The Crime, Risk and Fraud Context

Everyone in the financial sector has been impacted in some way or another by the increased focus on regulation, risk management and compliance in recent years. Whether it is European MiFID II, FATCA tax rules from the US, global KYC and customer due diligence, Basel from the BIS, UK Liquidity Risk rules, or Solvency II for the insurance sector, new regulatory requirements are everywhere.

These have to be implemented against the potentially competing pressures of the demand for increased revenues, reduced costs and individual data privacy, and reducing the cost and impact of financial fraud. These have been key areas of focus for MPI since the creation of the firm with an understanding of the key importance of data in solving these issues - without better data quality even the most sophisticated crime, risk or fraud system will fail

Data for Financial Crime, Risk and Fraud

The data challenge for both businesses and regulation/compliance functions in the next few years is immense and comes in several forms. Firstly there are the key challenges of capturing the correct data at source on opening an account or regular review. This is both a matter of asking the right questions, but also knowing whether you are getting the right answers - financial criminals have no incentive to be truthful. There is then also the desire to satisfy multiple regulation, including regulations such as MiFID II which although live is still to be fully implemented.

It should also be remembered that this data is also required not just for new customers but also an institutions "back book" - a major challenge given this is the vast majority of your customers. The uncomfortable truth is that, for established financial institutions, the vast majority of financial crime and fraud originates from pre-existing customers. It is the ‘back book’ that hides the biggest problems.MPI Europe are able to help you with your risk and regulatory projects

Dealing with the back book entails a huge amount of work. Being able to analyse quality of the base data of the back book is an essential way to make achievable what could otherwise be a potentially overwhelming task. Given the large volume and potential for multiple, often long running, issues involved this task is not to be taken lightly. The key is to understand where and how to start. So how can the unavoidable data requirements of regulators be managed whilst still keeping implementation costs and risks under control? MPI has successfully run multiple large programmes of this type in large global institutions, and has practical tools and experience we can share to help you address this challenge.

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