Page 45 - BF Cover February 2019

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Remedial Approach internally across the organization and externally from third
party sources, ensuring full consistent and robust risk
It should be advised to the concerned bank officials,
businesses about any fraudulent exports, imports attempted coverage. A best practice approach needs to focus on
by miscreants by using above referred Modus Operandi and multiple stages in the monitoring and compliance, with the
sensitize them about the instructions issued time to time ability to add maximum information so that all the fraudulent
by various agencies and adhere strictly to the guidelines possibilities can be nullified proactively. Big data analytical
given to them. They should use new techniques to improve technologies can be of great use in this context.
on their current controls, adding more data and context as
new data sources become available to analyse. With these new technologies, controlling alert volumes
becomes easier as more contextual analysis can be
conducted. This enables a multi-layered alerting approach
Data quality is the major issue with the banks' compliance
and the application of more advanced techniques on both
operations. Most banks are doing scrutiny of documents
based on the limited information available and comparison higher risk customers and/or high false positive scenarios,
of various papers and scanned documents. Banks are in turn helping to manage alert volumes and apply an
struggling with the poor data quality checks coupled with effective risk-based approach. Being alive to the risks, taking
due care to prepare and then ensuring diligent follow up,
the shortage of skilled workforce who can analyse this
will mitigate against the worst and helps to ensure that
information, leaving them burdened for compliance. There
is also an absence of any integrated platform where all the business reputations and profits are protected.
data available with all the banks involved in international
The followings are the general guidelines for preparing an
trade transactions can be shared and cross checked without
organization and its employees for a holistic view, as well
losing the confidentiality.
as giving guidance on specific transactional precautions
which should cause an organization to pause for further
Block chain and shared ledger are some of the technological
solutions some banks are experimenting with. Persons, who investigation and clarification before proceedings with a
transaction. Lastly there is advice on what to do when a
support the block chain, advocate that the technology will
fraudulent activity is suspected to have taken place or may
change the face of banking, helping lenders cut billions of
dollars in costs. Trade financing, a centuries-old banking still be live & on-going.
mainstay, may become ground zero for block chain adoption
because it promises to do away with paper invoices and the Holistic View
fraud that accompanies them-if banks can come together First and foremost is the need to educate and train the trade
around a joint platform. finance desk officers about being alive to the risk of fraud.
This must be an initiative that comes with clear support and
Spotting the nexus between buyer and seller is the key to guidance from the Top Management. Well prepared
combat these frauds. Technology can be of tremendous help organizations are at much lower risk of being victims of
in identifying these collusions and investigating these fraud, and are able to effectively protect both their
financial crimes by analysing buyer and seller's addresses, reputation and profits.
selection of commodities and countries, complex network
of subsidiaries, round tripping of funds and complex layering Complacency is the Fraudster's greatest ally when looking
behaviors. for a new target to make a play on, the risk of "Insiders"
being involved must be treated with equal seriousness.
Organizations should use technology to enable their
compliance more effective to combat the frauds and to The cost of being a victim may include financial loss,
monitor the transactions to gain a complete picture of reputational loss, business opportunities loss and investment
what's happening. Once they are equipped with all the data of time and resources to deal with a problem / litigation.
and information, they can start to take the necessary steps Persistent and enduring vigilance are required, because the
to monitor and analyse it. They can deliver a comprehensive Fraudsters will seek to come up with ever new methods and
end-to-end monitoring system that effectively connects data play to achieve their criminal designs.

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