IBM and Dun & Bradstreet Figure Best Path to Mitigate Compliance Risk
The ever-changing regulatory compliance environment is creating an impending metaphorical avalanche for financial institutions struggling to manage the types of information and processes that are now required to prevent doing business with “bad actors.”
According to the “Global Anti-Money Laundering Survey Results 2017” from Dow Jones and SWIFT, “More risk executives report an increase in workload from complying with regulations requiring beneficial ownership identification than all other regulations, with FinCEN CDD Rule compliance creating the greatest increase in workload in 2017.”
Legacy manual processes in place today cannot scale to meet the new challenges in today’s regulatory environment. Financial institutions need to refocus their resources on the value-add they bring to market and work with third-parties who have deep expertise in sourcing, organizing, and relating required information for regulatory compliance.
As IBM’s Global Chief Data Officer Dr. Inderpal Bhandari and Dun & Bradstreet’s Chief Data Scientist Dr. Anthony Scriffignano recently discussed, these institutions will benefit by ensuring their processes address the three critical V’s of information – volume, veracity, and velocity.
We all know about the ever-increasing volume of data in today’s digital world. But in the regulatory compliance sphere, how do institutions get access to and synthesize the information (structured/unstructured, internal and external) needed to quickly and confidently onboard a new commercial customer? How does an analyst find the most relevant pieces of insight amid all the noise? AI platforms play a huge role in wrangling the overwhelming volume of data by enabling an automated process for content ingestion and identification across a wide variety of in-house and external data sources.
Once an institution has a platform to manage the barrage of information, they need to ensure the information they rely on to make compliance decisions is both accurate and up to date. Industry experts and regulators both recognize the value of leveraging trusted third-party data to fact-check the veracity of information provided by potential customers. Understanding who a business is and all its related entities (both legal and financial) is the core value proposition of a best-fit data partner – not the natural expertise of the financial institution.
The job of managing the truth about a commercial entity is made significantly more difficult by data velocity. Business information changes at an alarmingly high rate. Within one year, at least 20 percent of the core information about your customers can become out of date. New businesses are created every day, and existing businesses move, change their names, or fold. Without an understanding of critical changes in the data, institutions can make flawed compliance decisions based on stale, out-of-date information.
IBM Watson Financial Services and Dun & Bradstreet have been thinking about the challenges businesses face when attempting to understand their compliance risk within an expedited customer onboarding process. The result is IBM Financial Crimes with Watson and Dun & Bradstreet, AI-powered business insights for streamlined regulatory compliance.
Together, we’ll be at Think sharing our answer to the compliance challenge: an enhanced financial crimes solution – enriched with contextual business information and deeper insights into more than 110 million relationships between entities and people – to help organizations efficiently and accurately manage their AML and KYC processes.
By addressing the three V’s of information, the combination of IBM Watson Financial Services and Dun & Bradstreet are helping financial institutions get ahead of the impending compliance avalanche and reduce both their compliance risk and costs.