Financial services organizations across the globe continue to face growing pains in terms of managing compliance risk. Driven by factors such as an ever-increasing number of regulations and enforcement actions, many organizations are constantly playing catch up to make sure their risk management operations are optimized. Along the way, they are starved for the kind of meaningful and timely reporting that can provide actionable insights on the overall health of their financial crime and compliance risk – and in turn prevent financial crime, losses, and penalties. From speaking with our customers, we think that a number of these difficulties can be alleviated by leveraging robust visual analytics within risk and compliance teams.
Our customers’ focus seems to center around data access and reporting – for example, many compliance organizations may not have the information they need readily available in a timely manner. Worse, the data that they are reviewing is often stagnant – providing only an historical view rather than real-time insight. One organization I spoke to said that it could take approximately three months to put together risk and compliance reports and get the right people in the room to review them. As a result, decisions are made about past occurrences rather than the current reality.
Without an intuitive, accessible tool, risk and compliance teams turn to workarounds, such as spreadsheets, which are often inefficient, ineffective, and which rely on older data. These workarounds severely limit a team’s capacity to explore the massive amounts of financial crime and compliance data they have, creating significant risk from the “unknown unknowns”. Teams are unable to discover trends which can help them identify new risk exposures, which means they don’t know what events to prepare for or react to – and subsequently, they won’t know how it will affect them or their customers.
These types of business scenarios abound, and are exactly the types of issues that visual analytics applications are designed to address. Visual analytics, a new approach that is finding its way into new anti-money laundering, enterprise fraud, and surveillance software solutions, enable organizations to quickly understand the current state of an organization’s data and guide analysis to find hidden links in the data and the unknown risks through visual snapshots. Moreover, organizations then use visual analytics to gain actionable insights and take a proactive approach to risk management faster than they ever could have before.
There are numerous benefits to leveraging visual analytics, including accelerating the investigative processes and allowing users to go in any direction with their analysis. But simply stated, visual analytics can help prevent financial crime. By presenting an immediate and comprehensive view of risk, organizations gain a more complete understanding of the threats they face and become more proactive in their response to them. With a robust solution, users can also quickly create their own visualizations to see and explore their data, empowering them to operate more efficiently and intelligently than ever before.
Data Visualization tools are especially powerful when used in concert with alert and case management solutions. It becomes easier for Risk and Compliance Officers to incorporate visualizations into standard, best practice investigation processes. Thinking back to the organization we spoke to where this process took three months, it’s easy to see the benefits and return on investment institutions can gain at the outset with a strong data visualization solution.
In the end, powerful visualizations provide deeper insights and a better understanding of financial crime and compliance risks, enabling organizations to understand where they are exposed at any given time so they can improve operational decision-making, strategies and processes, resulting in a more proactive approach to financial crime. In addition, relationship managers, traders, investment bankers and other client facing and revenue-generating departments have had access and greatly benefited from visual analytic tools for quite some time. Fortunately, the financial services industry is finally moving rapidly to more visualization technology across all core areas of financial crime risk. This move will not only benefit the institutions, but also prove to be a great asset to both customers and the financial markets.
Donna Weiss has more than 15 years of distinguished product management and marketing experience in solution definition, strategy, enterprise application design, and new product launch. Prior to joining NICE Actimize, she served as Director of Product Management at Oracle-Hyperion.
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