}
Yeah one of the interesting things
that we're working on is, because

{{00:06:44}}
we're overwhelmed with as a society,
we're overwhelmed with data.

{{00:06:49}}
One of the things that we're doing is we
use a lot of natural language processing

{{00:06:53}}
to curate and procure and curate data.

{{00:06:56}}
And then the really fascinating
thing is we live in a world

{{00:06:58}}
that's interconnected, right?

{{00:06:59}}
The interconnectedness of things.

{{00:07:01}}
And we're trying to draw together
all that data and show not

{{00:07:04}}
only if your customers

{{00:07:06}}
are exposed to risk, but also look
to look at proximity to risk within

{{00:07:10}}
graph analytics, and that can draw
together different types of data like

{{00:07:14}}
transactional data adverse media data,
PEPs and sanctions data, draw beneficial

{{00:07:21}}
ownership data, draw it all together.

{{00:07:23}}
So you can apply graph analytics and then
you can present this sort of network of

{{00:07:27}}
relationships to your analysts as they're
conducting their investigations and

{{00:07:32}}
everything can of course be updated at the
speed of financial services at this point.

{{00:07:37}}
Excellent.

{{00:07:37}}


{{00:07:37}}
Thank you so much again, Andrew, for
taking the time out to speak with us.

{{00:07:40}}
It's been a pleasure.

{{00:07:41}}
Yeah, my pleasure.

{{00:07:42}}
Nice to meet you.

{{00:07:42}}
Thank you.

joined by Andrew Davies
of Comply Advantage.

Andrew, thank you so much for taking
the time out to come and speak with us.

Just to get started, I'd like to
give a quick introduction to yourself

which means that we support our
organization in making sure our

solutions are consistent with market
trends and consistent with the needs

of our customers to support them
in managing financial crime risk.

And I've been in the space
for quite a long time.

So I've seen that sort of evolution
of, from when we started doing

transaction monitoring for
something like terrorist financing.

all the way through to where we
are today with more real time

payments and managing risk in the
context of those type of payments.

So what would you say is shaping
the financial crime landscape today?

So the first thing is criminals
will take advantage of any

So they're entrepreneurial, they're
not worried about different compliance

obligations, they're singularly
focused on committing financial crime.

So with the transformation of financial
services around the introduction of more

digital channels, with the advent of
more real time payments, money moving

more quickly, the criminals will try and
take advantage of that transformation.

Now that transformation is good, better
customer experience, a broader portfolio

of companies that are operating within
that financial services ecosystem,

Great services for corporates, for
institutions, and for individuals.

Criminals will try and take
advantage of that disruption.

That's sort of one dimension that's
shaping the financial crime landscape.

The other thing is the
regulatory landscape.

Broadly, regulators around the world
have, they're not just interested in

something as basic as money laundering
or fraud, they're looking at the

So there's been this movement from a
regulatory perspective to say, okay,

there is, there are these predicate
crimes which are particularly nefarious.

It could be human trafficking, they
could be the illegal wildlife trade.

So for example, 23 billion dollars
annually is laundered from the proceeds

50 million people are subject to
human slavery, so the regulators are

now focused on those underpinnings
to money laundering, so the

Criminals will try and take advantage
of that disruption, and then the

broader purview in support of a sort
of moral imperative, they're really

And what kind of actions are
global regulators taking to deal

With direction from things like the
FinCEN national priorities, certainly

the Monetary Authority in Singapore, the
FCA in the UK, and then the definition

of these predicate crimes from under the
sort of AML directives of the European

Union, that's brought to the fore
this sort of idea of making sure that

financial institutions and the broader
ecosystem of financial services companies

Now, there's we want to maintain the
integrity of the financial system, we

want to make sure that we're protecting
our customers, and we want to make

Right now, it's estimated that 2 5
percent of global GDP is laundered

So the regulators are now saying,
okay, let's try and solve some of

the fundamental problems and let's
potentially collaborate more with

That's that sort of What I've seen
is a transformation in the the

way that regulators are dealing
with these types of problems.

It's a problem that needs
to be solved with data.

It's a problem that needs to
be solved with collaboration.

And how can banks leverage effective
financial crime risk management then

One of the sort of interesting
figures is two thirds of people

that are subject to fraud at a
financial institution will consider

So I think making sure that your your
organization is supports integrity and

security around the customer relationship
is an important differentiator.

It needs to be integrity and
security need to be synonymous

And the way that you can protect your
customers, protect your organization

and ensure compliance obligations is
first and foremost driven by data.

We're at an inflection point in the
industry now, where we have more data.

We should be able to make better
inference on that data to support

the idea that we can stop more money
laundering and stop some of the

And of course the data that we
need is driven by the problem

Here we're trying to solve some
of those predicate crimes, we're

trying to solve money laundering,
we're trying to prevent fraud.

So data needs to solve
those particular problems.

And then of course overlaying the data,
there's two, two ways I use the data.

The first thing is in
different types of monitoring.

How can I get all of the data
points that are indicative of

So for fraud for example,
something like account takeover.