Reimagining Intelligence Management to Combat Financial Crimes at Scale

Client

The client serves as the premier national agency in the APAC region, specializing in managing suspicious financial transactions. As the central authority, it is responsible for collecting, processing, and analyzing this crucial data. Their findings are then disseminated to enforcement agencies and other Anti-Money Laundering (AML) regulators, both domestically and internationally. In its role as a key AML regulator for financial institutions, the client actively confronts the challenges posed by money laundering and terror financing by leveraging financial intelligence at both local and global levels.

Market Trends

Before understanding the challenges of the client, here’s a glimpse of the latest global trends related to compliance and regulatory landscape.

• Industries across various sectors have faced significant security breaches, causing disruptions at both national and international levels.
• These incidents have resulted in substantial financial losses, damage to reputations, and a decrease in consumer confidence.
• Historical events have highlighted numerous schemes and disasters, leading to the formulation of regulations and the creation of regulatory bodies.
• As regulatory requirements continuously evolve, the role of technology becomes crucial in ensuring effective compliance across industries.
• Transaction monitoring is a key part of AML compliance programs, allowing financial institutions to analyze and monitor transactions in real time.
• AI and machine learning (ML) are being used to analyze data and identify patterns that could indicate suspicious activity.

Business Challenges and Opportunities

The client processes a high volume of suspicious activity reports, and high manual effort used to be required for analysis. Automation of various steps was the need of the hour. These include:

• Collection and receipt of financial information for reported entities

All financial institutes are obliged under Prevention of Money Laundering Act, (PMLA) 2002 to submit various reports to the client; these reports contain activity based and threshold-based reports

• Analysis of financial information

Post receipt of reports, the client performs analysis of the information provided and creates cases based on the nature of the reports and suspicious transactions

• Dissemination of cases

Cases are created and disseminated to Law Enforcement Agencies (LEA) for further actions

• Financial intelligence

Scope of generation and dissemination of targeted financial intelligence done by leveraging emerging technologies

• Capacity building

Increase compliance and continuous capacity building within the ecosystem

• Formulate strategic intelligence

Generate strategic insights and implement proactive measures for the prevention of money laundering

LTM Solution

• NLP Implementation

LTM deployed NLP algorithms to analyze text in suspicious transaction reports, aiding in the classification and feedback process.

• Feedback Loop

Client was able to swiftly communicate with banks regarding the status of reported suspicious activities, ensuring proper case management due to automation.

• Regulatory Compliance

Accurate reporting for law enforcement and investigation purposes.

• Advanced analytics

To enhance case creation and processing of reports, LTM supported with advanced analytics.

• Strategic analysis lab

LTM and the client co-created a dedicated strategic analysis lab to help build a nationwide strategy for combating Money-Laundering & Terrorism Financing.

• Closing the loop

Provided feedback to improve reporting of suspicious transactions.

• Training & development

LTM set up a training cell for administering training on AML and combating financial crimes.

Business Impact

• Over 127,000 suspicious transaction reports disseminated to 18+ law enforcement agencies.
• 60% Increase in compliance and continuous capacity building within the ecosystem.
• Assisted and enriched collaboration with other Financial Intelligent Units and other Law Enforcement Agencies through digital channels.
• Rationalized reporting mechanism and format to facilitate ease of reporting and improve compliance.
• A 20% reduction in manual efforts for the officers, allowing them to focus on other important areas.
• A 30% increase in the accuracy of LEA predictions, which has reduced the report rejection rate.

Quote from portfolio leader

“At LTM, our use of advanced technologies and innovative solutions has transformed our client’s financial intelligence operations. By implementing cutting-edge NLP algorithms and advanced analytics, we have enhanced the efficiency and accuracy of suspicious transaction reporting. This collaboration has strengthened compliance measures and supported nationwide efforts against financial crimes. We are proud to aid our client in combating money laundering and terrorism financing, ensuring a safer financial ecosystem.”– Mohan Kumar, Senior Director – Banking & Financial Services

Email us at BFS.Strategy@LTM.com to know more.