Nasdaq Verafin introduces targeted typology analytics to fight financial crime

These destructive crimes are fueling trillions of dollars in illicit flows globally, with 2023 estimates topping $11 billion for terrorist financing and nearly $800 billion connected to drug trafficking, according to Nasdaq Verafin’s Global Financial Crime report. Leveraging more than 20 years of deep domain expertise in anti-money laundering (AML), countering the financing of terrorism (CFT) and fraud detection technology, Nasdaq Verafin continues to deliver innovative new approaches to help banks improve the efficiency and effectiveness of their AML/CFT programs and ultimately safeguard the global financial system from the multi-trillion-dollar epidemic of financial crime.

Different illicit activities have unique characteristics and red flags that are indicative of risk of the specific underlying crime. Nasdaq Verafin applies advanced AI techniques to risk-rate multiple pieces of evidence based on specific indicators of the financial crime typology to more effectively detect suspicious activity. This approach helps banks stay ahead of evolving threats and manage increasing regulatory expectations to align their programs to national AML/CFT priorities, including terrorist financing, drug trafficking, human trafficking, fraud and other critical money laundering risks.

Targeted Typology Analytics address an industry-wide pain point of high volumes of false positive alerts that result from conventional rules-based AML systems. In developing new analytical solutions, Nasdaq Verafin applies its proven approach from its highly performant analytics for Elder Financial Abuse and Human Trafficking that have proven to be more effective in identifying suspicious activity associated with specific crime typologies. Nasdaq Verafin’s targeted analytic to identify human trafficking activity delivers exceptional performance, with as few as one in four alerts resulting in a case investigation, and one in seven alerts resulting in a bank filing a Suspicious Activity Report (SAR).

“We are committed to delivering innovative solutions to help banks more efficiently and effectively fight evolving financial crime threats, while navigating an increasingly complex regulatory environment,” said Stephanie Champion, EVP and Head of Financial Crime Management Technology, Nasdaq Verafin. “Our approach provides a step change towards disrupting some of the most nefarious crimes that have deep economic and societal impacts and are severely impacting the financial industry.”

The new Targeted Typology Analytic for terrorist financing alerts financial institutions to the risk of funding for terrorist activities or organizations, by leveraging Nasdaq Verafin’s unique consortium data to identify shell companies used to move illicit funds. Following an extensive Beta program, the release of the terrorist financing analytic is expected to be released to its customer base of more than 2,500 financial institutions later this year. To further bolster coverage of threats, Nasdaq Verafin is currently partnering with Beta customers to develop a Targeted Typology Analytic to identify potential drug traffickers and leveraging its advanced link analysis capabilities to uncover drug trafficking networks.

Benefits of Targeted Typology Analytics:

• Delivers high quality results with fewer false positives compared to conventional approaches and broad rules-based systems, so investigators can focus on truly suspicious activities.
• Uncovers patterns of criminal activity with exceptional analytical performance by analyzing a wide range of behavioral, transactional, and third-party data, as well as insights from Nasdaq Verafin’s unique consortium data set of more than 2,500 banks.
• Contextualizes activity with visual investigation tools by providing investigators with the key data and context-rich insights needed to determine risk and expedite decisioning.
• Contributes to higher quality SARs by providing investigators with data and insights to enrich reporting of actionable intelligence to law enforcement.
• Optimizes efficiency with integrated generative AI Entity Research copilot capabilities to reduce time spent on manual research tasks and expedite the alert review process.
• Integrates into existing AML systems to deliver risk-scored alerts through API or as part of Nasdaq Verafin’s intelligent investigation solution with integrated case management capabilities.

“As an industry, we continuously need to challenge the status quo for how we fight financial crime and money laundering schemes – conventional broad approaches are no longer adequate to keep ahead of financial crime risk. Our AML approach maximizes efficiency with compliance automation, allowing banks to redirect resources on higher-value activities and more effectively fight financial crime with Targeted Typology Analytics,” said Rob Norris, SVP and Head of Product Strategy, Financial Crime Management Technology, Nasdaq Verafin. “That is the future of AML, and this new suite of detection capabilities represent the beginning of the next generation of detection capabilities on our roadmap.”

Earlier this year, Nasdaq Verafin introduced new generative AI capabilities with the launch of its integrated Entity Research copilot to help banks optimize compliance workflows and improve operational efficiency. With Targeted Typology Analytics, Nasdaq Verafin further builds on its proven track record of delivering banks’ innovative solutions to more efficiently and effectively fight financial crime.

For more information, visit: Nasdaq Verafin's Targeted Typology Analytics

Nasdaq Verafin, provides cloud-based Financial Crime Management Technology solutions for Fraud Detection, AML/CFT Compliance, High-Risk Customer Management, Sanctions Screening and Management, and Information Sharing. More than 2,500 financial institutions globally, representing more than $9T in collective assets, use Nasdaq Verafin to prevent fraud and strengthen AML/CFT efforts. Leveraging our unique consortium data approach in targeted analytics with artificial intelligence and machine learning, Nasdaq Verafin significantly reduces false positive alerts and delivers context-rich insights to fight financial crime more efficiently and effectively.