Beyond Compliance: A Data-Driven Approach to Financial Crime

We have helped a Dutch bank with over 500 billion in assets understand and realize their data ambitions regarding customer due diligence, sanctions, transaction monitoring, and fraud.

Challenge​

Entering the final stages of remediation, the bank wishes to develop a best-in-class data strategy in the financial crime domain. Having spent the last few years focusing on ensuring short-term compliance, the management team requested Zanders’ help to transition into an institution capable of tackling financial crime proactively.

This project aligns with a wider trend in the financial industry, where institutions, after addressing regulatory findings, invest in augmenting and automating their financial crime systems as a stepping stone toward an integration phase with a holistic view of client risk.

Solution

Zanders proposed a three-step approach:

• Step 1: Determine the current maturity state​
• Step 2: Work along with stream leads to determine ambition
• Step 3: Create and execute a roadmap to guide the bank through until 2027​

In Step 1, we determined the current state of data management regarding customer due diligence (CDD), sanctions, transaction monitoring (TM), and fraud. Since data is a multifaceted and all-encompassing element of an institution’s fight against financial crime, we divided our investigation into six key themes (see figure on the right). This structure allowed for better alignment with stream leads within the bank while also enabling comparisons with best practices across the financial industry.

During Step 2, we assisted stream leads in identifying pain points and future objectives, thereby developing ambitions for each of the six themes. These ambitions balanced the bank’s desire to foster a cutting-edge data policy while still being actionable given the available resources—technical and otherwise.

Finally, in Step 3, not only did we bring all ambitions together into a coherent roadmap defining the data strategy through 2027, but we also began executing this roadmap immediately, minimizing the time between vision and realization to maximize value creation.

Moreover, a key deliverable was a comprehensive overview of the primary dataflows between departments. Our experience shows that, in trying to ensure short-term compliance, financial institutions often inherit a legacy of tangled dataflows, where data origins are obscured and key features are redundantly recalculated.

The first step toward resolving this issue was to carefully analyze how data flows between different pillars (Transaction Monitoring, KYC, Fraud Detection, and Sanctions). Once identified, inefficiencies and vulnerabilities were addressed through improved architecture and governance.

Making the Data Transformation Visual

The broad scope of this project, combined with the large amount of data it involves, poses a risk that stakeholders may struggle to stay informed about developments and decisions.

That’s why, from the very beginning, we committed to visualizing the ongoing transformations by creating a Data Initiative Dashboard to track progress on key data initiatives. This tool enables leadership to monitor and adjust priorities throughout the execution phase and establishes a gold standard for reporting future initiatives in an informative and intuitive manner.

For more information, visit our Financial Crime Prevention page, or reach out to Johannes Lont, Senior Manager.