ACAMS 2019 Vegas: The Inside Track (Day 1)
ACAMS largest event, the 18th Annual AML & Financial Crime Conference is currently in full swing at the Aria Resort & Casino in Las Vegas, Nevada. With over 2,500 prominent anti-financial crime professionals, law enforcement investigators, regulators, and government officials expected to attend, this three-day event promises a range of topics from public-private collaboration initiatives to the latest innovation in Artificial Intelligence for AML.
Arachnys are there as both exhibitors and attendees, keen to learn, share and network with like-minded individuals as well as hear from expert speakers on regulatory and compliance trends. We’re delighted to be part of the latest technological innovations on offer, as well as being able to demonstrate how our technology can assist institutions in investigating and preventing financial crime. Whilst we can’t join all the sessions, we can offer you some insight into what transpired in day one.
Day 1: What you (may have) missed
Themes & Industry Observations:
- Focus on customer intelligence and intelligent automation
- Increased emphasis on monitoring and real-time reporting
- Marijuana Related Business (MRB) and Blockchain solution landscapes are maturing
Panel Discussion: What’s New, What’s Next: A Regulatory Roundtable on Compliance Trends and Issues
With a strong panel featuring speakers from the Federal Reserve Board, the Office of the Comptroller of the Currency (OCC), the SEC and Federal Deposit Insurance Corporation (FDIC), this moderated panel attempted to cover and scrutinize recent and anticipated regulatory changes.
One theme that arose from this session was how the OCC are still considering ways to increase efficiency and effectiveness, whilst at the same time reducing the overall burden of the AML regime. Another, was that there is a common recognition that data quality is affecting scoring, monitoring, and effectiveness.
Other issues that were discussed include:
- Customer Due Diligence (CDD) Rule: a significant population of banks do not have a lot of certainty around what makes a good “trigger” for refreshing customers or beneficial owners — i.e. Ultimate Beneficial Owner (UBO) monitoring is still a challenge
- Algorithms: Banks don’t need to be able to explain every algorithm to regulators; the regulators really want to see consistent explanations of the inputs and outputs
- Costs: Most banks struggle to justify the cost of periodic Negative News checks relative to the benefit
- Policy: “It’s okay to change your policies” – as long as they’re efficient, effective, and risk based, we [OCC] will likely find that acceptable
- Data: It’s up to the bank regarding what types and what depths of data to collect in order to implement a given risk based approach (since BSA does not supply data-level specifics)
- Shared idea: institutional collaboration for independent data testing on behalf of smaller/community banks
Panel Discussion: KYD: What You Need to Know About “Know Your Data”
In a panel session for data management, this roundtable featured speakers from Refinitiv, Capital One and the University of the Pacific. Big Data and data-driven tracking when used in KYC, CIP, and beneficial ownership determination was a major discussion point.
Other key ideas that were discussed:
- KYC is KYD (Know Your Data): customers are just an amalgamation of sources and processes
- More data availability: We’ve generated more data in the past 2 years than in all of recorded human history. This increases the overall potential for more knowledge, but also raises expectations around what banks “should” know. This suggests that regulatory expectations will increase.
- Structuring unstructured and open data will always have translation / transliteration / transportation / transfer problems – if you feed that into modern AI/ML systems without governance and control and normalization, you’re in big trouble!
- Set of Challenges:
- Intra-system fragmentation: unresolved entities, piecemeal profiles
- Intra-system siloed design: data is not mutually intelligible or interoperable between systems
- Data Quality: ETL & data dictionary processes are different in different parts of the institution
- Prediction: enforcement actions focusing on data quality/lapse of consistent standards before end of 2020
- Good data gives you contextual baselines, which allows you to solve harder problems and ask better customer questions
Regulatory expectations remain the biggest challenge for financial institutions followed by getting needed resources according to attendees #ACAMSVegas during the regulatory panel. pic.twitter.com/88wKuG5Kk8
— Kieran Beer (@KieranBeer) September 23, 2019
Stay tuned for the inside track of day two. In the meantime follow the event on Twitter at #ACAMSVegas and if you’re at the event, please drop by booth #120 to meet the Arachnys team.