Don’t Create a Monster, Create a Beast

Halloween is right around the corner, and nothing is scarier than transforming your enterprise into a Frankenstein of incompatible tools and techniques. 

You started with the best intentions. You thought you chose the right tools, most attractive processes, and the best minds. 

But you soon found the amalgamation birthed a hideous creature of stitched-together processes, disconnected guidance, and opposing insights. It’s turned your transformation into a nightmare of rotting results, festering budgets, and decaying productivity. Instead of electrifying your enterprise with new life, you’ve created a monster.

Download the full infographic

Consultant’s Brain

Consultants are the experts, and you would expect them to be the brains behind your transformation. But they’re working with limited resources and time, trying to capture process details and then extrapolating anecdotes across your organization. They’re bound to miss things, which leaves your project wandering between options and never really making transformational impacts.

Miner’s Arm

Process mining and discovery techniques are slow, expensive, and highly manual. It’s an outdated approach that only captures a slice of a process based on how users interact with one system. It limits your coverage, misses steps performed in separate applications, and could pull your transformation in the wrong direction.

Software’s Arm

Digging for process details via APIs requires even more connections with IT, developers, and application vendors. It adds time and expense to your transformation project, and even more opportunities for messages to get lost and connections to break. Plus, each application requires a separate API connection, delivers data in different formats, and forces you to manually reconnect and reanimate the insights, adding even more delays.

Data Guts

Most companies truly don’t understand how they operate on a granular user level, and this lack of current state understanding is a major roadblock to transformation success. Process Intelligence helps eliminate nightmares by efficiently creating a dataset of user activity not previously available to kickstart strategic initiatives. Convert your process problems into big data solutions.

Bot’s Leg

RPA is great, but every organization struggles with scaling programs. Process assessment and prioritization delays development. Vendors have promoted screen recorders for task discovery, but they fail to scale and actually create more rework than traditional methods. Scary indeed. The only real answer to scaling your RPA program is adopting real process intelligence. Deploying FortressIQ means rapid assessments, and finding automation opportunities at scale

App’s Leg

Know what’s really scary?Most enterprise processes–especially the valuable ones–require workers to hop between software, move data across screens, or use multiple apps simultaneously. Trying to combine those steps into a coherent process using just log files and APIs is a recipe for disaster. Process Intelligence can give you the insights to start correcting the issue so you can understand today to improve tomorrow.

Stop the Madness! Turn Your Enterprise into a Beast

FortressIQ goes way beyond all of these scary, cobbled-together options to capture every step of every process, without expensive and disconnected tools pulling you in different directions. It brings your transformation to life with real-time, end-to-end process insights captured with DNA-level analytics across all applications, departments, and processes.

Don’t let your transformation turn into a monster. Use FortressIQ to make data-driven decisions that successfully propel your enterprise into tomorrow.

Transforming BSA/AML and KYC with Process Intelligence Technologies

The U.S. Bank Secrecy Act (BSA) of 1970 was one of the first Anti-Money Laundering (AML) and Know Your Customer (KYC) laws. It required companies and financial institutions to establish and report on internal controls and other measures put in place to prevent the facilitation of financial crimes. Other similar laws exist in countries around the world, creating a complex web of potential compliance issues for financial services companies.

Between 2008 and 2018, financial institutions worldwide have paid an estimated US$26 billion in fines and penalties as a result of violations to these regulations. That’s an average of $2.6 billion per year. However, government scrutiny of money laundering is now at an all-time high. Financial Institutions were fined US$5.6 billion in the first half of 2020 alone for non-compliance with AML, KYC, and related regulations. If the trend continues, it would represent a 430% increase over the previous ten-year average.

It is increasingly clear that compliance with these regulations is critical to the sustainability of every financial institution. Unfortunately, the traditional means of transforming your BSA/AML processes are woefully inadequate. But there are new technologies helping accelerate and increase the success of BSA/AML transformation.

Does Your AML/KYC Process Add Risk?

While it is the responsibility of all employees, partners, and suppliers to prevent an organization from facilitating financial crimes, Client Lifecycle Management (CLM) and Compliance are the two departments playing key roles in defining and implementing the required internal controls. CLM is the first line of defense within any organization. Compliance acts as the second line of defense, responsible for policy making, escalation, and resolution, as well as performing independent risk management. Auditors, the third line of defense, ensure any risk governance framework complies with regulatory guidance.

Three Lines of Defense Model

Before taking on a new client, a due diligence process is generally conducted to evaluate the client’s risk rating. It begins with a basic understanding of the client’s identity, the risk involved, and an understanding of their financial habits. Onboarding high-risk customers and politically-exposed persons requires enhanced due diligence with additional assessments of the client’s geographic location, source of funds, and purpose of the transaction, and may require ongoing monitoring.

This is an important task that typically happens as follows:

  1. Pre-onboarding checks are conducted by working with Sales, Risk Management, Legal, Compliance, and others to collect and review relevant client data, product information, and documents as mandated by the regulatory authorities.
  2. Teams then update multiple systems of record to ensure a client’s readiness to transact.
  3. Post-onboarding processes then include on-going client reviews and continuous monitoring, managing client and counterparty data and records, and potentially, client off-boarding.

This process can quickly become complex, especially at global organizations spanning multiple geographies with various policy interpretations, competing rules and regulations, and related data housed in multiple and disconnected software applications. That last point adds risk, especially when data is not integrated, thereby forcing considerable amounts of manual, repetitive, error-prone work. The result is increased operational, reputational, and financial risk.

Additional risks arise from policy interpretations and potentially incorrect execution of processes, which both depend on the experience of KYC analysts. It is indeed demanding for analysts to make critical decisions that require focused thinking while concurrently performing important yet mundane manual data-entry tasks.

Add it all up and your AML/KYC process is exposing you to more risk, which is exactly the opposite of what it is supposed to do!

Transforming BSA/AML with Success

Transforming any enterprise process can be daunting, for good reason. A study by McKinsey & Company indicates that a staggering 70% of large transformation projects fail to deliver expected results. Reasons may include unclear objectives, lack of leadership, and lack of commitment. But looking deeper, transformation projects are frequently derailed when teams underestimate process complexity. It’s a huge undertaking to identify the appropriate processes, perform detailed current state assessments, develop business requirements, and keep an eye on budgets. Then, for any transformed process, adequate training is required, and even minimal employee turnover can add to the challenges.

When focused on AML/KYC processes, the need for a successful transformation can be critical to your organization’s survival.

But help is available from point solutions such as Microsoft Power Automate, which uses Robotics and artificial intelligence (AI) to help organizations streamline, standardize, and automate routine tasks. Many financial institutions are also leveraging cognitive natural language processing (NLP), with focused solutions such as DDIQ by Exiger, to accelerate adverse media and sanctions screening processes related to clients.

AML/KYC platform providers can help streamline end-to-end processes. But successful implementation of these types of platforms largely depends on the quality of the business requirements and clearly defined compliance policies. It’s also dependent on the prevailing regulatory rules, final user acceptance testing and training. In reality, it takes many months for organizations to fully understand and effectively leverage these platforms, which adds further delays to already complex transformation projects.

FortressIQ is playing a key role in a successful AML/KYC transformation by converting a process problem into a big data problem. FortressIQ performs detailed current state assessments to provide near real-time process intelligence. It then provides the insights to make data-driven decisions.

Using computer vision, NLP, OCR, and deep learning algorithms, FortressIQ will:

  • Capture tasks at the most granular level, with no bias or blind spots;
  • Provide faster time to value by generating detailed, enterprise-wide process insights in just 2-4 weeks and without consuming worker time; and
  • Cost much less than human consultants, including eliminating documentation errors and the related rework.

Insights provided by FortressIQ can be leveraged by functional and transformation teams to collaborate on areas that matter: process enhancement, automation, and training.

Effectively managing your AML/KYC risk is critical to the success and reputation of your organization. Process intelligence and emerging technologies can help mitigate these risks, speed up the transformation journey, and enhance the customer and employee experience. It could also prevent a AML/KYC violation, which is becoming an increasingly expensive prospect.

Modernizing Corporate Compliance Programs with Data Analytics Tools

Incorporating data-driven capabilities into corporate compliance programs speeds response, extends coverage, and eliminates bias. But despite the value added by operational data, the pace of adoption has been glacial. That may be changing, however, courtesy of an unexpected stakeholder: the government. The result is that, as companies are scrambling to meet these new compliance expectations, they are finding surprising benefits.

Nudging Compliance to be Data Driven

This past summer, the U.S. Department of Justice instructed its prosecutors to ask companies under investigation whether their compliance teams have access to data. If so, they’re further asked if it is being used to test policies and monitor for risks. The authorities have even shown a willingness to cut penalties for companies that have implemented data analytics or monitoring tools into their compliance programs. This bias towards leniency is a major incentive for compliance officers to explore solutions that can provide access to financial and operational data.

While other parts of the businesses, most notably Sales and Finance, have long used data to drive decision-making, the adoption of analytics tools in Compliance has been slow. Budgets are often a constraint, but there is also the cultural issue of not wanting to uncover unknown issues.

Companies should be embracing the shift, however, and not only because data-driven companies tend to outperform their peers. According to Forrester Consulting, businesses that rely on data management tools to make decisions are 58% more likely to beat their revenue goals than non-data driven companies, and they see an 8% boost in customer trust. The benefits are clear and compelling.

Compliance-Centric Analytics Tools

One challenge for compliance officers in adopting data analytics tools is the lack of purpose-built solutions to support robust compliance programs. Some companies have begun the journey by simply hiring data scientists to support ad hoc exploration, or by tapping into a nascent market of third-party vendors with limited capabilities. A bespoke data analytics application may be appropriate, but it is a timely and costly proposition most companies are unwilling to tackle, instead preferring to delay implementation until solutions mature.

To help jumpstart compliance analytics programs, FortressIQ has adapted components of our next-generation cognitive process intelligence platform to serve customers today. The process archiving solution runs on-premise or in a virtual private cloud (VPC), and it can be up and running in less than 48 hours without any integrations. FortressIQ virtual agents are also non-intrusive, meaning they will not cause process disruptions or slowdowns due to network access or VPNs because they use very little bandwidth.

With FortressIQ, compliance officers can capture all the work happening right now and review it for insights when time or resources permit. They can also integrate FortressIQ insights into existing business intelligence platforms for broader and deeper analysis.

Automating Compliance in Our Current Reality

Today’s unprecedented business environment has forced organizations to adopt new distributed and remote work patterns at a breakneck pace, but that comes at the expense of existing compliance activities. Every organization has had to rewrite their playbook to deliver value in a new, uncertain world of broken supply chains, changing customer expectations, and evolving communication patterns. In addition, traditional compliance and process discovery methods in the form of on-site consultants or business analysts, which have typically been used to address strategic challenges, are currently not an option. That is especially true for those with a global, remote workforce.

Through trial-by-fire tactics, companies are triaging and re-engineering processes just to address the basic needs of their employees and customers. Countless hours, combined with trial and error, has enabled distributed teams to build tribal knowledge on new and innovative ways of delivery. But the need to overcome pandemic-induced obstacles has forced many companies to pause traditional compliance programs. That is unsustainable.

Anticipating that variations of today’s disrupted business environment will likely occur again, it is imperative that this business knowledge be converted into institutional comprehension. Compliance initiatives are an ideal starting point. And not just because of potential judicial leniency.