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Fubon Bank (Hong Kong) is a subsidiary of
Taiwan’s Fubon Financial Holding Co. and provides a wide range
of financial services including consumer and wholesale banking,
wealth management, hire purchase, securities brokerage and
investment services. With an expanding customer base, Fubon
Bank’s product lines and customer transaction volumes have
substantially increased in recent years. As well, different
product and business lines have differing risk levels which make
the monitoring of money laundering activities more complex.
In July 2008, the Hong Kong Monetary Authority (HKMA)
reinforced its anti-money laundering (AML) guidelines on
adopting statistical tools for transaction monitoring to combat
money laundering and terrorist financing. This further
highlighted the need for financial institutions to adopt
sophisticated and quickly adaptable AML solutions.
Fubon Bank’s existing in-house systems were
struggling to handle increasing business volumes and the new AML
requirements. It needed to deploy an AML system capable of
handling sophisticated analytical AML transaction monitoring for
current and rapidly changing money laundering patterns so as to
comply with the HKMA’s new requirements.
“We have to meet the different business needs of
every business unit in combating money laundering so we needed
an AML system which allows us to design different customer tiers
in each AML scenario for identifying suspicious money laundering
activities,” said Monty Yuen, Vice President, Head of Anti-Money
Laundering Section, Compliance Division, Fubon Bank (HK)
Limited. “For example, typical transactions in a retail branch
are usually smaller than those which take place in the wealth
management department. The threshold level of transactions in
the wealth management department is considered to be higher”.
Local Support and Depth of Experience
Upon evaluation of various AML vendors in the
market, Fubon Bank selected SAS to provide an integrated AML
solution platform. SAS has strong local pre-sales and consulting
support for the AML solution as well as local references and
case study examples in meeting HKMA’s guidelines on transaction
monitoring using statistical tools.
“Our existing AML monitoring processes have
required business units to spend a great deal of manpower for
various investigations through CIF record, and threshold
reporting downloaded from scattered source systems. It was very
inefficient and ineffective in the past,” added Yuen. “The
accumulative pattern analysis of the SAS solution automatically
assesses a customer’s risk on a daily basis, analyzing past,
present and expected activity across all accounts.”
Real-time, Efficient and Transparent Monitoring
The SAS Anti–Money Laundering Solution is an
integrated bank-wide AML system which can fulfill every
requirement in conducting anti-money laundering operations. By
implementing a SAS Anti-Money Laundering solution, Fubon Bank
will be provided with a Customer Due Diligence (CDD) module to
help front-line staff capture information regarding Know Your
Customer (KYC) Risk Assessment during the account opening
process; real-time name checking against the FACTIVA database
and internal black list to allow immediate interruption during
account opening; real-time filtering against all SWIFT messages
based on the SAS fuzzy logic watch list mechanism; and a
post-transaction risk-based monitoring framework including data
integration, data management processes, AML scenarios,
batch-mode transaction monitoring, AML investigation, risk
scoring and alert prioritization.
SAS will also implement data integration at
transaction, customer, product and channel levels from Fubon’s
systems for all high-risk transactions. The SAS AML statistical
analysis capability such as neural network analysis will be used
to monitor every transaction and its historical patterns based
on typical AML scenarios and risk factors. Typical scenarios
include abnormal frequent cash transactions, and transactions
between companies with very different business natures. Each
scenario will be filtered against all relevant sources of
transactions. The SAS AML investigation user interface will be
employed to facilitate AML case reviews with supporting
documents attached to the SAS AML system. AML MIS reports
including the alert review status can then be generated for
compliance manager and department heads.
Implementation of the SAS Anti-Money Laundering
system at Fubon Bank is expected to be completed in the third
quarter of 2009. “The key to the task is to closely follow the
HKMA guidelines and increase the overall efficiency of the
investigative process so that the level of false-positives is
minimized, thus allowing front-line staff to make quick and
informed decisions,” said Yuen. “SAS is capable of creating
automatically generated reports on suspicious activities which
increases efficiency and transparency in monitoring as the risk
managers no longer need to rely on front-line managers to
generate reports.”
Sophisticated Statistical Model Allows Faster
Detection
Advanced profiling and segmentation, pattern
recognition and predictive modeling techniques, inbuilt in the
SAS AML solution all sift through mountains of customer and
transaction data to detect those activities that appear
suspicious. Suspicious behavior patterns are ranked based on
numerous factors such as customer risk, scenario risk and
statistically derived probabilities, allowing investigators to
concentrate on the most relevant alerts.
With the adoption of the SAS AML solution, Fubon
Bank will be able to detect suspicious transactions faster and
more accurately, and therefore better allocate resources to
suspicious cases and provide investigators with the most
relevant information from a single AML system.
“With SAS’ renowned leadership in helping
financial institutions combat money laundering, we are confident
that SAS can provide long-term support for our future business
growth,” said Yuen.
About SAS
SAS is the leader in
business
analytics software and services, and the largest independent
vendor in the business intelligence market. Through innovative
solutions delivered within an integrated framework, SAS helps
customers at more than 45,000 sites improve performance and
deliver value by making better decisions faster. Since 1976 SAS
has been giving customers around the world
The Power to Know® .
SAS and all other SAS Institute Inc. product or service names
are registered trademarks or trademarks of SAS Institute Inc. in
the USA and other countries. ® indicates USA registration. Other
brand and product names are trademarks of their respective
companies Copyright © 2009 SAS Institute Inc. Cary, NC, USA. All
rights reserved.
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