Actimize, a leading transactional risk software provider and a Nice Systems company, today announced the results of its latest investigative tools research.
The study, which was completed by 161 respondents responsible for AML and risk management at financial institutions from around the world, found that 53 percent of respondents "auto-close" suspicious activity alerts without fully investigating them and that a quarter auto-close at least 26 percent of all alerts generated without an investigation.
Actimize's Enterprise-Wide Tools to Fight AML and Fraud Peer Review found that 66 percent of financial institutions will have some level of consolidated fraud and AML investigative efforts within the next 24 months. While 77 percent of respondents currently report collaboration between fraud and money-laundering investigation groups, the majority do not share people between the two groups or have integrated investigation teams. Actimize experience suggests that the benefits of expertise within regional legal and regulatory environments appear to outweigh potential savings investigative 'generalists' may offer. Technology platforms, like Actimize's Risk Case Manager, can improve workflow and investigative efficiencies such as minimizing auto-close while maintaining the flexibility to support a diverse spectrum of analysts and investigators.
"It has been our experience that even regulator approved auto-close methodologies may negatively impact resources and productivity," says Amir Orad, CMO at Actimize. "It is likely that respondents' fraud and/or AML systems are siloed and generate a high number of false-positive alerts, or that firms do not have adequate resources or sufficient investigation tools to address all relevant alerts."
Most respondents reported needing to access multiple siloed systems during investigations. Actimize's Investigative Tools Peer Review also found that over half of all respondents are dependent on IT resources to build and run new AML and fraud reports. Actimize experience suggests that IT dependant firms either do not run the queries that they would lilike to in a timely fashion, or they are use expensive internal resources to do so.
Additionally, the study found that 55 percent of financial institutions do not use the latest generation of integrated investigative tools capable of automated monitoring and cross-channel analytics that can detect sophisticated financial crimes and unknown patterns across many databases and applications. These newer solutions greatly reduce the number of false-positive results generated, therefore lessening the burden on compliance and fraud prevention staff by delivering a smaller amount of more accurate alerts to investigate.
Orad added, "In the current economic environment, firms are looking for ways to enhance consolidation of relevant investigative tools and risk platforms will do just that. Firms should turn to cross-channel tools to improve investigator productivity and overcome the challenges disparate systems present."