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Since 2008, financial institutions have been fined over $28 billion for money laundering and sanctions violations, according to EY. Given the hefty price of falling foul of regulators, it’s no surprise that banks are focusing closely on mitigating the risk of non-compliance – but complying with increasingly complex regulatory requirements is not straightforward. 

Effective screening takes time and money – and with the volume of alerts doubling every four years, compliance teams are struggling to keep on top of increasingly challenging workloads. Likewise, the soaring risk of cyberattacks and fraud makes it essential for banks to be proactive in mitigating the risk of any attacks. This means detecting, monitoring and/or blocking any potentially fraudulent payment instructions in a timely manner.

Leveraging data and analytics

Compliance: the data challenge

From sanctions screening to detecting fraud, compliance activities depend on fast access to high quality data. But in practice, payments data often includes incomplete, missing and/or unstructured data. This can hinder the effectiveness and efficiency of transaction screening and AML monitoring:

Effectiveness. Poor quality data is a significant hindrance when it comes to screening transactions. If the required information is not accurate or present – such as a missing country name – illicit transactions may fail to issue an alert, leaving the bank at risk of non-compliance. 

Efficiency. From an operational efficiency point of view, poorly formatted messages may require manual intervention, which reduces the efficiency of the screening process.

Likewise, where fraud is concerned, the ability to access data in a timely fashion is essential when preventing, stopping or recalling potentially fraudulent payments.

Data and KYC

Know Your Customer (KYC) due diligence can also present challenges where data is concerned. Sourcing and verifying the large volumes of data needed for KYC can be time consuming and unwieldy, as data typically has to be obtained from disparate sources and in multiple formats.

Leveraging data and analytics

To optimise both the efficiency and effectiveness of compliance processes, banks need to leverage their data more effectively and take full advantage of sophisticated analytics – all while delivering a better client experience. In other words, they need to embrace data-driven compliance.

Banks can do this in a number of ways:

Optimise data quality

As well as improving the effectiveness of screening and AML monitoring, better quality data also increases straight-through processing and reduces the need for repairs. And with higher quality data, institutions will be better able to benefit from advanced analytics.

Harness richer data

The adoption of ISO 20022 messaging provides the opportunity to harness richer and more structured data. As well as minimising false positives during the screening process, banks can take advantage of more structured data in order to detect fraud with greater precision.


Take advantage of analytics

Sophisticated data analytics enable banks to monitor their correspondents’ behaviour and reduce their exposure to high-risk transactions. By harnessing the power of machine learning, analytics tools can learn individual customers’ payment patterns and identify suspicious payment instructions – thereby augmenting more traditional fraud prevention controls.

Streamline KYC

Where KYC is concerned, banks are looking to move from periodic reviews to an event-driven approach, with due diligence carried out in response to changes to customer behaviour, market conditions or the bank’s own business. By taking advantage of shared KYC utilities, banks can access up-to-date KYC information whenever they need it.

The bottom line: by embracing data-driven compliance, banks can harness data and analytics more effectively. This enables them to reduce the risk of fraud and increase the accuracy and efficiency of their transaction screening – thereby minimising false positives, reducing compliance costs and mitigating the risk of non-compliance.

How can Swift help?

Our suite of data and analytics services can improve the quality of your transaction data, increase the efficiency and effectiveness of screening, and provide insights into your correspondents’ behaviour.