These initiatives allow users to manage and monitor counterparty risk, both at a strategic level with the assessment of counterparty risk, and tactically through the implementation of additional protective measures for your core payments systems. These tactical solutions include payments risk management tools such as Payments Controls.
The increasing sophistication of cyber threats in recent years has required all financial institutions to re-evaluate the security and protection of their payment environments. In response to these challenges, SWIFT has developed the Payment Controls Services (PCS) to meet the need for a real-time solution which that can be tailored to meet each institutions’ unique business requirements.
The Payments Control Service enables subscribing institutions to screen their sent payment instructions safely, in-network, and before delivery, in order to detect illicit or unusual message flows. Users define their own monitoring policy, controlling parameters to enable timely detection and prevention of out-of-policy or uncharacteristic and therefore potentially high-risk transfer requests. This allows for messages to be blocked, or alerts to be generated when suspicious payments are detected, before they reach the correspondent.
The Payment Controls service is designed for seamless integration with existing business, compliance and operational processes.
Daily Validation Reports
As part of the Payments Controls toolkit, Daily Validation Reports are designed to complement users’ existing fraud controls by providing a daily overview of payments messaging activity (FIN flows). The reports provide an independent means of verifying transaction activity and detecting any unusual patterns, thereby enhancing the ability to identify possible fraud attempts and improving the possibility of cancelling any fraudulent transfers.
Based on SWIFT’s records of users’ payment transactions over the preceding 24 months, the Daily Validation Reports include:
- Activity Reports that enable institutions to see their aggregate daily payments activity and transactions by message type, currency, country, and counterparties (originator, sender, receiver, and beneficiary banks) with daily volume and value totals, and the value of the single highest transaction;
- Risk Reports that provide a focused review of large or unusual payment flows and new combinations of payment parties – allowing unusual senders, destinations and patterns to be more quickly and easily identified.
The reports are provided through a separate channel (in the restricted user section of SWIFT website) to users’ payments and compliance teams. This “out of band” access ensures that users are able to independently access independently sourced information through a separate channel, even if their own systems or operational staff have been compromised and their locally stored records have been obfuscated.