<Insert Picture Here> Using Risk and Compliance as a Strategic Tool for Growth - Looking for Opportunities in turbulent times to Optimize and Grow your Business Peter Hill, Oracle Reveleus & Mantas
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Reputation Risk A Good Reputation is Vital in a Competitive Environment Compliance with Internal Rules and External Regulations Delivery to Customers Products & Services (Design and Documentation) Potential for Fraud and Money Laundering Liquidity Risk
Operational Risk Definition The Oracle Reveleus definition of Operational Risk is: Operational Risk represents the risks and threats to the successful achievement of corporate objectives Objectives like: Have an excellent reputation for performance and delivery No compliance breaches Benefit from fewer loss events In consequence achieve higher profitability How to stand out in a crowd
So Many Risks to Assess Legal Risks Financial Crime Compliance Risks Trading Risks External Risks Project Risks Using Key Business Dimensions, identify and assess multiple risks across different business units in one application Business Continuity / DR Supplier Risks Documentation Risks Health & Safety IT Governance Product Risks
Challenge How efficient are you? Document your present operations and assess your systems and processes Look for over-controlled and inefficient processes Use causal analysis to understand why losses and customer complaints occur Link losses to risks Generate improvement action plans Set target dates Monitor plans through to conclusion
Workshop Scenarios Scenario Analysis Identify, examine, and consider action about risks at a strategic level: Consider scenarios as: External threats e.g. competition, loss of key staff, weather issues, terrorism Temporary issues e.g. loss of electricity, public transport, medical pandemic, IT or communication failure Market disruption e.g. lack of liquidity, changes in economy Record outcome of workshops: 1. Consider relevance and potential impact 2. Determine necessary action 3. Periodically review Use workshops and a moderator
General Fraud Trends Fraud is a key operational risk affecting profitability and reputation Technical advancement and globalization of fraud activity Regulations and guidelines require increasingly tougher fraud prevention measures, especially for identity theft and account takeover Increased speed & sophistication of fraudsters create special challenges: Rapid growth in electronic payments - shortened window for detection More fraud perpetrated by organized crime rings, often in collusion with merchants and employees/insiders Complex, higher dollar fraud events occur across multiple channels and payment types. Funds often moved offshore where recovery is less likely Point solutions & a silo d approach result in exposure Detection capabilities limited to a specific channel or area of fraud Do not provide cross-channel monitoring within an overall fraud and risk management system Enterprise approach to more effectively fight financial crime Firms seek a single, better integrated view across accounts, customers and business lines -- Enterprise Fraud Management platform approach Immediacy of detection, recognition & interdiction of fraudulent events is paramount 8
Oracle Mantas Behaviour Detection For Fraud and AML Tested and Proven Engines Combine for the Right Techniques Against New Behaviours Profiling Profiling Text Mining Rule Patterns Rule Rule Patterns Link Analysis Sequence Matcher Mantas scenarios provide immediate coverage for major areas as: Anti Money Laundering Identity Theft / Account Takeover Employee / Insider Fraud Wire & Electronic Payments Fraud ATM & Bank Card Fraud Check & Deposit Fraud Sophisticated, industry-proven coverage configurable to meet current fraud management requirements today, as well as the emerging financial crime trends of tomorrow 9
Oracle Mantas AML and Fraud Solution Overview Fraud Point Solutions Oracle Real-Time Event Processing Collection Mgmt Systems KYC/CDD AML Employee On- Boarding Payments Systems Mantas Alert Correlation Engine Mantas Behavior Detection Engine Mantas Case Management & Reporting Regulatory Reporting Operational Risk Solutions Liability Risk & Mgmt Systems Source Systems Oracle Adaptive Access Manager Mantas KYC Sophisticated Behavior Detection to Detect Complex, Cross- Channel Behaviors A Centralized Financial Crime & Compliance Platform 10
The interconnected nature of KYC and AML KYC Collects customer information Verifies customer identity Assesses risk Public and Private Watch List Scanning Facilitates a review & approval process Assess the risk of customers throughout the lifecycle of their relationship with the firm AML Monitor transactions & behavior Generate profiles, using riskappropriate thresholds Analyze and investigate Alerts using robust graphical tools Powerful dashboarding and reporting capabilities Produce STRs KYC Investigation Continuous Comprehensive Monitoring Transaction Monitoring & Behavior Detection Risk Assessment
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The Players in Operational Risk and Compliance Different roles and different disciplines Common concerns: Potential for Losses, Fraud, and Regulatory Breaches Operational Risk Compliance Risk Audit Business Heads Oracle Reveleus Operational Risk Single Database Central store of bankwide knowledge
Operational Risk and Compliance Methodology A continuous process to improve the business enterprise 1. Record Corporate Objectives, Policies and Regulatory Rules 10. Collect KRI metrics and monitor against thresholds. Drive alerts. Check Risks & Controls 9. Check Cause of Compliance Incidents against Risks & Controls 2. Define Risks and Controls against Rules, Policies and Objectives. 3. Assess Create Alert Drive Improvement Action Plans 8. Record Compliance Incidents 4. Periodically Test Controls 5. Collect & Manage Losses 6. Manage Insurance Claims 7. Check Losses against Risks and Controls with Causal Analysis
Advanced Reporting: Executive Dashboards Ability to create dashboards across loss events, risks and controls, KRIs, regulations, and insurance. Create holistic views, and drill through the report to underlying data.
Conclusion Use Risk and Compliance as a Strategic Tool for Growth - Looking for Opportunities to Optimize and Grow your Business Become more efficient Look to streamline processes Guard against things going wrong through an Operational Risk methodology Protect against financial crime Value your Reputation
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