Recent Discussions
Uplifting sanctions/export controls and breaking anonymity
A Canadian national and a New York resident pleaded guilty this week to conspiracy to commit export control violations for their roles in a global procurement scheme on behalf of sanctioned Russian companies. Some of the electronic components shipped by the defendants were later found in seized Russian weapons platforms and signals intelligence equipment in Ukraine. According to the court documents, the defendants allegedly conspired to ship more than $7 million in dual-use US electronics to sanctioned Russian companies, shipping the components through front companies in several countries, including Turkey, India, China, and the United Arab Emirate, from where they were subsequently rerouted to Russia. As this and other similar cases highlight, sanctioned parties and organized criminal networks are growing more sophisticated and aligned in their techniques every day. 🔦 Breaking anonymity and overcoming obfuscation remains critical The illicit usage of Shell/Front Companies, transactions and shipments to non-sanctioned countries and entities, the presence of underlying collusion etc. have all made risk management in this space increasingly difficult. This has put an unnecessary burden on frequently separate investigation and analyst teams within financial institutions to gather data and make the connections. However, by bringing together internal and external KYC, AML and Sanctions data, intelligence and processes, Quantexa enables the comprehensive contextual monitoring of customers and counterparties throughout their entire lifecycle. This allows institutions to better identify and manage holisticrisk, inclusive of sanctions and the presence of evasion techniques, including the illicit usage of shell companies, professional enablers and gatekeepers. To see how technology, combined with better data sources and focused typologies have changed the way institutions can break through the anonymity so essential for sanctions risk management, please reach out or take a look at the below. ➡Breaking Anonymity Through AI: Sanctions, Shell Companies and Scandals (webinar on-demand) ➡Navigating Secondary Sanctions Risk: The Heightened Need to Mitigate Indirect Exposure (blog) ➡New FinCEN Advisory: Counter the Financing of Iran-Backed Terrorist Organizations (blog) ➡Navigating Global Sanctions: Technology Solutions for Asia-Pacific Compliance Challenges (blog)📚New ebook available: Learn Operational Efficiency with FIU Modernization
In line with the recent 30th Egmont Group Plenary focus on “The Next Generation FIU”, we are pleased to publish a collaborative transformation blueprint. This guide highlights key considerations on how FIUs can select and implement innovative decision intelligence technologies to enhance effectiveness, facilitate collaboration and tackle emerging typologies and risks. You can access the guide here: Learn Operational Efficiency with FIU ModernizationA Roadmap to Resilience: How Banks Can Leverage AI to Advance AML Capabilities
Pleased to share my latest article in The International Banker on how regulated entities can maximise their Compliance programme investment in AI - starting with getting their data in the best possible shape to inform any downstream model or process. You can find the article here:https://internationalbanker.com/technology/a-roadmap-to-resilience-how-banks-can-leverage-ai-to-advance-aml-capabilities/
Quantexa's SME newly released SME classifier - are you accurately identifying your SME customers?
Quantexa has introduced a new classifier for Small and Medium-Sized Enterprises (SMEs) based on European Commission guidelines, designed to scale for extensive legal hierarchies. This tool addresses the critical need for accurate SME classification, which plays a significant role in various sectors, including credit risk assessment, customer intelligence, and fraud prevention. SMEs are the backbone of the global economy, making up 99% of all enterprises in the EU and two-thirds of its private sector jobs. Their classification is crucial for financial institutions to model risk accurately, allocate capital efficiently, and tailor services effectively. Furthermore, SMEs are often prime targets for fraud, making precise classification essential for robust risk monitoring and protection. However, accurately classifying SMEs presents several challenges. One major obstacle is understanding an enterprise's legal hierarchy, which involves complex calculations of headcount, turnover, and balance sheet totals. The European Commission's definitions add further complexity, requiring precise assessments of ownership percentages and public body influence, where more than 25% ownership by a public body disqualifies an enterprise from being an SME. Figure 1: Required thresholds for SME classification. If an enterprise’s combined totals satisfy the given threshold requirements, then, in addition to some other checks, the enterprise can be classified as an SME. Quantexa's advanced technology, including graph traversal and entity resolution algorithms, facilitates the efficient analysis of these complex legal hierarchies. The Q Knowledge Graph algorithm ensures that large datasets can be processed quickly, enabling accurate and scalable SME classification. Read the full article here: https://community.quantexa.com/kb/articles/240-revolutionizing-sme-classification-quantexas-scalable-solution I would love to hear thoughts on SME classification and your perspectives! As a starter for ten, feel free to use the below questions to share your insights: What are the main challenges your organization faces in classifying SMEs accurately, and how does Quantexa help address these challenges? What future trends do you see in SME classification, and how might they impact financial crime prevention?
How to Grow Your Correspondent Banking Business - New Blog
Why is Correspondent Banking relevant for growing economies, and how can we foster these relationships to be safer, more reliable, and additionally grow the Correspondent Banking business ? You will find my attempt to answer these important questions in this blog post: https://www.quantexa.com/blog/how-to-grow-your-correspondent-banking-business/ To all Correspondent Banking professionals: please share your opinions. Is there anything that you would like to add? Let's open a dialogue about this relevant issue for more sustainable and equal economic growth of the world.
Top 25 global banks see 7.8% QoQ growth in MCap during Q1 2024
. Citigroup and Sumitomo Mitsui Financial stocks see over 20% growth . Indian banking major HDFC Bank loses over 15% market value . JPMorgan Chase continues to top for the eighth consecutive quarter The aggregate market capitalization (MCap) of the top 25 global banks surged ahead by 7.8% to $3.89 trillion quarter-on-quarter (QoQ) during the first quarter (Q1) ended on 31 March 2024, driven by expectations of interest rate cuts. Notable highlights include Citigroup and Sumitomo Mitsui Financial stocks recording over 20% growth, while HDFC Bank faced a significant decline of over 15% in market value. Despite challenges, JPMorgan Chase retained its position as the most valuable bank for the eighth consecutive quarter, reflecting resilient performance amidst evolving economic landscapes, reveals GlobalData, a leading data and analytics company. Read more here ... https://www.outlookseries.com/A0766/Financial/3765_Top_25_global_banks_7.8_QoQ_growth.htm
Reimagining Monitoring and Detection
Certainly, we’re long overdue to rethink, or even better, to start the discussion around the current landscape of transaction monitoring. Let’s get the topic started with a few key points: Does it make sense to continue with the way detection and monitoring have historically been done? What is the intent of current rule and scenarios in production? How has technology evolved to make monitoring more effective in surfacing predict offenses? Hopefully my new blog will inspire some thought or plant the seeds of innovation. Please have a read here: Reimagine Detection and Monitoring to Optimize AlertsAdvancing Correspondent Banking Insights: Managing Respondent Banks Risk
As a follow up to my previous blog on Managing non-customer risk in Correspondent Banking, I have written a new blog on Managing Respondent Banks Risk. 3 key points from the new blog are: Correspondent Banking Risks: The article explores risks in correspondent banking, covering both macro and micro aspects. FATF Recommendations: FATF advises correspondent banks to manage risks through updated customer due diligence on Respondent Banks, considering their customer types, and profiles, with a focus on leveraging technology. Quantexa's Solution: Quantexa's Decision Intelligence platform, using Entity Resolution and Advanced Analytics, offers a tech-driven solution for understanding and managing risks in correspondent banking. Read more in the new blog: How to Manage Correspondent Banking Risk - Quantexa
Don't miss our new 'A day in the life of... an Investigator' series 🔎
Did you know we've recently added a new section for investigators to our A day in the life… series? Check out the series (login required) to read about a typical day of some of the best investigators using Quantexa, as well as some of their top investigation success stories. Interested in contributing your story? Let us know at community@quantexa.com
A Tale of Two Investigations: Transforming Financial Crime Risk Monitoring and Investigations
The adoption of technologies to enhance financial crime risk monitoring has become ubiquitous within the banking sector. These technologies span a spectrum, ranging from the automation of fairly binary controls to the deployment of black-box Artificial Intelligence (AI) models. Regulators are increasingly advocating for organizations to embrace technological advancements in their fight against financial crime, as exemplified by: FCA, MAS, HKMA all have RegTech support initiatives with digital sandboxes to promote solutions to complex regulatory challenges; MAS provides RegTech grants for Singapore based FIs looking to enhance their risk management and compliance functions with the use of technological solutions; HKMA’s recent AML Regtech: Network Analytics report promotes the adoption of network analytics capability to strengthen the response of banks’ anti-money laundering (AML) systems to deception and other financial crimes. In addition to improving risk identification, many solutions are dedicated to enhancing the actual investigation process by eliminating manual, historically time-consuming and inconsistent steps such as data collation or narrative production for SAR/STR filing. These solutions hold significant appeal as they can streamline resources while maintaining comprehensive risk coverage. The benefits of risk mitigation and operational optimization offered by such tools are widely recognized and discussed. However, what is less frequently discussed is the need to transform the underlying investigative process itself. The most cutting-edge tools may fall short of their full potential if they are not accompanied by process innovations. Transformative technologies demand transformative approaches, that often includes a cultural and mindset shift, as well as a technical one. To illustrate this point, let's examine a financial crime case study through two different investigative lenses and how they can lead to materially different outcomes:
