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Business Strategy: The Use of Big Data and Analytics in Anti–Money Laundering Programs

Business Strategy: The Use of Big Data and Analytics in Anti–Money Laundering Programs

This IDC Financial Insights report takes a look at the challenges and opportunities of using BDA to improve anti–money laundering (AML) transaction monitoring. Regulators are keeping the pressure on firms to improve (and document) the performance and design of their AML transaction monitoring systems. At the same time, criminals continue to devise new schemes to achieve their objectives while avoiding detection and arrest. Increasing amounts of data and advanced analytics are available to the firm that when combined can help improve the efficacy and efficiency of AML programs. As firms invest in data and analytics, they should be designing data to be reused so that the firms can monetize their AML-compliance investments by reusing the data for revenue and margin enhancement activities such as upselling and cross-selling programs.Bill Fearnley, research director, IDC Financial Insights, reports that "firms face increasing pressure from regulators to improve the anti–money laundering transaction monitoring and keep ahead of new schemes and tactics. Aggregated data and analytics can improve AML monitoring programs, and if designed with data reuse in mind can be reused to improve sales and marketing programs too.

Please Note: Extended description available upon request.

IDC Financial Insights Opinion
In This Study
Situation Overview
AML Monitoring Watched by Regulators and Financial Firms
Transaction Monitoring Modeling Process Steps
AML Transaction Monitoring Challenges
Big Data and Analytics, the 3rd Platform and Innovation Accelerators
Data Silos, a Challenge for Many Firms
Using Big Data and Analytics to Improve AML Transaction Monitoring
Customer Segments
Alert Risk Scoring
Scenario Typologies
Scenario Thresholds
The Approach
Using BDA to Build Better Traps to Catch Smarter Mice
Aggregating Data and Applying Advanced Analytics
Future Outlook
Essential Guidance
Actions to Consider
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