By Silvio Maemura, general manager of Pitney Bowes Brasil
Money laundering is an old and complex problem, but it has gained special attention from the public and companies in Brazil in recent times due to several scandals in public and private companies. Although there is a strong investment in the country made by banking institutions to prevent the problem - according to FEBRABAN, up to R$ 2 billion per year is invested in security systems and tools that aim, among other things, to hinder the money laundering process - still thus, the UN estimates that around R$ 200 billion will be diverted annually in the country through several different money laundering techniques.
“Laundering” money means hiding the illicit source of a source of income. In general, this is done through “orange” accounts and companies that carry out small transactions to avoid attracting the attention of financial authorities and banking institutions. The pulverized nature of money laundering schemes makes detection a long and laborious process. This scenario, however, is changing rapidly due to technological innovations that allow banks to have a much more complete view of their customers, history of transactions and suspicious movements.
The success of any money laundering activity depends heavily on the anonymity of the people and entities involved in the transactions. For this reason, the next revolution in financial information management is the ability to acquire a unique view of the customer, by aggregating data from different sources and delivering intelligent correlations with a low number of false positives. Most banks today have a still opaque view of customers - information about the customer's activities at the bank is usually in separate systems that do not communicate as they should.
This is because it is common for customer information to be allocated to different databases and customer profiles can appear in different ways for different systems - the intelligent integration of all data sources and the automatic crossing between them is already capable of showing discrepancies and behaviors that are classic signs of illicit movements. Through the compilation, tabulation and analysis of data from different sources, banks can now develop a comprehensive view of the customer and apply predictive analysis to create complex and accurate relationships even with the inconsistencies, errors, abbreviations and incomplete records that are common in the most databases.
Identifying, crossing and visualizing complex correlations are the main activities carried out by researchers responsible for combating money laundering. For them, the good news is that this type of technology will eliminate the need to manually remount long traces of transactions that can involve multiple countries, authorities and institutions. In addition to facilitating investigative work, disseminating the practice of a single view of the customer within the banking system will also make money laundering in the future much more difficult.
If the news is good for researchers, it is even better for financial institutions: this holistic view of customers not only gives banks the ability to more quickly identify suspicious movements and mitigate losses and risks, but also serves as a tool for new business - helping to understand the profile of each client, predict their future behavior and decide the best time to sell a new package of services or investment portfolio.
It is no longer today that transactions are carried out in digital media, but technological innovations that allow us to establish this unique view of the customer in a safe and efficient way, without compromising data privacy and security, are recent. The modernization of the financial system, which is already advanced in Brazil, promises to greatly improve our ability to combat fraud and money laundering, benefiting the financial system, the customer, and society as a whole.
“Laundering” money means hiding the illicit source of a source of income. In general, this is done through “orange” accounts and companies that carry out small transactions to avoid attracting the attention of financial authorities and banking institutions. The pulverized nature of money laundering schemes makes detection a long and laborious process. This scenario, however, is changing rapidly due to technological innovations that allow banks to have a much more complete view of their customers, history of transactions and suspicious movements.
The success of any money laundering activity depends heavily on the anonymity of the people and entities involved in the transactions. For this reason, the next revolution in financial information management is the ability to acquire a unique view of the customer, by aggregating data from different sources and delivering intelligent correlations with a low number of false positives. Most banks today have a still opaque view of customers - information about the customer's activities at the bank is usually in separate systems that do not communicate as they should.
This is because it is common for customer information to be allocated to different databases and customer profiles can appear in different ways for different systems - the intelligent integration of all data sources and the automatic crossing between them is already capable of showing discrepancies and behaviors that are classic signs of illicit movements. Through the compilation, tabulation and analysis of data from different sources, banks can now develop a comprehensive view of the customer and apply predictive analysis to create complex and accurate relationships even with the inconsistencies, errors, abbreviations and incomplete records that are common in the most databases.
Identifying, crossing and visualizing complex correlations are the main activities carried out by researchers responsible for combating money laundering. For them, the good news is that this type of technology will eliminate the need to manually remount long traces of transactions that can involve multiple countries, authorities and institutions. In addition to facilitating investigative work, disseminating the practice of a single view of the customer within the banking system will also make money laundering in the future much more difficult.
If the news is good for researchers, it is even better for financial institutions: this holistic view of customers not only gives banks the ability to more quickly identify suspicious movements and mitigate losses and risks, but also serves as a tool for new business - helping to understand the profile of each client, predict their future behavior and decide the best time to sell a new package of services or investment portfolio.
It is no longer today that transactions are carried out in digital media, but technological innovations that allow us to establish this unique view of the customer in a safe and efficient way, without compromising data privacy and security, are recent. The modernization of the financial system, which is already advanced in Brazil, promises to greatly improve our ability to combat fraud and money laundering, benefiting the financial system, the customer, and society as a whole.
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