Fighting financial crime through a global anti-money laundering platform

Bangkok Bank uses advanced analytics from SAS to meet expanding anti-money laundering requirements for global operations and ensure compliance keeps pace with dynamic regulatory frameworks

Anti-money laundering compliance has become a crucial requirement for banks. Money laundering activities have a negative effect on national economies, and financial authorities around the world have put in place stringent requirements for banks to protect themselves against illicit funds entering the financial system.

The global nature of money laundering makes it a particular focus for Bangkok Bank, which is not only the largest bank in Thailand by total assets but holds a dominant position in financial services through its 300 international branches in 14 economies that include eight other Southeast Asian markets as well as China, Hong Kong, Japan, Taiwan, the United Kingdom and the United States. It also operates major international subsidiaries: Bangkok Bank Berhad, Bangkok Bank (China) and PT Bank Permata Tbk. It is these international operations – the most extensive among Thailand's banks – that have been key to Bangkok Bank’s AML integration strategy.

“AML compliance is my top concern,” says Suteera Sripaibulya, Senior Executive Vice President of IT at Bangkok Bank. This observation reflects the challenges banks face in managing their AML operations effectively, with no room for error.

According to IDC Customer Spotlight sponsored by SAS^[1], banks face multiple and varied issues concerning AML, including:

• A shortage of staff with the relevant skills.
• Numerous false positives that are returned by the multitude of incompatible detection and investigation systems.
• The weak integration of data sources.
• Traditionally a whole host of manual steps and processes.

Although these operational issues vary from bank to bank, the consistent challenge is how to ensure strict compliance with all the varying regulations in every market where the bank operates. In turn, this means having an accurate, reliable and up-to-date view of specific guidelines from each regulator.

In recognition of this challenge, Bangkok Bank decided to modernize its disparate and rule-based AML systems. Although the systems along with surrounding elements – processes, procedures and human resources – could still live up to the expectations of each local authority, the bank was increasingly cognizant of the need for transformation.

“We were looking at more advanced analytics solutions to replace our legacy systems,” Sripaibulya says. “We were looking for an enterprise solution that allows us to apply a more advanced score-based approach to risk-rate our customers; a tool to enable us to apply different threshold values appropriate to each segment in terms of customer type, risk level and product used; and most importantly, a solution that allows us to centralize AML decisioning in a standardized AML case investigation workflow.”

Systemic rollout

The answer was SAS Anti-Money Laundering. To specify the functional requirements that would lead to the creation and deployment of what it calls a SAS AML Global Image, the bank took into account global best practices and guidelines. These included standards like the Financial Action Task Force recommendations and the Wolfsberg AML Principles, as well as specific regulatory requirements local to each of the bank’s markets. The result was the most comprehensive and relevant list of business requirements for each location’s regulatory needs and banking activities, as well as defined minimum AML standards for the whole Bangkok Bank group.

Once the business requirements were consolidated, Bangkok Bank worked with SAS to translate them into the SAS AML Global Image, which refers to a set of AML capabilities and analyses that are analyzed to monitor and assess a bank’s AML compliance, made available to relevant users in the bank. The bank chose its Hong Kong operation – which has some of the group’s most stringent AML requirements – for the pilot project. This allowed the bank to develop, test, deploy and monitor everything thoroughly.

“Once we completed testing at the pioneer location, we built up our internal capability to manage the SAS Anti-Money Laundering solution, as we aimed to roll out the SAS AML Global Image to the remaining locations very quickly,” Sripaibulya says. “It is our guiding principle to consistently maintain the Global Image. All subsequent system change requests from any of our global operations would either be part of a local specification or added to the Global Image, allowing all other locations to benefit from them.

“The Global Image simplified our global deployment and use of SAS Anti-Money Laundering across all our operations. We also developed and deployed a specific SAS AML Image for our global headquarters operations in Bangkok to address its unique requirements.”

As the bank looked to prepare the organization for a global standard of compliance, its consultants worked alongside the SAS implementation and advisory team to help define the governance model, as well as roles, responsibilities and process flows to support the SAS Anti-Money Laundering system deployment and adoption.

“Looking at the project delivery, SAS provided Bangkok Bank with AML domain knowledge, best practices, project management, technical expertise and capable resources,” Sripaibulya says. “This aspect proved to be invaluable, and we consider it one of the key success factors when we look back on our journey thus far.”

The new AML program also required other bankwide changes. For example, AML was structured differently within the enterprise, as the program required new resources as well as new ways of working among compliance, business and IT.

Bangkok Bank took on compliance analysts who understood the SAS Anti-Money Laundering solution and customer due diligence (CDD) analytical model to ensure the models best suited to the bank were chosen. Additionally, the bank needed a strong data team to manage the data required for the model to function effectively. Business analysts were recruited to design processes and procedures for better system efficiency and control, and a skilled technical team now operates data extract, transform and load (ETL) tools to give enough focus for data-mapping exercises. The smooth collaboration between the IT ETL, data and compliance analytics teams has been another key to Bangkok Bank’s successful implementation of the SAS solution.

“With the support of the SAS team that coached us along the process, we were able to gradually learn, adjust and fine-tune the system to the point where we can do most of the tasks ourselves,” Sripaibulya says.

All requirements fulfilled

SAS Anti-Money Laundering has met the functional, process and technical requirements set by Bangkok Bank:

• Analytics-brokered risk mitigation. The SAS solution substantially increased the bank’s AML capabilities with its more advanced analytics techniques. Specifically, the customer risk-rating capability enables Bangkok Bank to use a score-based approach to assign AML risk levels to customers. Additionally, SAS Anti-Money Laundering’s transaction monitoring capability allows Bangkok Bank to apply scenarios and risk factors to detect potential suspicious activity against parameter threshold values defined by customer segment and risk level.
• Integration into critical workflows. Critical workflows now benefit from integration. Integrated AML and CDD case management workflow capabilities allow Bangkok Bank staff to improve their productivity for AML-related activities, and exercise better control of such activities. This is essential to improve case resolution times.
• Technical and delivery skills. SAS provided a complete set of technical tools for Bangkok Bank throughout the life cycle of the solution deployment, from development and testing to deployment, monitoring and maintenance of the solution.

Compliance is an ever-changing challenge

While Bangkok Bank’s AML platform has been rolled out to the head office and virtually all overseas locations, more work is in the pipeline to strengthen the bank’s AML operations. Bangkok Bank may soon streamline how data is used across SAS Anti-Money Laundering and two already-deployed applications, SAS Customer Intelligence and SAS Fraud Management.

Sripaibulya also emphasizes the need to address change.

“Because AML requirements are dynamic, we needed to ensure that whenever there is a change to AML requirements at any of our overseas locations, a process and controls are in place to ensure notification,” she says. “Then requirements can be analyzed and impacts assessed in terms of both process and system. Following that, we can initiate the change request, design and test, all the way through deployment and system maintenance. If we don’t follow this detailed process, we could at some point run into an issue of non-compliance, even though we got everything right on day one.”

Sripaibulya intends to build on what Bangkok Bank has successfully accomplished.

“Our intention is to have this project improve our capabilities on an ongoing basis,” she says. “And SAS will continue to be our partner on this journey.”

In recognition of innovation in global AML compliant operations, Bangkok Bank was named “Best in Future of Trust” at the IDC Future Enterprise Awards 2021.

[1] Source: IDC Customer Spotlight, sponsored by SAS, “Bangkok Bank Implements Truly Global Anti-Money Laundering-Compliant Operations,” July 2021, IDC Doc #AP762022X.