Currently, most filtering systems raise alerts for between 0.5 and 10 per cent of payments scanned. Following tests against 359,000 payments messages from a global bank, HotScan Self Learning was proven to reduce alerts raised by more than 50 per cent â without reducing the accuracy or narrowing the net.
With regulatory bodies across the globe strengthening enforcement of sanctions filtering, itâs more important than ever for banks to contain the cost of sanctions screening. The Single European Payments Area (SEPA) scheme in Europe and the National Automated Clearing House Association (NACHA) in the US now require new types of payments to be scanned â not just cross-border SWIFT messages. Regulators have also emphasised that the risk-based approach used to monitor suspicious activity is not sufficient for sanctions. By eliminating a large proportion of manual checking, Logicaâs Self Learning solution substantially reduces operational costs.
âIncreased pressure from regulators to improve sanctions filtering and the need to drive down costs through greater efficiencies, means banks will need to rely on filtering tools that save time,â said Neil Katkov, senior vice president at Celent. âIn parallel they need to ensure that resources are being used to prevent violation of sanctions. Filtering systems that reduce false positives in screening payments will be critical for large banks seeking to optimise productivity and gain the most accurate results.â
âBanks are facing limited resources, tougher regulation and growing payments volumes. Filtering systems must therefore be able to scale-up to manage these challenges,â said John Evans, director of financial crime solutions at Logica. âWith some banks employing hundreds of people to review alerts, it is crucial that their resources are used in the most productive way possible. Our Self-Learning module is the only solution available that offers the combined benefit of a massive reduction in false positives without increasing monitoring risk.â
Logicaâs Self-Learning module, which is being implemented by one of the worldâs largest banks, is available globally as a licensed upgrade for HotScan users or as an option for new customers.