TRANSWATCHAn Overview

AGENDA• Transwatch Overview• Financial Crime Monitoring• Application Modules• Monitoring Flexibility• Existing Customers

THOMSON REUTERS ACCELUS

THOMSON REUTERS GRC BUSINESS

TRANSWATCH OVERVIEW

GLOBAL SCREENING - TRANSWATCH

• Transwatch is a flexible, transaction monitoring solution designed to identify suspicious behaviour

• Provision of an end-to-end solution for Know Your Customer (KYC), Financial Crime & Market Abuse monitoring

BENEFITS OF USING MONITORING TOOLS• Regulatory obligation to monitor• Monitoring as a business tool, not just a cost

– Often cheaper than manual monitoring, especially in the longer term

• Monitoring consistency– Maps onto your policies and procedures, maintains audits

• Basis for on-going dialogue with regulator– Information exchange, supporting information and audit

trails• Ability & agility to adapt to changing regulatory

requirements– React quickly & cost-effectively at a time of constant flux

• Ability & agility to adapt to changing business requirements– As your business changes and grows

TRANSACTION MONITORING - APPROACH• Your monitoring/surveillance system should

dovetail with all aspects of your compliance policies & procedures

• There is no “one size fits all” approach – it varies:– Characteristics of the business

• Retail bank, Corporate/Investment bank, Broker/Dealer, Fund Manager

• Size, Geographies, scope, strategies etc.– Regulatory requirements– Appetite for risk

• For some, electronic monitoring will be overkill

STRIKING THE BALANCE• Are the monitoring scenarios appropriate for your

business? – What are the rules actually doing?– Do I understand why I have this alert?– Can you exercise the necessary control to personalise

them for your requirements?• Does the solution truly allow you to focus costly

staff time effectively?• Is it cost-effective and sustainable?• If not...

– You are likely to create extra work for no benefit

OVERVIEW OF NAME SCREENING MODULE

SCREENING MODULE – KEY BENEFITS• SCREENS AGAINST WORLD-CHECK INTELLIGENCE• SCREENS CUSTOMERS & CORPORATES AGAINST

-SANCTIONS -PEPs -LAW ENFORCEMENTS -REGULATORY ENFORCEMENTS

• INTUITIVE CASE MANAGEMENT & WORKFLOW• PROTECTS CONFIDENTIAL DATA

• SECONDARY MATCHING – REDUCING FALSE POSITIVES• HIGH VOLUME BATCH PROCESSING

• INTEGRATED REPORTING AND FULL AUDIT • AUTOMATED & AD-HOC MANUAL SCREENING

WORLD CHECK INTELLIGENCE

KEY FEATURES

• 500+ SANCTIONS & WATCHLISTS MONITORED• STRUCTURED DATA ON HEIGHTENED RISK INDIVIDUALS

AND ORGANISATIONS

• 11 RESEARCH CENTRES - 350 ANALYSTS GLOBALLY

• COMPLIANCE WITH KYC, AML & CFT LEGISLATION• MONITOR BUSINESS RELATIONSHIPS

• IDENTIFY HIDDEN RISK WITHIN NETWORKS• PEP MONITORING AND SUB-CLASSIFICATION

BENEFITS• Increase effectiveness of your Compliance Team

– Focus human effort on key risk areas and incidents– Reduce the effort required to handle each case– Maintain the fullest possible scope of monitoring– Extend monitoring as regulations or business

requirements change• How? – flexible and configurable

– Streamlined data acquisition– Rules-based exception identification– Risk scoring of alerts and Cases– Workflow-based Case management

RULES BASED EXCEPTION IDENTIFICATION• Automated issue detection• Rules are able to review all the necessary data, not

just a high risk subset of data– Clients, accounts– Transactions

• Rules as complex as necessary to identify the exceptions– Extensible by you or us

• All rules are parameter driven– You own and control the monitoring scope and thresholds

etc.• Manage high exception volume using White Lists

RISK SCORING OF ALERTS & CASES• Keeps caseload focused and more manageable• Only activity that exceeds your risk thresholds is

highlighted– You set these thresholds– You configure/load the risk profile parameters

• All rules exceptions are still recorded– Ongoing effect on cumulative risk scoring by

trader/customer• Risk profiles built upon source data

– Clients, accounts, transactions etc.

CASE MANAGEMENT• Workflow saves time in case processing and filing

– Enforce your business procedures– Standardised report generation and submission– Full audit trail of all activity

• Maintains the context of any investigation– Makes the compliance officer’s life easier– Investigator screens present key relevant information– Reduces the time looking for and collating information

FINANCIAL CRIME MONITORING

EXAMPLE RULES• Account Open Withdrawal• Account Open Repeat Credits• Large Transaction• Large Cash Deposit• Large Cash Withdrawal• Large Cheque Deposit• Large Cheque Withdrawal• Large Inter-bank Payment• Large Withdrawal Without

Notice• In Out• Dormant Account• Repeat Cash Deposits• Repeat Cash Withdrawals• Repeat Cheque Deposits• Repeat Cheque Withdrawals• Repeat Large Withdrawals

Without Notice• Commission• Reporting Avoidance

• Remote Branch• Smurf Investor• Overpay Security• Fake venture• Early Redemption / Capital

Repayments• Penalty Interest• To/From High Risk Geography• High Risk Nationality/Residency• High Risk Products• High Risk Currencies• Blocked Currencies• Country Currency Combination• Blocked Account / Watched

Account• Sanctioned Customer• Account Value / Volume /

Velocity• Maximum Transaction• Maximum Balance

• Maximum Turnover• Maximum Velocity• Predicted Value / Volume /

Velocity• Unknown Customer• Address Change• Low Balance Cheque Receipt• Consecutive ATM Withdrawals• Debit Card Behaviour• Same Teller• Nominated Account Changes• Youth Account / Tax Exempt

MONITORING FLEXIBILITY

RULE PARAMETERS• Numeric parameters can be dimensioned

– e.g. a large cash deposit rule may have a different AMOUNT threshold based upon the combination of the account type and the customer type

Customer Type Parameter

Mass Market €4000

High Net Worth €12000

Small Business €20000

Counterparty €0

Customer Type Current A/C Deposit A/C Mortgage

Mass Market €4000 €2000 €1000

High Net Worth €12000 €10000 €2000

Small Business €20000 €15000 €0

Counterparty €0 €0 €0

RISK SCORING• You decide how to score, based upon your

experience of your business• You can apply a risk score to any of the following

source data– Client– Account– Transaction

• Risk scores can either be supplied Transwatch

Credit Status Score(1-5)

EXCELLENT 1

GOOD 2

FAIR 3

POOR 4

VERY POOR 5

default or blank 3

RISK SCORING – FINANCIAL CRIME EXAMPLE

Column Customer A Score Customer B Score Customer C Score Customer D Score

credit status GOOD 2 FAIR 3 3 VERY POOR 5

occupation TEACHER 1.2 DIPLOMAT 5 LAWYER 3.5 2

customer segment MASS 3 HNW 5 MASS 3 UNEMP 4

country of residency US 1 NG 5 RU 4 US 1

Total Score 9 84 59 21

Occupation Score(1-5)

ADMINISTRATOR 1.5

TEACHER 1.2

BROKER 4

LAWYER 3.5

DIPLOMAT 5

default or blank 2

Customer Segment

Score(1-5)

OAP 1.5

CHILD 1

MASS 3

UNEMP 4

HNW 5

default or blank 3

Country of Residency

Score(1-5)

US 1

RU 4

UK 3

AF 4

NG 5

default or blank 3

RISK SCORING

80%+

60%-80%

40%-60%

20%-40%

0%-20%

ANALYSER - EXCEPTIONS

APPROVED LISTS• Customers and Accounts can be approved (white

listed)– For all rules– Specific rules

• The Customer Notebook & Account Notebook display details of black list and white list entries– Users can easily add/change/delete these directly within

Investigator Notebook – in real time

EXISTING CUSTOMERS

ACCELUS TRANSWATCH - SOME REFERENCES

SUMMARY

TRANSWATCH SUMMARY• Saves time and increases effectiveness

– Focuses human effort on key risk areas and incidents• Rules-driven, Risk Based

– Reduces the effort required to handle each case• Workflow, tracking and audit• Approved standard Financial Report generation

• Transwatch Platform – Financial Regulator proven– In use Worldwide– Available on cost-effective, industry standard platforms

THANK YOUQuestions?