In the previous blog in this series, we looked at the use of data-driven analytics to address problems related to customer exit data.  In some cases, we find that approaches to financial crime risk management stretch beyond pure compliance needs. For example, when it comes to sharing customer data externally as well as internally, it may be necessary to build a business case for such a transformation.

These are some considerations that should be factored into the business case:

  • False positives: The high rates of false positives across the industry are a longstanding problem. In some organisations and for some types of risks, our experience indicates that the false positive rate can reach as high as 98%. This results in organisations investing significant amount of investigation effort to closing poorer quality alerts. The financial institution would benefit from having more information to help identify bad actors at earlier stages in the process.  If the firm doesn’t have this information, it may well be that another financial institution does, as the other firm might have exited that customer due to financial crime concerns.
  • Onboarding: Customer onboarding is an expensive process, as it involves a series of checks that rely upon the quality of the internal and external sources available to the financial institution. If a prospective customer appeared in another institution’s list of individuals exited for financial crime, it could improve both the efficiency and effectiveness of onboarding.
  • Exit process: There are many reasons to exit a customer, including commercial ones, but the exit process remains a costly activity with substantial reputational repercussions if financial crime activities are involved. These costs can be quantified, reduced and, possibly, avoided, if the name and payment screening processes are more attuned to catch the actual perpetrators.

While all these points imply that the business case has a benefit, it is also important to call out the costs associated with the implementation of a solution addressing internal and external constraints.  For instance, the cost of the infrastructure required to share exited customer data across geographies and financial institutions can be daunting and may hamper plans to implement any form of data sharing. A consortium of financial institution may share infrastructure costs, in the process reducing false positives, avoiding the onboarding of known high-risk customers and lower the number of exited customers.

Accenture believes an innovation-led, digital-driven approach is a good way to start a conversation among financial institutions interested in exploring enhanced sharing of data on exited customers. In the next blog in this series, we will look at how technology can help the data sharing process.

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