Thursday, February 6, 2014 | 1:30 - 2:30 PM

Speakers:Mike Benardo, Jason Grasso, Ron King, John Solomon, Bill Ward

ConvergenceAchieving greater effectiveness and

efficiency by a unified approach

Chief, Cyber Fraud and Financial CrimesFDIC

Washington, DC

Mike Benardo

Chief, Cyber Fraud and Financial CrimesFDIC

Washington, DC

Jason Grasso

Chief AML OfficerScotiabank

Toronto

Ron King

Director, Threat FinanceWorld-Check

Washington, DC

John Solomon

EVP and Head of Financial Crime Risk ManagementUnionBank

San Francisco

Bill Ward

Chief, Cyber Fraud and Financial CrimesFDIC

Washington, DC

Jason Grasso

Proactively Identifying the Next Threat

• Know What You Do Not Know

• Horizon Scanning

• Data Mining/Surfing

Data Preparation for Exploration

• Assess data quality

• Entity Resolution/Link Analysis

• Aggregation of alerting processes

• Removing the noise to surface unknown anomalies

Operational Opportunities

• SAR process consistency

• Predictive Modeling to enhance efficiency

• Aggregation of investigations across functions, departments, geographies

Conclusion

• Criminals will find the weak link

• Payment and technology advances will drive further convergence

• Identify threats then determine process

• Convergence leads to better brand protection

Chief, Cyber Fraud and Financial CrimesFDIC

Washington, DC

Mike Benardo

Chief AML OfficerScotiabank

Toronto

Ron King

EVP and Head of Financial Crime Risk ManagementUnionBank

San Francisco

Bill Ward

“Perfect Storm"The Financial Services Industry has recently seen a convergence of threats coupled with an intersection of regulatory & law enforcement agencies

• Fraud• Cyber Fraud (Commercial payments)• DDoS/APT• Money Laundering• Public Corruption• Terrorist Financing• Economic Sanctions• Ponzi Schemes• Elder Abuse

• Prudential Regulators• DOJ• Federal Law Enforcement• State Regulators (e.g. DFS)• CFPB• FTC• SEC

Threats Regulatory/ Enforcement

Financial Crime Risk ManagementMission: To protect the employees, customers & assets of the Bank from money laundering, terrorist financing, fraud, robberies and other threats.

Program Management

Analytics & Technology

Operations

Governance Monitoring Protocols Surveillance

Policy Case Management Investigations

Accountability Data management SAR Filing

Risks Drivers Model Validation Alert / Case Management

Reporting / KPI (MIS) System Tuning Law Enforcement Liaison

QC/Testing Analytics Escalation / Adverse Action

Financial Crime Application Layers ExampleFunction Component Future

Business Intelligence and MIS

Workflow Management

Reporting / Support

Office Layer

Workflow Layer

AnalyticsLayer

Business Area

Enterprise BI Server, Enterprise

Miner, Soc Net

AlertGeneration Data Model

Data Mart

Analytics Business Intelligence

Enterprise Guide STAT, ETS,

OR, QC

Business Intelligence (BI)

- Alert Generation -- Transaction Monitoring -- KYC Event Triggering - Alert Pre-Processing- Customer Risk Rating- Data Mining / Risk Identification- Ad-hoc data provision - AML/Fraud Data Mart

Fraud and AML

ECM(Alert Mgmt)

- KYC on boarding and renewals- Alert management- Accounting Activity Research- Investigation and SAR Filing

-Reporting --Operations/Line Management --Senior/Executive Management- Support Office Processes

ECM(Inv & SAR)

ECM(CDD/EDD)

Data Integration

Integrated Technology & Analytics Financial Crime

AML and Fraud Technology Integrated Platform

Wor

kflow

Re

portin

g / S

uppo

rt Of

fice

Analy

tics

Transaction / Profile

Monitoring

Alert Management

Case Management

APEX - TBD(In-House)

Business Intelligence /

Reporting

Non-Preprocessing Alerts

Auto SAR

Analytics Infrastructure / AML Fraud

Data Mart

Debit Card

Check/Kiting

Internal

Alert Integration

System (AIS)FCA (Case)

Alert Mgmt System

AlertsCombined Alerts/Alert Mgmt

Reviewed Alerts

Referrals

Data & Alert Preprocessing

Data

Future:- Ad-Hoc- New Acct - Deposits- Cross-Channel

APEX - TBD(In-House)

Business Intelligence /

Reporting

Referrals

Raw Alerts Alert Preprocessing

Customer Risk Rating

Data

Data

CDDNew/

UpdateKYC?

10+ Other Alerting Sources

Other Sources:- eQAR- External Media

Alerts

Routing

Fraud AML

Work Groups:1) Info Logistics - Work groups2) Info Ops - Work groups

Interested Alerts

TriageAlerts

On-BoardingSystems

New Customers

Governance – Providing Board and Management Oversight (Example)

BoardLevel

MgmtLevel

Board of Directors

Risk Committeeof the Board

(RC)

Risk and Capital

Committee(RCC)

Fiduciary Risk Management

Committee(FRMC)

Compliance Risk Mgmt

Committee(CRMC)

Consumer Protection and Compliance

Committee(CPCC)

Anti-Money Laundering Oversight

Committee(AMLOC)

Operational Risk Management

Committee

Executive Committee

(EC)

Benefit of Convergence

1. Less chance of overlap with inconsistent results2. Manage regulatory expectations3. Efficient use of technology & human capital4. Leverage data for more accurate view of risk profile5. Safety & Soundness (CAMELS)

Director, Threat FinanceWorld-Check

Washington, DC

John Solomon

Your Questions

Please Join Us In the Exhibit Hall for a Networking Break

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