They have just launched Compliance Analytics, a new business intelligence tool in its compliance services suite to help banks monitor and address financial crime risk. Through Compliance Analytics, banks will be able to analyse their own SWIFT traffic data to identify anomalies in behaviour, unusual patterns or trends in traffic flows, hidden relationships, and significant levels of activity in high-risk areas.
Compliance Analytics gives banks access to a single source of rich, standardised data, providing them with an overview of their SWIFT-based activity, including their subsidiaries' activities and all their activity with correspondents. The application will enable banks to identify and assess areas of risk, validate existing processes, and attain a global view of their SWIFT traffic. The application also allows banks to develop risk models, set alerts to highlight specific areas of risk within their business, and benchmark themselves against their industry peers.
"There are increasingly high expectations for financial institutions to implement policies and tools that will help identify and prevent financial crime activities," says, Luc Meurant, Head of Banking Markets and Compliance Services at SWIFT. "Compliance Analytics enables banks to analyse their existing SWIFT traffic data to detect spikes, outliers or possible policy breaches. This is a great new tool that can help alleviate some of the financial crime compliance challenges impacting the banking community."
SWIFT claim that their Compliance Analytics will be useful to a broad audience within banks, including group compliance, AML, sanctions, correspondent banking, audit, and risk teams. It complements SWIFT's existing Sanctions Screening and Sanctions Testing services, as well as its KYC Registry initiative which will go live at the end of the year.
Barclays joins SWIFT’s KYC registry
In March SWIFT announced that it had signed a Memorandum of Understanding (MOU) with a group of major banks, including Bank of America Merrill Lynch, Citi, Commerzbank, JPMorgan, Societe Generale and Standard Chartered, to jointly develop and use SWIFT’s KYC Registry, a centralised utility for the collection and distribution of standard information required by banks as part of their due diligence processes.
Now Barclays has joined the initiative to help develop a centralised utility to collect and distribute up-to-date standardised KYC information. Matt Tuck, Co-Head of International and Head of Financial Institutions Group, Corporate Banking at Barclays said: “Collaboration within the banking industry is key to finding solutions that tackle compliance challenges and costly KYC-related regulations. This initiative fits naturally with Barclays' drive to improve the on-boarding experience for clients and counter-parties, and we’re delighted to contribute to the shaping of an industry utility that will be able to drive efficiencies for all banks.”
But will corporates accept the new expanded role?
SWIFT is clearly aiming for a central role in helping banks and corporates reduce financial crime risk and comply with the new regulations. The new Banking Markets and Compliance Services at SWIFT will definitely help the banks in their efforts to comply with the increasing number of regulations.
SWIFT say that, “The KYC utility will provide a global platform of accurate information which SWIFT will host and manage, whilst member banks will have ownership of and responsibility for their own information.” But corporates are expressing concerns about the centralised KYC registries, not just SWIFT’s. Some corporates are asking whether they can request their banks to not give out their data. The other major concern is that corporates are not sure that banks will rely on other bank’s data, they suspect that each bank will still insist on having the KYC data direct from them.
The other wider problem is that SWIFT and the banks will need to convince the authorities that their procedures and systems are compliant, and that, if banks and/or corporates use them, they will be compliant. SWIFT and the banks are going to have to work very hard for corporates and the authorities to trust them.