Automated Transaction Monitoring
01. The Challenge
N NIBC’s Department of Security Affairs was founded by Vinodh in 2005. It was an innovative solution to what then was a growing problem for the bank. NIBC was receiving an increasing volume of mortgage applications at the time, and a certain percentage of those applications were found to be fraudulent. Fraudulent mortgage applications were being rejected as they should be, but no further actions were being taken. Sometimes the fraudulent applications would return to NIBC, or the fraudster would try his luck at another bank. Vinodh thought it was important to fight this fraud proactively, and from this, the idea for the Security Affairs department was born.
Vinodh’s prescience came at the right time. Just as the Security Affairs department was being formed, additional legal obligations such as client filtering and transaction monitoring were beginning to be imposed externally. The volume of mortgage applications at NIBC increased so in 2007 Marga was added to the team. Marga brought extensive experience investigating fraud in the insurance sector to her new role in Security Affairs at NIBC. The department is now responsible for fraud investigation (detection, prevention, and sanctioning), client filtering (KYC) and transaction monitoring.
Before NIBC started using the BusinessForensics application, much of this work was done manually. Transaction monitoring involved generating data from the data warehouse using Business Objects and Excel files and resulted in static information. Weekly or monthly payments from clients reappeared on the list every time it was generated.Because of these inefficiencies and risks, NIBC decided to implement an automated transaction monitoring system.
“We had faith because over and over again it appeared that the system has many capabilities and it’s also analytically powerful — and, the benefit to us is that we’ve become very familiar with our own system.”
“The benefit for new customers is that there is now a proven tool that they only have to fine tune as per their own needs.”
02. Trust through Performance
NIBC, a streamlined organization, specifically wanted to deal with a small supplier.. That way they could be sure that they’d get the support they needed. The short lines NIBC has with BusinessForensics are a big advantage. It’s easy to get IT support on-site, and if this isn’t possible, remote login is available for system oversight. BusinessForensics was still in the start-up phase of their development when NIBC selected them. But NIBC had a great deal of faith in BusinessForensics.
03. Future-Proof Solution
NIBC wanted to adopt an automated and intelligent transaction monitoring system. They were looking for a self-learning tool. With BusinessForensics’ transaction monitoring system, the links between various entities are easily visualized. Not only does the system handle transaction data, but it also imports all data from loans and savings accounts. This makes it easy to compare the characteristics of the loans and savings accounts to the transaction in question upon receipt of an unusual payment. Transaction monitoring is a continuous process, and alerts are generated automatically. Before this system was implemented, all of these tasks had to be completed manually. The incident registration system also makes it easier to build a case if a suspected fraud is investigated. NIBC now has a far better overview of its risks and its workload. The reporting function is also a significant improvement upon the previous system. It allows Security Affairs to provide more insight to management about their findings and the trends they’re seeing.
In the future, NIBC wants to take much greater advantage of the self-training features of the application to filter out false positive alerts. They also intend to make use of the system’s ability to yield insights into integrity risk as well as to create risk-based rules for classifying customers.
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