How does quality data drive AML effectiveness in Compliance?
In a world with an abundance of data, it’s crucial to understand: What is useful? What is reliable? What is high quality? And what is effective? In the International Compliance Association’s ‘Quality Data: Driving AML effectiveness’ webinar, Martin Skeens, Third-Party Risk & Compliance Expert from Dun & Bradstreet, discussed with Julia Chin, Chief Regulatory Affairs Officer from xCube, and Louie Vargas, Lead Compliance Officer from Nordea, the main data challenges compliance departments face today – and the latest strategies to overcome them.
“Having high quality data in place and being able to analyse it in a proper way is essential for compliance teams to fulfil Anti-Money Laundering (AML) rules. This ensures that financial institutions can effectively prevent, detect, and report instances of financial crime and money laundering”, highlighted Julia. But what constitutes high quality data? And which components are most critical?
Based on research conducted during the D&B and ICA webinar among 500+ compliance experts from different countries around the globe; accuracy, completeness, relevance, consistency and timeliness are the most important components of data quality for AML effectiveness.
What aspects of data quality do you find most critical for AML effectiveness?
- Accuracy 31%
- Completeness 16%
- Relevance 9%
- Consistency 4%
- Timeliness 2%
- All of the above 38%
“It’s understandable why compliance teams want all the above options. The more elements that are listed and can be fulfilled, the easier the review process becomes. Having richer sets of data makes the review process quicker”, said Martin.
“I am not surprised that accuracy is the most important component,” added Louie. “Quality data is key. It helps us with our compliance, efficiency, risk management, and empowers us to be able to achieve more. Especially for regulatory purposes, you need accurate data.”
Challenges in maintaining data quality for AML
Having high quality data in place for your AML is one thing; maintaining it is another challenge altogether. Based on the research conducted during the D&B and ICA webinar, the primary challenge companies face in maintaining data quality is incomplete data (25%). Other significant challenges include: data stored in different formats and systems (17%), outdated or obsolete data (11%), conflicting or inconsistent data (11%) and duplicate data (8%).
What is the primary challenge in maintaining data quality for AML compliance?
- Incomplete data: 25%
- Disparate data (data stored in different formats or systems): 17%
- Decayed data (outdated or obsolete data): 11%
- Contradictory data (data that is conflicting or inconsistent): 11%
- Duplicate data (identical or very similar records within a dataset): 8%
- All of the above: 27%
“Having a system that cleans the data is key. It is essential for companies to combine technology and high-quality data”, explained Julia. Here are some key questions compliance teams need to answer in this context, according to the panellists:
- Have you introduced a data lake to serve as a single source of truth?
- How do you ensure that the data lake remains uncontaminated?
- What happens when one of the global ownerships change? How do you ensure that such changes are taken into account?
Dun & Bradstreet’s D-U-N-S® number is pivotal for identifying business entities and understanding ownership structures, providing a clear visualisation of company hierarchies and associated risks. Companies across the globe can be uniquely identified via the D-U-N-S® number. The numbers can be used to uncover information on corporate affiliations of business partners, ownership structures, a sector in general and much more. Having a unique identifier helps you visualise the organisational structures of suppliers and the risks these may pose, while maintaining an overview of how companies within corporate groups interact. D-U-N-S® numbers also make it easier to accurately identify key individuals within the organisation, such as CEOs, executive board members, ultimate beneficial owners, or directors, and source pertinent information such as revenue or number of employees that can form the basis for supplier analysis.
D&B Risk Analytics Compliance Intelligence is an intelligent KYC/KYB monitoring and compliance decision making solution, which leverages rich data sets on a global scale. By defining a policy in this highly configurable risk engine, compliance teams can automate their onboarding, accelerate due diligence workflows, and focus on what really matters. This enables them to increase compliance effectiveness while reducing costs and workload. “With D&B Risk Analytics Compliance Intelligence we marry technology and a broad range of data. This helps to identify false positives and to manage the risk in an efficient way”, said Martin.
Three best practice tips for compliance teams to maximise efficiency from the joint Dun & Bradstreet and D&B and ICA webinar, 'Quality Data: Driving AML Effectiveness,' as shared by the panellists :
- Evaluate your data and tech provider. Ensure you have high-quality data that is both broad and deep.
- Choose your data provider wisely. Look for a partner that helps you meet regulatory requirements and work closely with them to identify the specific data points needed based on your risk policy and appetite.
- Take a step back and focus on the fundamentals. Train your team on how to analyse the data in the most effective way to make informed strategic decisions. This will support you on your journey to make your compliance future-ready.
Accelerate your third-party compliance and evolve to Perpetual KYC with D&B Risk Analytics Compliance Intelligence. By defining your policy in our highly configurable risk engine, you can automate your onboarding, accelerate your due diligence workflows, and focus on what really matters. This enables you to increase your compliance effectiveness while reducing your costs and workload. It’s also the foundation for always-on compliance monitoring and Perpetual KYC. By combining our unrivalled ability to identify hidden ownership structures – with over 3000 watch lists and sanction lists worldwide – you gain deeper insight and the ability to proactively mitigate risk.
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Martin Skeens For the last 15 years, Martin has worked in the information industry, helping clients to make the most of their data and analytics. He supports companies to better understand who they are doing business with and where risk lies at a global level. |
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Louie Vargas With over 10 years’ experience in financial crime, sanctions, compliance, and payments, Louie is a seasoned professional who strives to protect and enhance the reputation and performance of Nordea, one of Europe's largest financial groups. |
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Julia Chin Multi-lingual seasoned financial industry professional with over 25 years’ experience in policy implementation with focus on client due diligence and operational risk management. |
