Lazo ILIJOSKI ASEBA AMLAnti-Money Laundering Solution

Agenda

Necessity of AML solution & Trends in AML

Major functional features

System Architecture

Overview of system modules

Business process for analysis of clients and their transactions

Case studies

The benefits of the ASEBA AML system

Why ASEBA AML?

Necessity of AML solution & Trends in AML

Global trends

State regulations

Reputation risk

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Solution

Reputational risk

State regulations

International standards

ASEBA AML - Major functional features

Integrated End-To-End solution for Money Laundering Detection and Prevention

Independent solution from the core banking system Risk profiling of clients and transactions Initial setup with more then 90 indicators for risk detection No limit of rules & indicators for risk determination Creation of new indicators and scenarios without vendor assistance Graphical interpretation of comparison of analytical data Sanctions list management Delivering accurate, prioritized alerts directly to desktop application

in real time Generating specific reports imposed by local regulatory authorities

and reports based on defined suspicious activity criteria Integration with external systems by using web service layer Integrated document management tool Audit Trail KYC Effect

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Modules of the AML System

Data Transfer Module

Sanction Lists Management Tool

Black list, white lists, custom sanction lists, on-line identification and control of transactions

Module for on-line authorization and identification

Risk Scoring Engine:

Clients & Transactions risk profiling module;

Management of Peer Groups;

Sub-module for creating custom indicators;

Sub-module for custom scenarios;

Sub-module for analyzing transactions relationships;

Ticketing System

Report & File Generator

Document Management Module - Exchange-Archive-Search Module for generated files and reports

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Logical Architecture

ASEBA AML System

Risk Scoring Engine

Customer Risk Profiling

Peer Groups Module

Transaction Risk Profiling

Custom Indicators

Scenarios Management

Analysis of transactions relationships

Sanctions List

Management Tool

Module for on-line authoriza-

tion and identification

Report & File

Generator

Document Management

Tool

Ticketing System

Data Transfer Tool

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System Architecture

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AML System

Database

Core Banking System

Module for importing data

Clients Accounts Transactions

Blacklists, internal lists

& PEP

Module for on-line authorization and identification

Report & File Generator

Module for exchanging and archiving files

Signing, verification &

searching through files’ content

Audit & logging of all activities

Module for scoring of transactions

Custom Indicators Module

Customer List Management Tool

Ticketing System

Custom Scenarios Module

Module for analyzing transactions relationships

Module for scoring of clients

Peer Groups Module

Enterprise Architecture

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•Control against blacklists•Executor details•Behalf of transaction

Performing Transactions

•Controlling mandatory fields and data validation•Gathering single transactions even they have passed through several steps within their life-cycle

Data Transfer

•Transactions Grouping•Re-creating groups of previously transferred transactions

Analysis of relations of transactions

•Risk Scoring of Clients and Transactions•Re-scoring of regrouped transactions•Automatically creating tickets (cases) for entities with high risk

Risk Scoring

•Review of scoring results•Result comparison•Manually creating tickets for suspicious entities

Analysis

•Mark as suspicious/non-suspicious•Submission of report to FIU (OPMLFT)•Storing into risk lists of clients

Final action

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Business process for analysis of clients and their

transactions

Data Transfer Module

Categories of data that is transferred from Core banking system to AML System

Clients Individuals

legal

Accounts

Transactions

Related persons Every type with weight factor

Reverse relationship

Level of relation

Collaterals

Quality of data most important for analyses

Mail notifications

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Retail

Cms

Loans

International payments

Domestic payments

Fast transfer of money

Exchange office....

Scoring Engine

Designed to calculate risk factor for transactions and clients

Possibility for performing scoring by various risk schemas

Flexible for adding new indicators and rules or adjusting existing ones;

Creating new indicators by using a wizard;

Determination of risk factor based on more than 90 different rules and indicators

Possibility for mass risk-rating of all clients

Possibility for risk-rating of single client on demand

Interactive view and comparison of results of performed scorings

Ability to detect a broad range of money laundering scenarios

Decreasing number of detected false-risk cases by tuning weight factor for each of the indicators

Ability to perform testing and calibration of the schema by “Training Application”

Ability to integrate with external systems through web service layer

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FUNCTIONALITIES

• Daily scoring

• More than 40 rules & indicators

• Easy parameterization

• Automatically creation of tickets

• Influence of risk factor to clients

Risk factor of transaction

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Risk factor of transaction

Amount

Payment basis

Part of a group

Statistical deviation

Dormant or new

account

Client in a sanction

list

Country risk

...

INDICATORS

Analysis of transactions relationships and creating groups of related transactions

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Review of scoring results of transactions 1/2

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Review of scoring results of transactions 2/2

FUNCTIONALITIES

• Risk profiling of clients

• Scoring on predefined period

• More than 40 rules & indicators

• Easy parameterization

• Deviation of client

• Graphical view of customers

• Automatically creation of tickets

Risk factor of clients

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Risk factor of clients

Origin

Cash transaction

Freq. specific

transactions

Risk factor of

transaction

Risk Of products

Activity of entity

Related persons

Sanction Lists

...

INDICATORS

Review of scoring results 1/3

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Review of scoring results 2/3

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Review of scoring results 3/3

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Graphical review of scoring results 1/3

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Graphical review of scoring results 2/3

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Graphical review of scoring results 3/3

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Ticketing System

Built-in functionalities for opening, assigning and reviewing different types of tickets

Assigning many and various actions that should be taken until ticket is not closed

Possibility for creating new custom actions by system administrators

Automatically creating tickets for entities which score is higher than the threshold set by the Bank

Attaching of related documents to the ticket and browsing through their content

Generating report with conclusion about the performed analysis

Tracking case history

Mail notifications for new ticket assignment and reminding for due date

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Tickets Review

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Customer Lists Management System 1/2

Management of blacklists, internal and white sanction lists

Import of EU, UN & OFAC lists No extra costs for defining and

loading new types of blacklists No limit of number of lists Searching under various criteria:

Parts of name, Similar aliases, Similar names or address, Different character sets, Transpositions, Common language differences, Common errors in writings.

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Customer Lists Management System 2/2

Customer screening – under several methods based on Fuzzy Logic:

Trigram Like Levenshtein SoundEX Metaphone Chapman Length Deviation…

Show results above minimum matching percent specification

Proposed actions based on searching results

Possibility for cross-checks of all customers against blacklists

Possibility for defining different type of alerts for different sanction lists

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Transaction screening if there is no possibility for tight integration of external system to AML system

All functionalities can be used by external legacy systems by sending HTTP Requests or invoking web services

Module for on-line authorization and identification

On-line control of transactions

Online identification of client against sanction online lists

Monitoring of SWIFT messages against blacklists:

Scanning of all international payments against blacklists, PEP and other sanctions lists

Proposing action according to percent matching

Risk of transaction

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On-line identification and control of transactions

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Report & File Generator

Full coverage of all legal requirements defined for reporting in several countries

CTR report- cash transactions above limit, related cash transactions above limit Loans in period Borrows in period Additional data for client STR report

Automatically archiving in document management system Flexible definition of new file/report requirements - Report and file

generator Allows generation of various custom reports by technical personnel of the Bank

Allows for presentation of reports in different formats:

XML files Tabular overview Excel reports HTML reports

Document Management Tool

Key features:

Automatic sending of files Archiving of sent and received files – electronic archive Ability to sign documents before sending them Simple and quick access to exchanged documents Logging of individual activities Fast and reliable search engine of data Integrated with ticketing system Relations between documents

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Preview of archived files

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Module for creating custom indicators and scenarios

Designing, creating and testing custom indicators by using a wizard

No need assistance from technical person

Possibility to use two types of operators:

Comparative (=, >, >=, <, <=, <>, LIKE);

Aggregate (Sum (absol. values), Sum (+/-), MAX, MIN, Count).

Retrospective analysis of custom indicators

Tightly integrated to designing tool for scoring schemas (Smart

Modeler)

Enhanced monitoring based on custom scenarios

No limit on number for adding new scenarios

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Editor for creating custom indicators

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Technology Framework

Windows Server family 2003/2008 OS

SQL Server 2005/2008

SQL Server Integration Services

Internet Information Services

.Net Framework 3.5 SP1

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Case Studies

Ohridska Banka AD Ohrid (Societe Generale Group) Core Banking System: PUB 2000; Database: SQL Server 2005 AML System database: SQL Server 2005; OS: Win Srv 2k8

TTK Banka AD Skopje Core Banking System: PUB 2000; Database: SQL Server 2008 AML System database : SQL Server 2008; OS: Win Srv 2k8; Virtual Environment

Stopanska Banka AD Bitola Core Banking System: PUB 2000; Database: SQL Server 2005 AML System database : SQL Server 2008; OS: Win Srv 2k8

Centralna Kooperativna Banka AD Skopje Core Banking System: BIIS (DataMax); Database: Oracle 10g AML System database : SQL Server 2005; OS: Win Srv 2k3

Univerzal Banka AD Beograd Core Banking System: PUB 2000; Database: SQL Server 2005 AML System database : SQL Server 2008; OS: Win Srv 2k8 ; Virtual Environment

Investiciono-Komercijalna Banka DD Zenica Core Banking System: PUB 2000; Database: SQL Server 2005 AML System database: SQL Server 2005; OS: Win Srv 2k3

There are two more ongoing implementations

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The benefits of the ASEBA AML system

Effectively assisting banks to comply with AML regulations in different

countries and international standards

Possibility for upgrade and implementation of changes in business rules

without vendor’s assistance

Risk profiling of customers in any time

Prediction of customers behavior and achieving KYC (Know Your Customer)

effect by using comprehensive user interface

Historical data for customers risk deviation

Keeping records for risk cases and those that are reported to Finance

Intelligence Unit and appropriate treatment of the most risky customers

On-line monitoring of transactions and preventing illicit activities

Customer screening against sanction lists

Protection of cooperation with entities that are on blacklists

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Why ASEBA AML?

Fully compliant with legislative requirements Generation of report according to OPMLFT specifications

Proper transaction data interpretation

Turnkey solution Minimized necessity of technical personnel for configuring AML system;

Solution is easy expandable and can be easily integrated to external systems;

Future customization of the system without vendor assistance:

Creation of new and calibration of existing scoring schemas;

Creation of new scoring rules and indicators (even without help from IT staff);

Creation and customization of scenarios;

Creation of new customer lists;

Creation of new rules for transactions grouping.

Integrated environment Compatible authorization management

Possibility for single sign-on system

Integration with external Audit system

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