Data analytics underpin KYC and Sanctions compliance and payments efficiency
Regulatory compliance is increasingly becoming a data-driven discipline. Having good quality data, and the tools to analyse it, is more important than ever. As outlined in two new customer case studies, Rabobank has discovered the benefits of using Compliance Analytics and Payments Data Quality from SWIFT to address the challenges of data quality and analysis.
Part of SWIFT’s Compliance Analytics portfolio, Payments Data Quality is a reporting and data analytics service which enables financial institutions to monitor the completeness of originator and beneficiary information in their SWIFT payments messages. It supports compliance with the requirements of FATF Recommendation 16 and related regulation, including the EU Funds Transfer Regulation 2015 (FTR 2015), which takes effect on 26 June 2017.
“Since November we have actively used the service to see how effectively we are meeting our payment regulations,” says Joyce Verschaeren, the bank’s head of operations control and services development. “It really surprised me how fast we were able to retrieve useful data to help improve our payment messages and check for irregularities. It is becoming one of our main tools for checking transaction data quality.”
Rabobank also uses Compliance Analytics to gain insights into the transaction flows of specific counterparties. This may involve finding out how many transactions have been exchanged with a specific bank within a certain timeframe, and identifying the currencies and message types involved. The bank also uses the tool to pinpoint clients that are sending transactions from high-risk countries.
With the data that SWIFT has, they are the only ones who could set up a tool of this quality. I don’t see how any other vendor could match the data and the way it is presented in the Payments Data Quality tool – that’s really unique
Natalia Koveshnikova works for Rabobank’s correspondent banking department and is responsible for tasks relating to AML and KYC compliance. She says that Compliance Analytics is used to monitor activities at the counterparty level and to track group-wide changes from month to month.
Compliance Analytics helps us to comply with specific regulatory requirements, particularly in the areas of KYC and sanctions,” she says. “It also gives us more insight into the transactions we are facilitating
Another area of focus is SWIFT’s Relationship Management Application (RMA), which enables financial institutions to define which counterparties can send them SWIFT messages. As such, RMA is an important tool for preventing unwanted transactions. Rabobank uses activity monitoring to flag up new or suddenly active RMAs in high-risk countries. “We want to understand the reason for these activities,” says Koveshnikova. “Most of the time we can explain them – for example because we know our client’s business is developing quickly – but sometimes this needs to be analysed further.”
Koveshnikova notes that the bank’s experience with Compliance Analytics is very positive. “It helps us to comply with specific regulatory requirements, particularly in the areas of KYC and sanctions,” she says. “It also gives us more insight into the transactions we are facilitating.”
Payments Data Quality was developed with a group of pilot users, including Rabobank, who worked closely with SWIFT to build a tool which will benefit the whole community. “As one of the pilot banks, what I really enjoyed was our close co-operation with SWIFT, and the way that improvements were quickly added into the system,” concludes Verschaeren. “With the data that SWIFT has, they are the only ones who could set up a tool of this quality. I don’t see how any other vendor could match the data and the way it is presented in this tool – that’s really unique.”