Leveraging Cognitive Technology Capabilities for...
Transcript of Leveraging Cognitive Technology Capabilities for...
© 2016 IBM Corporation
Leveraging Cognitive Technology Capabilities for Risk & Compliance
Grace BrasingtonVice President, Global Banking and Financial Markets, IBM Risk & Compliance Cognitive Solution
June 2018
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Annual Spending on Regulatory Compliance
$160B+
$ 99B
Approaching
$270Billion
Regulatory fines
and sanctions
Costs of addressing
compliance
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Opportunities to Improve Regulatory Compliance with Cognitive
Regulatory Change
Management
Know Your
Customer
Anti-Money
Laundering
Conduct
Surveillance
Address constantly changing regulations and manage control requirements more effectively
Streamline customer due diligence and remediation activities
Enable more effective identification and investigation of suspicious transactions
Identify potential misconduct more effectively
Training Watson on
obligation identification
& tagging
Assisting with solution design, providing IP
accelerators based on customer engagements &
PRR BPO, applying processing expertise
Guiding expansion
beyond trade to broader
conduct issues
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Providing End-to-End Regulatory Compliance
Capture Regulatory Changes & Obligations
Define Policies, Procedures& controls
Assessments of Controls & Risks
Monitoring & Testing
Cognitive Processes Transformation
FinancialRisk
Know YourCustomer*
Anti-MoneyLaundering*
ConductSurveillance
Security &Cyber risk
Governance, Risk, and Compliance
PaymentFraud
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Regulatory Compliance Analytics
Licensable components:• Regulatory Analytics – based on Watson Cognitive Computing• Regulatory Library – a reference library of regulations, guidance and controls• Regulatory Compliance Management (RCM) – a control, governance
and visualization platform based on IBM OpenPages
Watson enables effective determination of controls required & assessment of internal control coverage
IBM Cloud Customer Environment/Infrastructure
RCA RCM
Desired Controls
(Imported from RCA)
Regulations
Other Good Practice Controls
Client Desired Controls
Good Practice
Controls &
Frameworks
ControlsObligations
Candidate Obligations
Validated and Tagged
Obligations
Existing Controls
(can be imported
from GRC)
Validation & Tagging
UI Components UI Components
Client Selected
Controls
Linked
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Watson Regulatory Compliance for Regulatory Change Management
Review workflow is
triggered
With WRC’s capability to integrate all data, facilitate mapping, and perform concept-search across federated
platforms, the solution can enable a transparent, actionable Regulatory Change Management Process
… and see the end-to-end
impact and resolution of the
change
Change Comes InNew or updated
regulation or a regulatory
event, such as a speech,
comes in.
Notifications TriggeredAll owners in the effected
compliance chain are notified of
the applicable change.
Legal RequirementsLegal SME interprets legal
requirements.
Compliance GapCompliance Lead identifies
potential compliance gaps.
RespondImpacted object owners
respond to compliance
committee and either an
action is taken to remedy gap
OR an issue is created
TrackProgram lead tracks
the issues through its
lifecycle.
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Conduct Surveillance with Cognitive
Go Beyond Rules Take Holistic Approach
Leverage behaviors and machine learning toproactively identify abnormalities and potential
misconduct without pre-defined rules
Integrated analytics, focused on total conduct across activities and channels. Provide
a 360o view for understanding Trader and Employee behavior
Machine LearningBehaviorProactive
ActivityeComms
VoiceTrade
URL: Understand, Reason and Learn
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Surveillance Insight for Financial Services
Fuse insights to detect suspicious activities
View linkages with instant drill-down & playbacks
Build employee profileswith personality & behavior traits
See alerts & investigationsfrom continuously updated risk models
Order
Trade
Execution
Reference
News
Social
Chat
Voice
Reduced cost of employee non-compliance & misconduct
Faster detection of sophisticated scenarios
Risk based prioritization of alerts and reduced false positives
Transactions
Communications
External
Su
rveilla
nce
Correlates across channels, applying cognitive & machine learning to proactively identify abnormalities and potential misconduct
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Impact of eComm on Collusion
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Applying Cognitive to Accelerate Due Diligence
Due Diligence
with Watson
Automated SearchAggregation of
External Insights
Entity Assessment
& Verification
Reduce compliance costs and enhance client on-boarding information and negative news reviews by using cognitive-powered robotic automation to streamline due diligence processes and ongoing screening requirements
Customer Risk
Rating System
Internal and
External Data
Financial Crimes Due Diligence with WatsonUtilizes cognitive computing technology to screen, extract, and link relevant content from structured and unstructured data sources to improve understanding of entities and related risk and dramatically reduce the time it takes to complete KYC activities.
Expand Here Expand Here Expand HereStart Here
Collect Customer
Information
Customer
Due
Diligence
Customer
Risk Assessment
Onboarding
Decision
Review & Refresh
Customer
Information
Enhanced Due
Diligence
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Applying Cognitive to Improve Alert Management
Accelerate alert investigations by using data from historical cases, better understanding entity and network risk, and applying experience-based machine learning
Financial Crimes Alert Insight with WatsonUtilizes data from historical cases, better understanding of entity risk, and machine learning capabilities to streamline thealert triage process, reduce false positives, accelerate disposition of alerts, and improve decision-making.
Expand to Here Expand to HereStart Here
Alert
IdentificationAlert Triage
Research &
Investigation
Disposition
DecisionSAR Filing
Transaction Monitoring
Systems
Alert Insight
with Watson
Aggregate Data to
Expand Observation
Space
Interpret & Prioritize
with Machine Learning
Based on Prior Cases
Streamline Research,
Reasoning &
Recommendations
AML Case Management
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We believe AI’s purpose is to augment human intelligence.
We will be transparent about when and where AI is being applied, and
about the data and training that went into its recommendations.
We believe that our clients control and own their data and the related
insights
We are committed to helping students, workers and citizens acquire the
skills to engage safely, securely and effectively with cognitive systems,
and to do the new kinds of work that will emerge in a cognitive economy.
Principles for Trust in the Cognitive Era