Countries all over the world are tightening money laundering rules, particularly as payments become more digital and sophisticated. To follow the rules in its own country and help it adjust to regulatory changes in other jurisdictions, Bank of New Zealand (NZDUSD) has embarked on a new project that will centralize and expand detection of money laundering and terrorism funding.
The security project will make use of an internally managed suite of Oracle (ORCL) services to spot and flag suspicious transactions, as well as adhere to the country's AML/CFT (anti-money laundering and counter terrorism funding) law that's scheduled to go into effect in June 2013.
"This automation allows us to collect and analyze our data in new ways, meaning our financial crime intelligence will be even more comprehensive and sophisticated — ready to deter and detect potential crime as early as possible," says Shelley Ruha, director of payments and operations for BNZ, who adds the decision to centrally manage the technology as opposed to outsourcing enhances the bank's control over its crime prevention efforts.
Like most banks, BNZ has become more active in mobile over the past year, which makes managing risk and security more complex. Its native iPhone app, which launched in 2011, is the most downloaded financial app in the country.
That's increased the speed of transactions and the amount of automated payments data. To meld that new reality of faster processing and channel diversity to crime prevention, the bank is using the Oracle system to centralize AML activities while accessing more information. Since it's a single platform, it reduces the number of external systems accessed during compliance management and activities such as surveillance, detection, event correlation, watchlist management and regulatory reporting. The new system helps reduce reporting SLAs and regulatory risk, since the system works across channels such as ATM, branch, web, contact center and mobile rather than relying on separate point solutions.
"We are already screening for money laundering and financing terrorism across all business operations, but this technology allows us to collect and work with data in new ways," Ruha says. "This means our financial crime intelligence will be even more comprehensive and sophisticated, and ready to deter and protect potential crime, whether it be international or domestic, as early as possible."
Ruha says the bank is also using social networking analysis as part of the strategy. Social networking analysis works by analyzing records of wire transfers, structured and unstructured text and regulatory reports to build out a record of users' financial activity and contacts. It's considered a more powerful method than a single-dimension search, which can fail to detect suspicious transactions made by third parties on behalf of an assailant. "Social media and analysis is one aspect, but BNZ uses a number of sources to identify anomalies in customer behaviors and account transactions. Understanding our customers and their needs is key to detecting what might be out of the ordinary," she says.