webinar: risk sensing and fraud intelligence
TRANSCRIPT
November 18, 2020
Webinar:
Risk Sensing and Fraud Intelligence
MODERATOR----------------------------------- PANELISTS ---------------------------------
Chua Choon HongHead of Compliance Solutions –APAC, Bureau van Dijk, A Moody’s Analytics Company
Shirish PathakManaging DirectorFintelekt
Bernard LawHead of FCC & MLROAirStar Bank
Devendra RaghavHead of Compliance and Internal Control, Qatar National Bank Group
CHUA CHOON HONG
Head of Compliance Solutions – APAC
Bureau Van Dijk, A Moody’s Analytics
Company
Choon joins Bureau van Dijk with over 15 years’
experience in business development for
Enterprise and Regulatory software companies.
Prior to Bureau van Dijk, Choon spent 3 years
at Nice Actimize selling AML and fraud
compliance solutions across APAC and worked
on developing the partner and alliance
ecosystem for Actimize and was their pre-sales
team lead in APAC.
Choon holds a Business degree from Singapore
Management University and a professional
certification with ACAMS.
Horizon Risk Scanning
Discovering Emerging Risk 1
You don’t know what you
don’t know…
…Until you step on it
of course
Early Risk Warnings
Early warning of potential compliance risk from signals from HQ
Jan 2019 Oct 2020
*Source Financial Times & The Business Times
Emerging Cross Border Risk
• Potential exposure to risk across region
• Risk sensing must cover a wider geographic and not just local news
• Mitigating risk management measures
*Source Taiwan News
Developing Risk Typology
• Use various window dressing methods to create impression of a healthy book of business
• Cover up weak financials to get credit facilities from banks
• Use series of smaller fraudulent transactions leading to major fraud transaction
• No prior money-laundering or fraud red flags
• Banks total exposure SGD 4.25B
Poll 1： Do you have an early risk warning system
in your organisation?
Risk Intelligence Gathering2
Those who don’t learn
from history…
…are doomed to
repeat it
OSINT Gathering
Generating insights through
a multitude of data sources
such as newsfeeds, social
media sources, blacklists,
Intelligence Gathering
Completing OSINT using global media intelligence
and global ownership data.
Global Ownership Data
Linking risk events to
corporate ownership network
and shareholder information
and financial statements
Global Data for Intelligence Gathering
Horizon Risk Scanning
Risk Sensing & Trends Analyses
OSINT gathering through an event /
location centric approach to understand
emerging risk coverage wider geography
in a timely manner
Analytics and Modelling
Risk assessment and scoring of individuals and
corporates through a data centric approach
Investigations
Perform target centric investigations for
entities that fall out of analytics and
modelling rules
Risk Sensing & Trend Analysis
De-duplication
Foreign Language
Domain relevance
Newsfeeds
Transcripts
Social Media
Risk &
Sentiment
Analysis
Thematic
Analysis
Entity
Extraction &
Relevancy
Articles
related to
Domains
Processing unstructured data to understand threats and risks
Extract entities
Entity relevance
Entity
disambiguation
Risk scoring,
categorization &
stages
Sentiment Analysis
Detect Emerging
Themes & Events
Rank Top
Themes, Entities,
& SectorsDynamic
Relational
Graph
Relevant
Articles
&
Risk Intelligence Operations
*Source: Moody’s Analytics
Key Takeaways
• Timely warning of early signals of risk
• Cover intelligence from as widely as possible.
• Go deep into the risk typology to learn from the modus operandi
• Overlay different data to gather deeper insights
• Operationalize the intelligence
Poll 2： Would you like a meeting or free trial to
understand how data and technology can help
you in Intelligence Risk Sensing?
BERNARD LAW
Money Laundering Reporting Officer
Airstar Bank
Bernard Law was the former Head of Financial
Intelligence Unit in Hong Kong and worked in
Hong Kong Police for 26 years on both FIU and
ML investigation.
He also participated in the APG work and been
the LEA/FIU assessor to the ME on Lao PDR and
Sri Lanka. He has also worked in the role of co-
head of IIWG in APG.
Bernard is now the Money Laundering
Reporting Officer (MLRO) at Airstar Bank, a
virtual bank operated by Xiaomi in Hong Kong.
DEVENDRA RAGHAV
Head of Compliance and Internal
Control
Qatar National Bank Group
Devendra Raghav is a Harvard (HBS) alumnus
and Chartered Accountant, having more than
26 years of exposure in Compliance and Risk
Management. He has worked at senior
positions in multinational banks like Barclays,
HSBC, UBS AG, Mizuho and HDFC Bank. He has
mastered his expertise in Corporate
Governance, Compliance, Legal and Risk
management functions consistent with board’s
strategic objectives.
Periodically, he publishes articles in leading
business newspapers. His perspicacious
knowledge works like a charm while taking
guest lectures in various leading business
schools, like IIMs.
DEVENDRA RAGHAV
Head of Compliance and Internal ControlQNB (Qatar National Bank) Group
INCREASE IN VOLUME AND GRAVITY OF FRAUDS
Sweeping changes in the scope and magnitude of banking
transactions
The emergence of hybrid financial products
Increasing trend of cross border financial transactions
Dynamics of real-time fund movement and transformation.
BENEFITS OF RISK SENSING
Detect emerging risks so that management can mitigate those risks
before it generate potentially significant damage or costs or require
higher investments
Identify emerging trends and thus enhance their understanding of
the risk/reward trade-offs inherent in value creation and improve
funding decisions and allocation of resources
You have worked with regulators and have
also been the risk & AML officer in big banks.
How do you see Fraud or AML trends?
Question 2
FRAUD AND AML TRENDS
No one signal can be seen in isolation
Existence of such signals does not necessarily mean that there is a
fraud
In case of fraud, several signals would appear simultaneously.
TRADE FINANCE RISK INDICATORS
Letters of Credit (LCs) are issued in favour of seller, whose name is not appearing in the list of suppliers.
The buyer and seller have warehouses/factories in the same areas.
The LCs are issued though the customer and the seller have been dealing for many years.
The transportation expenses in statement of P&L are lower as compared to trade transactions.
The beneficiary of LCs is a related party.
The transportation of goods is done through local transporters and not through approved transporter.
In case of beneficiary bank, the funds disbursed by discounting bills are transferred immediately to another
bank.
In case of beneficiary bank, the operations in the account are not commensurate with amount of bills
discounted.
The consideration amount in transactions is exorbitantly high as compared to peers.
How can technologies like Big Data &
Analytics help fraud prevention in the financial
sector?
Question 3
DATA ANALYTICS TOOLS CAN HELP ANSWER:
What happened?
Where did it happen?
How many times did it happen?
What is the volume / value involved?
What rules or thresholds have been breached?
Are there any non-compliance issues with contracts and anti-fraud
control gaps in processes?
BEST PRACTICES FOR IMPLEMENTING BIG DATA
FOR FRAUD PREVENTION IN THE FINANCIAL SECTOR
Start with small and specific uses for big data
Work with high quality data
Assess and plan for the relevant regulatory environment
Have the right mix of strategies, policies and skills in place.
Thank you!