SAS Hosts Forum on Anti-Terrorist Financing

The themes that were discussed during a recent Anti-Terrorist Financing Forum at SAS headquarters in Cary, NC, weren’t ones you normally associate with the issue. The words "passion" and "personal relationships" were mentioned by almost every speaker and panelist during the daylong event.

On Nov. 8, SAS hosted the third annual Anti-Terrorist Financing Forum. More than 200 bankers, regulators and law enforcement personnel met to share best practices to combat terrorist financing. Some of the nation’s most prominent terrorist financing and anti-money laundering experts were featured speakers. The event was sponsored by RBC Centura and Bank of America and was led by the US Attorney General’s Office and the North Carolina State Banking Commission.

Working Together, Looking Forward
US District Judge Frank Whitney of the Western District of North Carolina presented the keynote address. His presentation focused on the correlation between drugs and terrorism. Noting the dramatic rise in gangs, particularly Latin American gangs, in North Carolina, Whitney said, "You may not realize it, but gangs are foreign terrorist organizations (FTOs).

"The government has placed a heavy regulatory burden on the banking industry," said Whitney. "Some of you may think suspicious activity reports (SARs) are a waste of time, but they aren’t. The illegal profits from these FTOs are eventually remitted through banks, and the Department of Justice takes SARs very seriously. Money is the Achilles’ heel of terrorists, and it leaves a trail for the discerning eye."

Following that money trail and deciding if it is legitimate or not is a struggle for banks day in and day out. "I am absolutely convinced that the notion of partnership is the key to detecting terrorist financing," said Bill Fox, Senior Compliance Executive at Bank of America. Fox said banks and law enforcement agencies were walking down the same street, just on different sides of it. "We need to walk together and understand everyone’s perspective.

"The simple truth is, banks want to do the right thing, but they’re frustrated," noted Fox. "They can’t detect the suspicious transactions without help from law enforcement." When banks and law enforcement officers form tight relationships, it’s a win-win situation for both.

The Prevention Process
In addition to financial institutions, several government agencies were also on-hand to present. Michael Resnick, Supervisory Special Agent at the FBI, helped the audience understand what the government expects of financial institutions.

"The FBI needs information quickly, and to be most effective, we need it in electronic format," said Resnick. "We want to encourage banks to spot suspicious activities and give them the confidence to act on those suspicions via SARs."

Resnick said he wants people to develop personal relationships, so bank officials feel good about calling the FBI and alerting them that a report is on the way.

Prior to 9/11, the primary focus of the FBI was to investigate events that had already occurred. Now the FBI is tasked with stopping terrorism before it happens. That’s why it is crucial for financial institutions and the government to talk to each other. "We can’t do it alone," noted Resnick.

The Detection Process
Prior to the creation of anti-money laundering (AML) software, the detection of illegal transactions was hit and miss. "With increasing regulations, companies now want tools that allow them to do it better than the minimum requirements," noted David Stewart, AML Director at SAS. "We don’t offer a silver bullet, but we can find patterns of activity in your data if it’s there. SAS is good at identifying people who have previously flown under the radar."

Pam Tulley, Supervisory Special Agent at the NC State Bureau of Investigation, concurred, adding that relationships, again, are key to uncovering illegal activity. "SAS has it right with their tag line of THE POWER TO KNOW®. We all have the power; we just need to share our knowledge and stay on the right track."

Help from SAS®
Time and time again, SAS has implemented promised anti-money laundering functionality on time and on budget for banks worldwide. With a risk-based approach to monitoring customer behavior, SAS helps ensure regulatory compliance by:

• Establishing a robust data environment that supports all products, channels and lines of business.
• Providing a point-and-click interface that enables easy modification and creation of analytic scenarios.
• Scoring customers’ risk daily based on past, present and expected activity across all accounts.
• Using a proven implementation methodology that gets you up and running in a matter of months.

SAS goes beyond traditional, parameter-driven, rules-based monitoring systems by offering unique capabilities, such as addressing willful blindness by identifying entities that have multiple high risk characteristics, yet do not have transactions that warrant investigation.

Putting It All Together
Jim Candelmo, Assistant US Attorney at the Department of Justice, summarized the day’s events: "Today I think you’ve seen the challenges faced by both financial institutions and the government. And I hope you realize that we’re both acting in the best interest of national security."

If we create a new path, or streamlined system process, we can bridge the gap between the two institutions, he said.

"When the next attack happens, we [banks] will be asked, ‘Why didn’t you stop it?’," acknowledged Dan Soto, Chief Compliance Officer at RBC Centura. "I hope the information you’ve gleaned from this forum will help you spot illegal transactions and act with confidence in your communications or relationships with law enforcement officials."

For access to all of the video footage from the Anti-Terrorist Financing Forum, visit the Web site.