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Banking

Technology and Global Transfer Agency

We hear much of the latest and greatest technologies within the Financial Services industry and even Transfer Agency is not immune to these fashion, fads & changes (see Is Blockchain a disruptor or enabler for Transfer Agency?).  Each coming new technology offers the opportunity for Transfer Agency and Fund Distributors to address servicing dilemmas for Investors and Asset Managers. Despite recent bouts of doom and gloom around the existence of Transfer Agency, we see that firms are thriving and continuing to innovate their services.  We can safely put to bed the introspection and existential concerns that had bubbled in various threads on Transfer Agency within Europe and beyond. Indeed, looking at the Transfer Agency market, there are opportunities for those providing TA services to grow their offerings and, further, become an important value-add component of the Asset Manager.  This opportunity still exists even in the unprecedented climate as a result of the existing restrictions across the globe. Within the industry, we know that Asset Managers will partner with those Transfer Agents that help them support the Investor on their investment journey.  The ‘smart’ Asset Manager will therefore want to find the TA that offers an excellent, dependable service (including digital), which is consistent across all markets and Investor segments. Transfer Agents, in return, will gladly partner the ‘smart’ Asset Manager and will reap the benefits from a having a strong underlying technology partner who recognises that the Transfer Agent brings unique skills in servicing the Investor journey.  The skills and knowledge of Transfer Agents, when wedded with best-of-breed technology, can lift the Transfer Agent & Asset Manager together to new levels of service and market reach. There is no doubt that Transfer Agency is ripe for disruption given the plethora of legacy systems and cumbersome processes that are involved.  Many firms (as Providers and FinTechs) have focused on reducing the friction involved in some of the processes by looking at utilising technology in these complex processes. Here we see the likes of Market Infrastructure providers smoothen the processing of Deal Instructions; FinTechs address specific processes with limited added-value (for example Reconciliations).  The more complex areas, such as KYC, have long been a holy grail and multiple start-ups are using technologies such as Blockchain to make the process as painless as possible. These additions to the Transfer Agent will help improve elements of the journey, however, they also add challenges.  Transfer Agent’s technical environment will expand with these additional applications and integrations.  Applying this to an already creaking, legacy environment is suboptimal but is done for the sake of expediency. With the multitude of tactical solutions, Transfer Agents do their best to keep the lights on but there are constant Cost & Servicing pressures, not to mention ongoing local & regional Regulatory requirements.  But doing the best is now further challenged in the current climate and will need addressing in the new normal world. Consolidation of platforms into a single system enabled will no longer be a nice to have, but a must have for Transfer Agents to both survive and bring value.  In addition, Transfer Agents will need to effectively leverage the Cloud to maximise their savings opportunities as Revenue and Margins will be impacted for the foreseeable future. Further, with the increasing focus by Regulators to meet the needs of the next generation of investors who are digitally native and Global Citizens and protect PII, Transfer Agents will need to have a simpler environment to address this with Technology rather than current High Risk Operational processes that exist today. Not only are the future Investor wanting a nimbler, mobile driven service, they are also much more likely to be mobile in their career.  Adaptive Asset Managers have recognised this, as they now seek to have a seamless service for their Investor irrespective of the Investor’s or Fund’s Domicile.  Asset Mangers are now truly looking for the Global experience. Do Transfer Agents need to struggle by managing multiple platforms to cater for the Asset Managers they service?  Asset Managers demands are varied as they look to an ever more complex Investor base, but, at the core, its key is the delivery of services & experiences.  Over time, Transfer Agents have required certain platforms for certain markets and/or regions resulting in an overly complex environment where multiple systems overlap as they service specific countries/markets and products.  It is not uncommon to hear of even mid-range Transfer Agents having 5, 6 or even 7 systems for their Long Only Fund clients, and these systems only cover parts of the European markets.  To look at a Global offering requires bold decision making as it will require an honest of review of legacy systems and processes. As a leading provider of Transfer Agency Core platform software, Oracle has seen how Global Asset Managers are now looking for this truly Global offering.  As a result, Oracle is continuing to evolve its TA platform, FLEXCUBE Investor Servicing, to help those Asset Managers and Transfer Agents offer this Global service to Investors.  This evolution is also a step change, as it takes Transfer Agency into a place where it can be the foundation for the Investor irrespective of either the Investor’s or Asset Manager’s location. It is possible for companies to invest heavily in reporting layers to mask their underlying systems and provide a pseudo-standard package.  This has benefits of projecting a standard service to the outside world, but yet this author feels the investments may not be fully realised as the fundamental issue of platform complexity is not addressed. Digital layers and interfaces are vital to support Asset Managers, but with a myriad of systems underneath there is no certainty that this solution is scalable and can easily support the requirements of a truly Global offering.  It reminds us of the swan that appears serene on the surface but is expending massive energy underneath to move along at a slow but steady pace. There are, however, Transfer Agents that have accepted the challenge from Asset Managers to provide a seamless, consistent service for the Investor irrespective of location.  To do this, these Transfer Agents have recognised that they cannot effectively support this by having multiple systems within their ecosystem.  These TA’s have moved the dial by collapsing their Long Only Fund systems globally onto one system, with the exception of the US market. To do this, the core TA system needs to have the necessary broad & deep functions to service multiple jurisdictions, be scalable to handle Retail and Institutional clients and provide the vital consistent data entry & model for service excellence.  With Oracle FLEXCUBE Investor Servicing it is possible to attain this new target Global Operating Model. The question now for Transfer Agents is how do I support the Global Asset Manager efficiently and effectively?  Is it better to build a layer to mask the myriad of systems or is it better to have a scalable solution based on a core engine that can truly service the Local, Regional & Global Investor? Working with Transfer Agents & Fund Distributors Oracle can help identify the Value opportunities within the Organisation to streamline as well looking outward to their partners.  Oracle can help run quick and effective assessments to test various Value Hypotheses.  This Blog has been published on Funds Europe in the FundTech Spring eZine here: https://www.funds-europe.com/fundtech-spring-2020/sponsored-feature-going-global To learn more, feel free to message me to explore more, or have a conversation. For more information, please visit: Investor Servicing oracle.com/financial-services Subscribe to our Blogs: Oracle Financial Services Blogs: Sign up today Contact us: Email: financialservices_ww@oracle.com Follow us: Linkedin: https://www.linkedin.com/showcase/oraclefs/ Facebook: https://www.facebook.com/OracleFS/ Twitter: https://www.twitter.com/oraclefs  

We hear much of the latest and greatest technologies within the Financial Services industry and even Transfer Agency is not immune to these fashion, fads & changes (see Is Blockchain a disruptor or...

Corporate Banking

Virtual Account Management is Transforming Businesses and Relationships … and The Future Looks Bright

Jeffrey highlights the wide array of opportunities with VAM and where banks and their corporate customers are heading.   Ask a roomful of corporate bankers “What is Virtual Account Management (VAM)?” and you’re likely to get a variety of responses. And that is a good thing. VAM has the potential - with the right technology foundation - to be infinitely flexible with new business use cases imagined daily. It can deliver tremendous value to both corporates and their banking partners. Corporates stand to reduce cost and complexity and introduce new levels of automation through alignment of their banking accounts with their internal accounting systems. Banks, in turn, can strengthen vital relationships by elevating their service to address their corporate customers’ growing pains while reducing their own operational costs. VAM is transforming treasury – and the journey is just beginning. What good are virtual accounts? Banks have offered "virtual account" solutions for many years, but most of these offerings were for specific purposes and targeted customer segments. Oracle has adopted a more holistic approach with VAM to encompass numerous business propositions and use case scenarios. For Oracle, VAM is about the challenges faced by both corporates and banks for cash management efficiency. It goes well beyond the perceived standard of virtual IBANs or virtual reference numbers and offers more than just efficient receivables management. VAM encompasses payables and receivables including On Behalf Of capabilities, corporate In-House Banking, real-time liquidity and management of client funds. For whom are virtual accounts useful? Historically VAM has been a solution for large corporates who have complex structures of physical bank accounts spread across the globe. With growing globalization, organizations that can benefit from VAM are now defined not by their size but by complexity and business breadth. This might include an organization dealing with payments and collections in various currencies or managing funds for new-economy platforms for gig workers and service providers. VAM propositions Currently, many banks address a limited set of VAM business propositions. Meanwhile customers’ challenges are mounting with banks struggling to keep up with an ever-increasing gap. One bank that we are working with has been supporting client money management for many years. It has outgrown the capabilities of its legacy solution and is using the renewal opportunity to expand its services to address multiple virtual account propositions. Another bank is looking at offering services across the geographic region and currencies in which they operate, beyond the local, single-currency cash pooling services that they currently provide. Others are looking to use VAM capabilities to support digital wallets, e-commerce, and the gig economy. Nearly every discussion gives rise to new business propositions that can be addressed through VAM Solutions. The evolution of VAM Banks have started to realize that the traditional VAM techniques of virtual IBANs and virtual reference numbers only address a small portion of corporate challenges with its support of receivables management. The second generation of VAM solutions typically addressed additional business propositions for payables and receivables management, in-house banking, and client money management with self-service capabilities. Beyond this, Oracle Banking’s next-generation VAM solution allows the combination of traditional liquidity management techniques with virtual accounts. This allows corporates to build off physical sweeping (including relationships across multiple banks) with real-time cash concentration (via virtual accounts) into hybrid physical and virtual structures. The next step in the evolution is predictive cash flow forecasting based on accounts receivable and accounts payable, using artificial intelligence and machine learning. Bank’s challenges with VAM One of the greatest hurdles is to carefully identify the precise customer segment challenges and what is needed to deliver real value to the corporate customer - rather than simply introducing a new solution. Our approach is a phased, minimum viable product (MVP) so that customers can see tangible benefits with rapid time-to-market. Another challenge is adapting the mindset of banks toward a more client-focused, self-service approach. As with any financial services project, the integration of a new solution is always a challenge. VAM interacts with many areas of the bank, therefore, it requires many touchpoints with the bank’s systems. Finally, some banks struggle to identify the business case related to developing a VAM offering. It’s not easy for some banks to quantify the benefits for them and their corporate customers around specific VAM applications. Building a proper value proposition for your VAM offering is one key to success. Traditionally, banks have offered cash management solutions for corporates to optimize their working capital and liquidity needs; these offerings used conventional cash pooling techniques. However, many banks have moved away from notional pooling due to regulations and the rising costs of this business. At the same time corporates are looking for greater insight and control, as well as lower costs through alternative solutions. Virtual accounts fit perfectly with these drivers, providing banks and corporates with greater operational efficiency. Corporates require real-time clarity of their working capital and the self-service control for efficiency and speed. Oracle’s unique advantage First, Oracle Banking Virtual Account Management supports multiple business cases in a single platform, including client self-service components. By doing so, it offers enormous flexibility to address the requirements of both the bank and its corporate customers. Oracle’s modern, componentized solution allows banks to choose the components that address their precise needs with both tactical options for faster time-to-market and strategic options for the longer term. For corporates, the solution’s flexibility allows banks to easily provide targeted business propositions and meet evolving corporate needs through configuration rather than additional development. In addition, Oracle applies powerful artificial intelligence and machine learning capabilities for business insights and predictive cash flow forecasting. All Oracle Banking solutions are built on a modern architecture and are designed for easy integration into a bank’s environment. This eases one of the main hurdles that we have identified when banks are developing VAM offerings. In addition, Oracle’s VAM solution is system agnostic; it can integrate with any core banking and payment systems that are used at the bank. Oracle provides banks with an agile, future-proof solution that meets performance and time-to-value, while strengthening their corporate offering through increased flexibility. Building a proper value proposition for your VAM offering is one key to success.   To learn more, feel free to message me to explore more, or have a conversation. Related content: Trends Shaping Corporate Banks: Connected Commerce, Digitalization & AI Mind The Gap: Stepping Up From Liquidity Management To Being A Treasury Partner Treasury 4.0: The win-win approach to working capital management   For more information, please visit: Oracle Banking Virtual Account Management: oracle.com/vam Oracle Financial Services: oracle.com/financial-services Subscribe to our Blogs: Oracle Financial Services Blogs: Sign up today Contact us: Email: financialservices_ww@oracle.com Follow us: Linkedin: https://www.linkedin.com/showcase/oraclefs/ Facebook: https://www.facebook.com/OracleFS/ Twitter: https://www.twitter.com/oraclefs

Jeffrey highlights the wide array of opportunities with VAM and where banks and their corporate customers are heading.   Ask a roomful of corporate bankers “What is Virtual Account Management (VAM)?”...

Financial Services

Fintech APRO Cloud Solutions Delivers Embedded Treasury Banking to ERP Cloud Customers on Oracle Autonomous Cloud

Blog co-authored with Geert Mouwen from APRO Software Solutions One of the concerns of companies considering a move to Oracle ERP Cloud is their existing bank treasury connectivity. Many companies have gone through extensive processes with their banks building and testing formats and setting up connectivity, often resulting in completely customized solutions. These projects have taken a lot of time, money and effort to complete and to maintain. Understandably companies are not very eager going through that experience again. On the other side, global transaction banks today are under heavy pressure to provide superior experience to their customers in the areas of executing global payment transactions. However, many banks and the corresponding corporate treasury organizations are now settling with inferior customized solutions that are taking too long to implement and do not provide the true straight through processing experience. Due to the high number of customizations offering new services to existing clients has become a difficult process. One of the big benefits of moving your ERP to Oracle Cloud is the access to a broad range of third-party apps through the Oracle Marketplace. Apps that allow for easy access to the latest fintech products and services. Also, banks are also moving ahead, and more and more banks are seen expanding their services to be directly accessible through API’s. Embedding the Bank in Oracle ERP with Oracle Fintech APRO Cloud Solutions: What if there is a treasury banking app on the Oracle Cloud Marketplace that acts as a global universal bank ERP payments and treasury adaptor? On one side you plug directly into your customers ERP, and on the other side you connect to your own internal banking systems. The plugin has a global format library available that has the latest bank formats and transmission protocols available for both global and local banks. As soon as your banks API’s become available this app will allow your customers to utilize your new API services by just upgrading the app, giving your clients the option to use your services without the need for any development on their side. Banks today can deliver this global payment solution for their ERP customers by simply leveraging the APRO Cloud Solutions Banking Gateway application and do a one click deployment on Oracle Cloud. Any ERP customer globally can instantly connect to their treasury bank with this offering enabling them to improve their operational efficiencies, improve their cash flows by calling real time banking APIs and gain instant insight into payments status. APRO Cloud Solutions Banking Gateway does just that. It is created by a highly specialized company that builds bank connectivity and formats for Oracle for over 20 years. APRO is using Oracle Java Cloud & Oracle Autonomous Database technology and their Banking Gateway solution can be found on the Oracle Cloud Marketplace since 2016. With Oracle Cloud banks can be assured of the security, scalability and performance of the solution and can be confident that the solution complies to global banking regulatory compliance requirements. If your ERP connectivity is a concern for migration to Oracle ERP Cloud, it might be worth checking out what this application can do. For banks looking to deliver treasury banking and payments capabilities integrated seamlessly to Oracle ERP Cloud , APRO Cloud Solutions Banking Gateway provides the banking experience embedded into Oracle ERP systems. This solution delivers banking experience to where their customer conduct business, drastically improve customer experience and remove operational efficiencies in payments and treasury banking. APRO Cloud Solutions Banking Gateway can be found on Oracle Cloud Marketplace here. Learn more about the Banking Gateway solution here.

Blog co-authored with Geert Mouwen from APRO Software Solutions One of the concerns of companies considering a move to Oracle ERP Cloud is their existing bank treasury connectivity. Many companies have...

Financial Services

The Future of Financial Services: 3 Technologies Poised to Change Your Experience

If you think about it, financial services have traditionally been disconnected from their customers’ goals. For instance, when we want to buy a vehicle or house, or purchase inventory for a manufacturing process, we typically begin by researching and evaluating our options, then making a purchase decision. Only then do we look at the financial services necessary to complete the transaction. But financial services companies today are already well on their way to changing this experience, and three technologies are key to this transformation: APIs, adaptive intelligence (AI)/machine learning, and blockchain. These key strategies involve leveraging large troughs of data so banks can become an integral part of the consumers’ journey, engaging intelligently with customers through contextual offers and advice, and connecting customers and the services they need. The Integral Bank: becoming integral to customers’ lives by using APIs to embed the bank in every customer interaction One key opportunity that financial services companies have with APIs is to bring the banking experience directly to the customer where a decision is happening with banking-as-a-service-enabled strategies. One example of this is a recent partnership announcement between Citi and big-tech Google. Using APIs to expose its banking services, Citi has enabled Google to offer these financial services as the customer is searching for services and offers on the web. In the future, customers will be able to search for a vacation home or airline travel, and Google will be able to integrate seamless and contextual banking services into the customer flow. Then a bank like Citi will power the transactions, be it on-point lending or embedded payments, to complete transactions without users ever leaving their journey. By exposing their services so they can be embedded in customers’ daily experiences, banks can increase their reach and help provide contextual services to customers at the point of the transaction.   This example of delivering banking ubiquitously is now being explored by many leading banks who are opening up their banking services as APIs and embedding the bank experience directly where the user conducts everyday transactions, rather than the consumer having to come to the bank. This approach also enables banking to be distributed by third-party fintechs or big techs without needing to take on the regulatory burden of becoming a bank. On the other side of the spectrum, banks can assemble third-party services that they typically don’t offer and, essentially, become a one-stop financial services shop for their customers through an approach called banking-as-a-platform. Starling Bank in the UK is an example of a bank using APIs to bring all these services together to deliver a seamless experience to its customers – an experience Starling calls the Marketplace. The bank describes the Marketplace as an “ecosystem of financial products” – both consumer and business customers can access a number of digital financial services through their Starling accounts, including mortgages, pension investment management, and homeowners’ insurance.  A typical retail bank or credit union can achieve massive scale by implementing a platform approach and aggregating services in a seamless experience—eliminating the need for consumers to go to different institutions for different services. The Intelligent Bank: leveraging data with adaptive intelligence (AI) to engage with customers through intelligence and to enable autonomous finance Once all of the available data is aggregated through banking-as-a-service or banking-as-a-platform, banks can power personalized offers based on all the interactions customers have with the ecosystem partners through AI/ML-enabled engines that parse the data in real time and present highly contextual and relevant inline offers. This is the future of banking: contextual finance, where the bank is able to offer the right product at the right time in real time to the right person based on data that’s acquired from interactions customers have with the ecosystems or with a wider set of platform applications. Banks are already rapidly moving to deliver highly tailored services to a segment of one by leveraging all the data available to them. For instance, AI is already being used to provide consumers with advice on how to use their money, how to budget well, and how to invest and achieve long term investment goals, all powered by intelligent agents. Self-driving finance enables banks to deliver proactive advice to their customers to empower them to take control of their financial well-being. This strategy boosts customer engagement and product adoption. Using Oracle Autonomous Cloud, fintech company Personetics is delivering “self-driving” or autonomous finance today to banks. We’re also seeing AI and natural language processing (NLP) being used to drive conversational engines that can converse easily with customers in natural language; these engines have full awareness of context and can seamlessly adapt to deliver a human-like experience.  Another example of a company that delivers natural conversational AI banking experience with fully pre-trained agents is Ipsoft . Their digital agent Amelia can cover mortgages, loans, onboarding, wealth management leveraging the autonomous cloud, big data and the Oracle open banking platform.  Employment of digital labor improves customer experience, reduces time to resolution while continuously improving back office bank efficiencies. Machine learning-based models are also now being used in underwriting to provide a holistic view of borrower risk based on alternative data. In the past, this would have taken weeks because publicly available data had to be collected from different sources and then aggregated for analysis. Now, it can be seamlessly synthesized in minutes to enable the risk teams to bring all the information together in concise, succinct bullet-size information to make credit decisions. Using real-time payment information and a risk management system to analyze thousands of customer transaction variables, MYbank in China is now making small business lending decisions in fewer than three minutes.  Borrowers apply with a few taps on a smartphone and, if they’re approved, receive cash almost instantly. There are no humans involved in the process, and the default rate is practically non-existent (1%). The Connected Bank: connecting customers and their banking needs through blockchain When dealing with global financial payments, inter-bank transfers, fraud detection, and loan processing, the processes have traditionally been slow. At the backend, the process requires banks to cooperate and connect seamlessly with other entities. Lack of transparency is also a major hurdle. With these hurdles, it might take days for banks to complete a transaction. But blockchain is changing this experience. Arab Jordan Investment Bank (AJIB) is an excellent example of how blockchain can improve and speed processing. Before adopting blockchain, the bank’s money transfers required third-party intermediaries for cross-border transactions. Each intermediary charged a fee and required AJIB to share some customer information with those third parties, which involved strict regulation compliance. With Oracle Blockchain, the bank is now able to make transfers in real time without the transaction fees that used to occur at every stage. Both senders and receivers can track the money transfers as they’re happening, providing information about the exact timing and amount of the transfer. This has resulted in tighter security, elimination of delays, and automated transactions without third-party interference. Oracle Helps Facilitate the Future of Financial Services Oracle is taking a leading role in building the future of banking with technologies that enable banks to become integral, intelligent, and connected to their customers’ lives: Oracle Autonomous Database uses AI/ML capabilities to minimize human intervention and eliminate manual, error-prone tasks, which minimizes operational risk exposures and tightens data security. Oracle AI enables data scientists and data engineers to build, train, deploy, and manage machine learning models and assets within a single collaborative workspace to better manage the real-time information that’s flowing into the bank from multiple channels. Oracle Fintech Innovation helps smaller banks and fintech companies succeed by combining Oracle’s financial services and technology expertise with Oracle for Startups, a program designed to help accelerate growth and leverage Oracle’s world-class enterprise cloud platforms and ecosystems. Oracle drives digital innovation into banking with curated enterprise-grade financial technology that delivers solutions in payments, cognitive banking, autonomous personal finance, wealth management and a variety of transformational digital fintech solutions on Oracle Cloud that can be easily plugged into the bank with Oracle banking APIs. Oracle Open Banking Platform provides the APIs and tools banks need to succeed with their open banking and digital transformation initiatives. It helps them develop and deploy new digital services rapidly and share data securely by enabling them to deliver banking-as-a-service or connect to ecosystem partners for banking-as-a-platform capabilities. Oracle Blockchain Platform provides trusted peer-to-peer permissioned networks to run smart contracts and maintain tamper-proof distributed ledgers for B2B transactions, eliminating intermediaries and points of failure. Learn more about how technology is transforming the financial services industry in this video.

If you think about it, financial services have traditionally been disconnected from their customers’ goals. For instance, when we want to buy a vehicle or house, or purchase inventory for...

Banking

Simple, Digital, Transparent & Efficient

  Small to medium businesses are the foundation for the global economy. They represent a substantial potential revenue source for banks. Yet this critical customer segment is many times overlooked by banks having them switch between their Retail and Commercial divisions. Most small businesses are still not satisfied with how banks are addressing their specific financial needs.  Small to medium businesses are demanding a better banking experience ~ Simple, Digital, Transparent, Efficient.  Sounds Easy – Right? What’s the challenge then? Two tables from the Small Business Credit Survey – grabbed my attention. They are indicating that applicants are most dissatisfied with online lenders’ higher rates, less favourable repayment terms, and loan conditions. However, the speed at which they can give a credit decision and give customers access to funds – influences their lending preference. It’s clear from this that banks that get the small business customer experience RIGHT have an enormous opportunity to increase their market share in this critical segment.   Source: https://www.fedsmallbusiness.org/medialibrary/fedsmallbusiness/files/2018/sbcs-employer-firms-report.pdf Small Medium Businesses demanding new experiences isn’t new information to banks. For a while now, banks’ strategic priorities have been focused on increasing market share and delivering profitable growth in small to medium business segment. So, if this is the case - why are so many banks still challenged to deliver on the small to medium business customer expectations? For many banks, the small to medium customer falls between their consumer and corporate businesses. And while many banks are now addressing this segment uniquely on their public-facing websites – this change has not proliferated down-stream to the processes, systems, and data that underpin this segment. I am not suggesting that banks need to change their channel or core systems– instead, adopt an incremental middle-out approach. One that enables banks to deliver demanding experiences for this segment and leverage investments already made.  Where to start?  Data is the most critical asset that banks have, yet it is grossly underutilized. Data is often unused during loan origination. Underutilized data happens often during loan origination. I recently had the privilege to be part of a panel discussion titled ‘Leading Small Business Lending into a Digital and Data-Driven Age’. What struck me was the emphasis on leveraging ‘trusted data’ to deliver simplify, automate, and ultimately drastically improve the overall customer experience.     Why, when there are abundant data sources available within the bank and external to the bank, do customers need to input application data. Instead, banks should be striving for ZERO to minimal data entry required by either the customer or the banker, which would significantly reduce turnaround time and ‘first time right.’  A couple of examples –  Many banks have invested in centralized customer data repositories, but most have not yet thought through where to house and maintain the customers’ financial profile critical to the origination process. Our PARTY component can sit alongside these customer repositories and provide a location to store financial profile information, which is then updated, maintained, and reused across the origination process. Further, being able to connect to external sources that host the customer’s financial data without the need for the customer to re-key to expedite the application capture process with the fewest keystrokes.  Similarly, COLLATERAL information – for most banks, this data is siloed against individual applications and not centrally stored. The consequence of this is that customers are asked to provide this information with each use and are not able to leverage existing collateral across new applications. Further, appraisal data cannot be reused, meaning bankers will often request multiple appraisals for individual collateral at a high cost to the bank.    Next, consider the ‘origination process’ – many banks try to take existing processes designed for assisted channel origination and make these digital. Instead, banks should be over-hauling these processes and thinking ‘customer in’. Taking into consideration seam-less omnichannel navigation, leveraging data at each stage to drive efficiency, simplification, and remove product silos. Customer in thinking enables banks to deepen customer relationships.  Finally, ensuring that there is access to both data to the process. All capabilities must be API enabled to ensure that customers, bankers, underwriters, approvers, and any other parties associated with the procedure are delivered a superior experience. API enablement goes beyond merely providing the customer with an online form to complete an application. It aims to enable customers and bank staff with secure and consistent access, delivering transparency into the data and its related processes at every stage of the origination life-cycle.  We are delivering  Oracle’s origination platform enables banks to leverage their existing investments and provides a “speed to market” advantage in the race for a better small to medium business banking experience.   90% improvement in ‘First time Right’ ‘Time to Yes’ in minutes NOT days ‘Time to Cash’ less than 24-hours 70% improvement in auto-decision rates 35% increase in banker customer-facing time  To learn more about what Oracle is doing to enable banks to meet small to medium business expectations – please instant message me to learn more or have a conversation. For more information on Oracle’s SMB Originations solution please visit our websites at: Oracle Banking Originations: Webpage Oracle Banking Solutions: Homepage Oracle Financial Services: Homepage Contact us: Email: financialservices_ww@oracle.com    Follow us: Linkedin: https://www.linkedin.com/showcase/oraclefs/ Twitter: https://www.twitter.com/oraclefs

  Small to medium businesses are the foundation for the global economy. They represent a substantial potential revenue source for banks. Yet this critical customer segment is many times overlooked...

Financial Crime and AML Compliance

Integrated Case Management – A Game Changer for Smaller Banks Fighting Financial Crime

Smaller banks are equally vulnerable to financial crime just like large multi-jurisdiction banks – thus exposing them to greater regulatory scrutiny. This has led to increased investment in financial crime & compliance programs such as Know Your Customer, transaction monitoring & case investigation. Increased regulatory expectation has amplified the costs and burden of compliance management – and the challenge is surely greater for smaller banks. “Basic” Anti-Money Laundering Software Is Not Working Banks currently perform periodic reviews on high-risk accounts and conduct investigations based transaction histories via several risk indicators. To facilitate this anti-money laundering process, there are many tools which fit the “basic” and “economical” compliance needs of smaller banks. However, these anti-money laundering tools only provide basic functionality and lack key aspects such as flexibility, automation and future readiness. These are some limitations in current anti-money laundering software: Lack of Holistic View: If a bank’s system is unable to provide complete cause of red flags, customer activity, historical cases, then the analysts are not able to get a clearer view of the AML investigations. This means that either the analyst has to gather such details from third-party systems, manually adding to the investigation times or make inaccurate conclusions using incomplete data. Manual Case Assignment: Based on team structure & case types,  banks should be able to automatically assign cases to users or user groups. If not, supervisors need to step in and assign the cases themselves. With process automation that is available in the market, banks can  invest in their time more on high-value activities such as reviewing & assessing overall program instead of assessing cases. Inflexible Workflow: Current anti-money laundering software options pre-packed with basic workflows which is great from a “time-to-production” perspective. However, if these tools are inflexible and cannot be tailored to meet bank-specific anti-money laundering policies or any future organizational changes then it needs to be adapted. These tools may not be the best option to match available resources with the bank’s risk profile. Case Correlation: If the case management tool does not allow for case grouping as per common/shared information between cases then, it is most likely that analysts are investigating siloed cases, hence not making informed decisions. This leads to inaccurate case outcome and an  inefficient AML investigation process. Case Categorization: Ability to group cases based on priority, customer segment & investigation scenario allows more effective case assignment policy, enhanced risk assessment reporting & removes false positives. By maintaining cases without any relevant categories or sub-categories, it can restrict a more granular assessment. Productivity Reporting: Productivity reports provide a complete view of bank’s financial crime program & user management. Information around volume of pending cases, for instance, allows the senior management to better manage resources towards anti-money laundering, plan out training courses as well as other policies. Integration with Third Party Systems: A thorough financial crime case investigation often requires information-gathering from several sources such as  transaction reports, sanctions screening and media scan to truly “know your customer”. Inability to integrate with third party systems increases investigation time, and also makes it impossible to maintain complete audit trails of investigation steps. Scalability/Future Proofing: It is critical to align AML compliance investments with firm’s enterprise growth goals. The cost of upgrading would be more expensive compared to configuring existing tool to support newly added jurisdictions, products/services or acquisitions.  Don’t Settle for the Rest, Go for the Best To maximise their return on investment, smaller banks should aim to adopt anti-money laundering technology that is tailored for the size of their operations and that is powered by deep industry understanding and research. Highly visual tools are available in modern anti-money laundering software that puts  the power of analytics in every user’s hands instead of being beholden to vendor limitations. Here is a useful checklist when assessing your investment in anti-money laundering technology: A Modern Intuitive User Experience: Proving an exceptional user experience is critical part of the investigation hence. The solution needs to include the functionality -    A logical presentation of key information Automatic access to historical activity and cases Summary of key information for Level 2 investigation Ability to take unlimited steps for actions & evidence-gathering to fit banks policies View of pending/overdue cases for supervisors A map of network of all the related parties Complete audit trail Perform end to end process with fewer clicks   Configurable Workflow Process & Correlation: Every bank can come with different anti-money laundering policies & processes. A pre-packaged workflow will make it easier and quicker to implement any changes. Drag-and-drop flexible frameworks will allow banks to achieve the most optimized anti-money laundering process, matched to available resources. By grouping & correlating together new cases based on shared information between customers, accounts, external parties, addresses, tax ID and household, it will give a more holistic view of case entity. Case correlation can better make sense of all information as well to weed out false positives. Robotics Process Automation: Robotic process automation (RPA) is gaining popularity in anti-money laundering technology, for good reason. AML investigation teams have an important but time-consuming job. Looming deadlines and volumes of information make it harder to address all factors for each investigation. On the other hand, failure to consider key factors could also result in incomplete analysis. Robotic process automation can help to improve investigation efficiency and quality. There is a high rate of robotic process automation adaption within smaller banks due to lower technology cost Smaller banks need a solution that is not a black box and is fully compliant with the latest anti-money laundering regulations for data and model controls like DFS504 and AML5D. As the volume of transactions get larger and schemes become more complex, the need to fighting financial crime with advanced technology is even more pressing. The opportunity to apply the latest anti-money laundering technology to help defeat financial criminals is here. Modern visualization-driven platforms and robotic process automation can take financial crime programs to the next level increasing your organization’s efficiency and effectiveness. Find out more about our anti-money laundering solutions here: https://www.oracle.com/industries/financial-services/analytics/solutions/financial-crime-compliance.html

Smaller banksare equally vulnerable to financial crime just like large multi-jurisdiction banks – thus exposing them to greater regulatory scrutiny. This has led to increased investment in financial...

Financial Crime and AML Compliance

Can Blockchain Block Money Laundering?

Blockchain has been touted as the solution to replace the many ageing processes powering financial services and it may just be the answer to stop money launderers and financial criminals in their tracks. What is blockchain? Blockchain is a sequential distributed and encrypted database found in cryptocurrencies derived from Bitcoin. It has become a tool for maintaining transparent and distributed ledgers that can verify transactions, including financial ones, with minimal third party involvement. Blockchain is distributed because the ledger is not held in a central location but rather spread across a network of computers or nodes. And it is transparent since every transaction is made public for all to see. As part of its set up, historical transactions can’t be changed, which reduces the possibility of data altering and maintains a high level of data integrity. With these characteristics, blockchain has tremendous potential to become one of the most wanted technologies across all industry sectors over the next coming years and will have an industry impact similar to the Internet. Central banks and financial institutions are actively investing in this space. A recent article lists 26 separate banks globally who are considering blockchain technology. Similarly, there are 42 banks that are considering a common set of standards and best practices with a view to explore a hybrid blockchain concept. What is money laundering? Every year, financial institutions spend about US$10 billion to develop anti-money laundering processes , yet still this and other financial crimes continue to take place on a large scale. The largest financial crimes are not carried out with firearms but with a single click of a button. These criminals disguise themselves with different aliases from different locations so that the origins of the money laundered becomes untraceable. How money laundering works is commonly described in three stages: Placement, the stage at which criminally derived funds are introduced into the financial system. Layering is the substantive stage of the process in which the property is 'washed' and its ownership and source is disguised Integration, the final stage at which the 'laundered' property is re-introduced into the legitimate economy. These three stages simplifies how money laundering works but provides a general overview. Often, these stages may overlap and there may be no requirements for criminal proceeds to be placed. Find out how free trade zones can be a financial fraud freeway: https://blogs.oracle.com/financialservices/free-trade-zone-a-freeway-without-policing Blockchain improves data integrity As financial criminals are after the big economic data that banks and similar financial organizations are dealing with, keeping this data safe is an important anti-money laundering process. With blockchain technology, banks can increase the level of data traceability and integrity, which will consequently improve the quality of their transaction monitoring activities. In parallel, Blockchain can significantly reinforce the effectiveness of the internal controls (COBIT 5 – Data Governance Requirements) to secure data and meet the underlying principles outlined by ISACA: Reduce complexity and increase cost-effectiveness Increase user satisfaction with information security arrangements and outcomes Improve integration of information security Inform risk decisions and risk awareness Reduce information security incidents Enhance support for innovation and competitiveness Blockchain as part of your anti-money laundering process While blockchain technology will not become the future anti-money laundering platform, financial institutions can directly leverage blockchain to source data for Know Your Customer (KYC) and fight financial crime The data irreversibility of Blockchain provides a single source of truth and reduces the risk of duplications or errors as it is immutable. Blockchain can be used to streamline client on-boarding and KYC processes in a considerable way. To ensure data privacy and cyber security, cryptography can be another critical point to ensure partitioning of data. The number of cases of fraud, hacking and unauthorized personnel accessing data that should be secure poses a significant risk for all businesses. Utilizing blockchain can overhaul and improve security and highlight where upgrades need to be made after a leak or hack has occurred. Blockchain technology holds promise in boosting anti-money laundering processes but there will be some challenges to address. Shifting to a decentralized network will require educating end users and operators and integrating with current working process to have the biggest and best impact. Read up on the latest anti-money laundering trends and solutions here: https://www.oracle.com/industries/financial-services/analytics/solutions/financial-crime-compliance.html

Blockchain has been touted as the solution to replace the many ageing processes powering financial services and it may just be the answer to stop money launderers and financial criminals in...

Banking

Fintech Hydrogen Accelerates Financial Innovation on Oracle Open Banking

Open banking started as an European Union directive in 2015, known as PSD2. It was administered to get financial institutions to open their APIs to allow third-parties to build applications and services on top of data. This initiative has now spread globally, but there has yet to be meaningful product layers built on top of the financial data. The end goal of open banking was to increase competition and provide a level playing field by regulating consumer protection. However, only about 49% of consumers feel comfortable sharing their data with companies through open banking. Gaining the consumer’s trust is critical when it comes to adopting open banking, and we realize the importance of this, here at Hydrogen. Trust must be established for any relationship to be successful, which is why Hydrogen recently announced that our platform is now available on the Oracle Cloud Marketplace and can be seamlessly added to the Oracle Open Banking Platform. With 430,000 customers in 175 countries, Oracle is one of the most trusted technology firms in the world and Oracle customers can now leverage the power of Hydrogen’s award-winning secure and scalable enterprise grade cloud  platform on Oracle Cloud Infrastructure (OCI). Oracle Open Banking Platform The Oracle Open Banking Platform is an open banking API enabled solution that is built on top of the Oracle Cloud which serves as the foundation for building, integrating, monitoring, and securing applications, as well as for driving new insights. Through its extensive catalog of services, such as lending, payments and predictive analytics, the Open Banking Platform enables financial institutions and fintechs to expedite innovation and monetization with a single enterprise cloud platform. Oracle Open Banking Platform equips customers with a best-in-class open banking solution that, among many other benefits, delivers high-value and cost effective financial products and services, improved operational efficiency, and creates new revenue channels by exposing APIs and monetizing current banking assets. Accelerating Financial Innovation with Hydrogen With the Hydrogen platform integrated with Oracle’s open API banking cloud offering, Oracle customers can accelerate their digital financial innovation by quickly building hundreds of solutions using a single platform. Hydrogen’s powerful toolkit consists of one connected set of configurable APIs, one integration library, and one standardized data model, with added business logic and modular UI components to build end-to-end investing, savings, insurance, wellness, and many other applications. The Hydrogen platform is able to accomplish this because it can integrate with any third party system, provide core data storage and financial engineering, and create end-to-end client-facing web or mobile applications. Financial Wellness Use Case As we’ve previously mentioned, the Hydrogen platform can be leveraged to create numerous financial applications. One example is a data rich financial wellness application that can be built with the joint tools available from Oracle and Hydrogen. In this use case, the wellness application will highlight personal finance management (PFM), budgeting, financial health, and planning. The application starts by pulling in the users financial data through their various accounts with multiple financial institutions. Hydrogen extends this functionality through an integration library and chooses from various aggregation vendors and then pull the data automatically back into the Hydrogen platform. Once the user has selected the financial accounts they want to review, they are taken to their financial wellness dashboard. This data is stored in the Hydrogen platform and synced via vendor integration. The application can now perform analytics on the financial wellness of the user such as net worth tracking and cash flow analysis. Users can also create and update budgets.  After banking and credit card accounts have been synced, the application can check the budget against categorized transactions and users can automatically view their progress toward a configurable budget. The user can also receive a health score across their finances using the aggregated data. This score can be computed using the financial data stored, either by comparing to other users in the application, or based on a rule of thumb. Lastly, interactive calculators can be shown next to each score to give the user additional advice. For example, Emergency Fund Calculator returns a total recommendation along with a plan to save for the total recommended amount in a variety of horizon intervals. With Hydrogen as an added layer on top of the Oracle Open Banking Platform, financial institutions can quickly and cost-effectively create new revenue models and mitigate risks with an enterprise-grade platform. The average Oracle Cloud customer can save over 80% in product development cost and time by leveraging the joint Hydrogen/Oracle model. Guest blogger Mike Kane is Co-Founder of Hydrogen

Open banking started as an European Union directive in 2015, known as PSD2. It was administered to get financial institutions to open their APIs to allow third-parties to build applications...

Financial Crime and AML Compliance

Transnational Financial Crimes Cost Banks up to $2.2 Trillion

Financial crime has existed for as long as money has. Although we’ve come a long way from hiding grain underground, but financial criminals still follow the same principle of anonymity and hiding. Transnational financial crime is  good business. A recent article by Global Financial Integrity, reported that it is valued to be between US$1.6 trillion to US$2.2 trillion in 2017 11 different markets.   The report took a closer look into several groups,  including the FARC (Revolutionary Armed Forces of Columbia), the Islamic State and the Lord’s Resistance Army. These groups reportedly used criminal markets for personal wealth gain and power play. They allegedly “front” anonymous (shell) companies  (i.e. companies that have obscured their ownership in order to allow beneficiaries to operate more “freely”), to help hide their identities, criminal activities  frustrate active law enforcement investigations and run money laundering. The International Consortium of Investigative Journalists (ICIJ) and OrganizedCrime and Corruption Reporting Project (OCCRP) have also found this to be true in their ongoing investigations into global corruption and financial crime.​ Criminals have worked around hard-to-detect areas for money laundering in trade finance and correspondent banking. Financial fraud is also made easier considering the many banks have limited ‘know your customer’ systems and processes, leaving them vulnerable for exploitation. So how can financial institutions stop financial criminals in their tracks? Connect the dots faster and deeper with artificial intelligence and machine learning    It may seem obvious, but criminals increasingly lean on technology. As technology trends accelerate, even an anti-money laundering army of analysts and investigators are no longer able to keep pace. These transactions now happen in an instant, making it hard to detect that quickly. The trouble with digital disruption is that there is too much data. Luckily, artificial intelligence (AI) and machine learning solutions are getting to a point where they can run complete analyses and automated decision-making across vast volumes of transaction data.  Spotting anomalies is crucial. However, it is not useful until they are string together to make sense. This is where graph technology comes in. The use of network analysis and data visualization  allows for the exploration of relationships between entities of interest such as organizations, people and transactions, easier entity resolution, single customer views and the  visualization of patterns and relationships. This is important during transaction monitoring and investigations in helping the anti-money laundering team understand what the data truly means. Use regulation as a jumping-off point While regulation is everywhere in financial services, these regulations rarely align globally or reflect the sophisticated financial crime threat that today’s institutions have to deal with. Financial institutions will need to use regulations as a starting point, rather than as the end point, to ensure that their processes and rules are as up-to-date with criminal activity as possible. Financial compliance need not be a frustrating customer experience. Find out more: https://blogs.oracle.com/financialservices/financial-compliance%3A-the-foundation-of-banks’-customer-experience Collaborate to fight financial crime The financial services community needs to come together to build strength and resilience in numbers. Financial criminals do not work under a single structure. They scatter across clans, cells and networks. But, the crimes they commit are the same. Regulators and financial service providers need to band together to combat any criminals or patterns of corruption. In the likely event that it is taken up to criminal trials, it will easier to judge them under an effective legal system across different borders.   Ultimately, the interconnectedness of the global financial system means that financial crime  and money laundering is only going to get more complicated, far-reaching and sophisticated. However, with the right tools, the right processes and the right collaborative approach, financial services firms can take on these criminals from a position of strength. Find out more about our anti-money laundering solutions here: https://www.oracle.com/industries/financial-services/analytics/solutions/financial-crime-compliance.html

Financial crime has existed for as long as money has. Although we’ve come a long way from hiding grain underground, but financial criminals still follow the same principle of anonymity and hiding. Trans...

Banking

Fintech Strands Launches SaaS Personalised AI Banking Platform Running on Oracle Autonomous Cloud

In recent years, financial institutions have taken big steps in the adoption of cloud-based solutions with the aim of leveraging the benefits shared IT resources and ecosystems deliver across the enterprise. Oracle Open World 2019 set the scene for the launch of Strands Software-as-a-Service platform as we look to deliver the first global enterprise grade digital money management solution on the cloud. Strands is a pioneer when it comes to creating highly-customizable digital money management software for top-tier financial institutions worldwide. Cesar Richardson, Head of Alliances and speaker at OOW19, indicated “Strands' and Oracle’s partnership could not come at a more timely moment in the evolution of cloud banking in the Financial Services industry. Banks are very interested in leveraging our technology however demonstrable security, performance, handling PII data and compliance remain key in all our conversations. Oracle's Gen 2 Cloud provides the foundation for enterprise cloud-based banking platform needs demanded by our large banking clients who require to monitor, control, and encrypt sensitive data leveraging, bank private data isolation for mission-critical banking applications such as Strands Finance Suite. We chose Oracle’s Gen 2 cloud as it is designed to meet cloud security principles such as protecting data in transit, asset protection and resilience, separation of client data, operational, personnel security, identity, and authentication requirements, which are table-stakes for taking banking computing to the cloud. We can now confidently meet bank infosec and regulatory scrutiny allowing us to grow our business at scale and provide immediate value to financial institutions and their customers at the best price point in the industry. There is no doubt that banks will be very impressed when they explore how our joint product offering not only reduces the total cost of ownership, but also delivers a range of innovative deployment options (private cloud, public and hybrid) that adapt to implementations with different regulators worldwide. Understanding the current needs of banks and financial institutions when it comes to their digital transformation, Strands has found a partner in Oracle and their Gen 2 Cloud solution to power and deliver their enterprise-grade Finance Suite as-a-Service. This new partnership supports all of Strands’ money management and insights solutions offering a blend of private, public and hybrid cloud configurations based on the requirements of every financial institution and local regulator. Some of the key benefits of our product partnership include: Exceptional Performance - Processing over 150K real-time transactions per minute and instances with over 10 Million users requires a cloud that is optimally tuned to run large and complex production systems. Enterprise Grade Security - Monitored and controlled access to Autonomous DB protecting from cyber attacks and unauthorized internal control. Remove human error and prevent hacks- Autonomous DB reduces the considerable risk human errors can generate including errors in configurations, patching database and carrying out administrative tasks that don't add value but expose the enterprise to potential threats. Smooth Transition - Migration of our Enterprise grade solution to the Oracle Cloud was seamless thanks to the flexibility in supporting all applications - old and new alike. Superior Price to Performance Ratios - Price relative to Performance is unrivaled with Oracle Cloud when running data-intensive applications. Strands’ goal is to help banks and financial institutions build new business models which will allow them to compete in an evolving industry and find opportunities to monetize their rich source of transactional data. This will be achieved by delivering personalized AI banking services using the Oracle Autonomous Cloud. Strands is leveraging multiple components of Oracle’s Gen 2 Cloud including Oracle Kubernetes Engine, OCI Streaming, Oracle API Platform and Autonomous DB. Looking to the future, the value of data will continue to increase. As such, Strands’ mission is to use Machine Learning and Artificial Intelligence to help banks and financial institutions extract and categorize transactional data to produce rich insights about their customers. By doing so, banks can then take steps to speed up internal processes and help reap the benefits of a more engaged relationship with their customers.

In recent years, financial institutions have taken big steps in the adoption of cloud-based solutions with the aim of leveraging the benefits shared IT resources and ecosystems deliver across...

Financial Crime and AML Compliance

Free Trade Zones: A Financial Fraud Freeway?

We’re not saying free-trade zones (FTZ) are a hotbed of financial crime. But given its duty- and tax-free status, these jurisdictions tend to attract money laundering, terrorism financing and other criminal activities, in addition to legitimate businesses. Blind Men and the Financial Crime Elephant  The scope and degree of Customs control over the goods introduced, and the economic operations carried out in FTZs, vary from one jurisdiction to another. Goods introduced in a FTZ can undergo various economic operations, such as transshipment, warehousing, re-packaging and re-labelling as well as storage. But the same shipment may also use FTZs as a base around the globe for no other purpose than money laundering. All of this creates a complex financial crime network with multi-layer supply chain systems that can be tough to monitor. The special status, tax and arrangements, in these areas, can often allow financial criminals to exploit the system with little regulatory oversight. Even involved institution, with a robust transaction monitoring program may have limited visibility or just a fraction of the complete view. It is a Family Business  FTZs are more than commercial distribution centers and represents global, family-based, ethnic/religious networks. The operators may be linked by ethnic/religious networks across FTZs across the world that even company registry information may not be track the relationship across businesses. Tackling the Money Laundering Threat with a 720-Degree Customer View  Transaction monitoring of FTZs is currently ineffective because there is no holistic view of customer financial activity. The current programs only factor internal information (such as Customer, Bill of Lading, Documents) for monitoring & investigation. However, detecting financial criminal behavior requires factoring a good amount of external information, such as comparison of customer activity with overall FTZ customers of similar business nature, company information, actual vessel route and many more. The more effective anti-money laundering approach is to have a 720-degee customer view that includes information beyond the institution’s purview. They need to cross-reference customer activities with other FTZ customers of a similar business nature, gathering company and shipping information, for example. Holistic Risk Indicators: Typical transaction monitoring parameters such as high-risk geographies and inconsistent shipping do not give an overall picture of a customer behavior. These internal red flags should be correlated with external information to understand the holistic view and any discrepancies in customer behavior. Below are examples of some holistic risk indicators: Individual or company linked with several other companies Individual owning & operating more than one company at same time & same location Companies shipping to just one country Direct operations in FTZ Companies & individuals with same family ties  Companies registered with incorrect addresses Companies doing business in high risk geographies Inconsistent shipping route / change in shipping route from Bill of Lading External Network Data is Vital  There is no single source of database on these free ports or the merchants who sell these the goods. However, there are several types of external data that can be collected, organized and available to financial institutions, intelligence and law enforcement agencies as well as businesses. Below are a few examples of the vast variety of external information (along with internal data) needed: Business operating in FTZ - names, addresses, phone numbers and websites Trends report of amount of goods/services received and shipped in FTZ Financial institutions (and their principal officers) serving the businesses in the FTZ Shipping lines that transport goods/services from the port or ports serving the FTZ Products/goods brands sold in each business Data on the global supply chain. Insights on companies at every stage of the supply chain. From manufacturers and buyers to shipping and logistics Connect Hidden Dots: Advanced Graph Analytics What do you do with all that data? Institutions need to connect the dots in their data, uncover hidden relationships and patterns and ensure coverage of known risks by validating existing controls and scenarios. From a technology standpoint, an anti-money laundering solution which allows for graph visualizations for both internal & external financial crime data, that rapidly builds powerful detection patterns and generates insightful investigation dashboards for financial crime investigators and risk analysts, is crucial. In addition, financial criminals register themselves under multiple names and addresses. By the time a link is detected, these individuals nowhere to be found. Robotic process automation,can help automate basic processes for your anti-money laundering team, enhance Know Your Customer (KYC), Know Your Customer’s Customer (KYCC) and augment Counter Terrorist Financing (CTF) investigations with a holistic customer view. A centralized investigation hub to speed up investigations and boost investigator productivity is another critical aspect of anti-money laundering technology. The platform should enable financial institutions to search across customers, bill of lading, watchlists and external data such as FTZ trends, vessel movement, company information and many more. Due to the global nature of business, automating the manual data collection, linking, foreign language processing through graph analytics will ease entity resolution and understand how involved parties are interconnected. There has been increased scrutiny on trade-based money laundering recently by regulators around the globe. Tackling trade-based money laundering effectively requires factoring in the FTZ connection. An agile platform is important to keep up with the dynamic nature of criminals in fight against money laundering & financial crime. Find out more here: https://www.oracle.com/industries/financial-services/analytics/solutions/financial-crime-compliance.html  

We’re not saying free-trade zones (FTZ) are a hotbed of financial crime. But given its duty- and tax-free status, these jurisdictions tend to attract money laundering, terrorism financing and other...

Banking

Oracle’s participation in the winning hackathon team at SIBOS 2019 in London

I had the pleasure to meet Nitish Priyaranjan and Vijay Dev, both from the Oracle Financial Services Global Business Unit.  Nitish is a member of the winning team of the SIBOS 2019 hackathon with the theme “Open Banking needs open minds”, and Vijay pulled together the Oracle Banking Sandbox that were used by the hackathon participants. Rik De Deyn: Let’s start with Nitish.  Congratulations on being part of the winning hackathon team, Nitish.  What was the hackathon about? Nitish Priyaranjan: Thanks Rik.  This first SIBOS hackathon was organized by Innotribe at the 2019 SIBOS in London.  The aim of the hackathon was to collaboratively craft solutions to future industry challenges relating to security, identity and payments.  Mixed teams, with participants from banks, technology vendors and fintech firms, spent three days together to come up with an idea and a prototype for a new application.  Rik: Interesting.  So, what was the winning concept that your team came up with? Nitish: Our team consisted of participants from eBury.com, Form3, Trustology and Oracle.  We called our team “Optipay” and decided to design an application to let end users customize the way they do payments.  Our tag line was “Optimal Payments Guaranteed”.  The whole idea was to combine artificial intelligence and API’s, to realistically predict the cost and throughput of the payment that the user wants to do, before the payment is performed.  This gives users the chance to choose the payment method that most matches their personal preferences and initiate the payment with a reduced fee and more transparency. Rik: That sounds useful.  What was Oracle’s participation in the hackathon? Nitish: Oracle participated in the hackathon in two different ways.  We participated with two developers in two different teams, but Oracle also contributed by providing access to the Oracle Banking Sandbox and Oracle Banking APIs to each of the hackathon teams.  For the teams, it was great to be able to use and combine banking API’s, not only from Oracle, but also from SWIFT and Tink. Rik: That brings us to Vijay.  How did you support the hackathon teams with API’s? Vijay Dev: The use of API’s was very much an integral aspect of the hackathon. The theme was about Open Banking, but there was also a focus on open collaboration.  Collaboration between developers from different companies, as well as collaboration between systems.  And API’s are an excellent way to do that.  The experience we have with setting up and supporting hackathons, made us realize that it is important to offer API’s that have access to a fully functioning demo bank system. It makes the hackathon experience so much more realistic.  And that’s what we set up for this hackathon: a Banking Sandbox running Oracle Banking APIs, in our demonstration labs, for all teams to use freely.  Rik: Can you elaborate on that a bit?  What’s the background of this? Vijay: We brought together decades of experience working with over 600 banking customers worldwide, implementing our suite of banking software. We have customers right from core banking capabilities to linking IoT devices. Based on that we have built a sandbox that contains all our products, integrated and available. This is very close to a real bank integration and is open for access and collaboration with fintechs, partners and innovators.  At the front of this sandbox are our Oracle Banking APIs. We expose over 1600 APIs across banking domains and user segments. So, we don’t just deliver the APIs as stubs with dummy data. Our API’s apply the same level of access and authorization controls that are needed to integrate with a bank.        Rik: What a great story.  What has been your biggest take away from the hackathon experience? Nitish: Well, it’s been good to see how focused the whole financial services industry is on collaboration and API’s.  It’s been a real opportunity to be part of this, and I’d like to thank the organizers for including Oracle.  Being a development manager for payments in FLEXCUBE, the hackathon inspired me to continue this path of collaboration. Vijay: Same here.  It’s always interesting to see developer teams working with our API’s for innovative solutions.  A hackathon environment really brings out what’s working best and where we can improve.  This will most certainly influence our Banking API strategy. Rik: Thanks a lot for these insight guys, and very much looking forward to work with you again. Sources: https://twitter.com/Sibos/status/1177186595260096512 https://www.sibos.com/media/news/sibos-hackathon-open-banking-needs-open-minds

I had the pleasure to meet Nitish Priyaranjan and Vijay Dev, both from the Oracle Financial Services Global Business Unit.  Nitish is a member of the winning team of the SIBOS 2019 hackathon with the...

Banking

Self-Driving Finance-as-a-Service is Keeping Banks Relevant on Oracle Autonomous Cloud

Leading banks around the world are urgently looking to stay relevant by providing retail, small business and wealth management customers guidance in managing their finances – with varying levels of personalization and automation. We call this Self-Driving Finance. Self-Driving Finance enables banks to deliver proactive help to their customers empowering them to take control over their financial well being. This strategy boosting customers’ engagement & products’ adoption. Self-Driving Finance-as-a-Service is the next iteration as it becomes available on the Oracle Cloud. Now banks can enjoy the benefits of all that comes with an agile and scalable Cloud infrastructure including built-in encrypted security, quicker time-to-market, and on-demand scalability. Banks that adopt a Cloud infrastructure have the agility to innovate as desired with new functionalities, products, and services and streamlined paths for upgrades and customizations. With the help of Open Banking APIs and Kubernetes technology, banks can now move faster than ever to deploy Self-Driving Finance’s personalized insights, automated wellness programs and other innovative products with minimal effort, accelerating their digital transformation towards a new standard of banking experience which is highly personalized, proactively engaging the customer, and focused on the customer’s financial well being. And as Self-Driving Finance-as-a-Service ensures that the security and deployment aspects are taken care of, the fun can begin. Personetics is currently working on a set of out-of-the-box connectors to Oracle’s leading Financial Service solutions and applications. The first step is a connector for Oracle’s Open Banking APIs which will allow any bank using the Open Banking APIs to enjoy Personetics personalized insights, automated wellness programs and other products, with minimal effort. In addition, Personetics’ plan is to build connectors to Oracle CRM and Marketing Cloud to bring the power of Personetics AI to banking departments that work directly with people, namely, sales, support and marketing. Personetics is a proud partner of Oracle’s fintech innovation initiative to accelerate banks’ growth. Combined with the intuitive user interface of the Oracle Cloud Marketplace and its automated application installation features, banks are able to quickly search for relevant applications and services and deploy the business solutions that work best for their organization and their customers. Self-Driving-Finance as a service and its money management and other features accelerates the time-to-market, quality, scale & agility. To date, more than 60 million bank customers across the globe are already experiencing the benefits of Self-Driving Finance. Now, with the accelerated transformation empowered by the secure and agile framework of the Cloud, banks can quickly bring this technology to millions while realizing the tangible ROIs that serve core goals coveted by the industry – increased engagement, improved customer satisfaction, deposit growth, and increased share of wallet. We believe that banks that choose to go with a Cloud set-up, including Oracle Cloud, will see great value in their choice. Personetics plans to continue to innovate and streamline its Oracle Cloud offerings to provide great value and a short time to market. Stay tuned! Guest blogger Dorel Blitz is VP Strategy & Business Dev, Personetics 

Leading banks around the world are urgently looking to stay relevant by providing retail, small business and wealth management customers guidance in managing their finances – with varying levels of...

Banking

The critical role of DATA in improving ‘turn-around times’ in SMB Origination

The average ‘Time to Decision’ for small to medium business (SMB) origination within traditional banks ranges anywhere between 5 days to 1 month depending on the loan size and complexity of the deal and ‘Time to Cash’ anywhere between 25-55 days. In a world where SMB’s are demanding funds fast, these time-frames are unacceptable. Banks must focus on how to reduce ‘turn-around times’ and deliver a better end to end experience to both customers and staff. What role does data play in enabling banks to reduce turn-around times for SMB origination?  In the competitive SMB lending arena, banks that effectively leverage their data will be best positioned to ‘win’ the small to medium business customers banking relationship. Let’s take a more in-depth look at how leveraging data can drastically reduce origination ‘turn-around times,’ lower the cost to originate and improve credit quality. To do this, let's break down the end to end origination process into three sub-processes – Application Capture, Application Assessment, and Application Fulfillment. Application Capture - The data captured to support the application must be complete and correct. For both customers and relationship managers, this step needs to focus on minimal data entry while ensuring data quality is not compromised.  The measure at this stage is ‘first time right.’ The higher percentage of right applications for approval, the higher the chance for a quick credit decision.  Banks also need to reduce the effort required by their customers and relationship managers as part of this stage. Doing this, for relationship managers increases their customer-facing time and enables them to focus their efforts on securing the customers business, not data entry. Banks must ensure that any data already on file related to the applicant and relevant to the new application is pre-populated. Pre-populated data must then be enriched either from documents provided by the customer or by taping data sources external to the bank.  As part of the origination process, customers are asked to provide documentary evidence to support their application. Banks typically use these documents for verification purposes. Data provided include personal (driver’s license, passports) and business identification (certificates of registration, etc.) documents, personal and business tax returns, business balance sheets and P&L reports, personal and business bank statements. These documents not only verify but are rich sources of data. The challenge is how to get to the data within these documents. Advancements in Optical Character Recognition (OCR) and Machine Learning are making this possible. OCR is a technology that converts different types of documents, such as scanned paper documents, PDF files, or images captured by a digital camera into editable and searchable data. Leveraging data from documents during the application capture step not only drastically improves both customer and relationship managers experience, it significantly reduces verification processing times. The ability to integrate and augment data already within the bank with data from sources external to the bank provides another opportunity for banks to improve this step in the origination process. Services such as address verification services, personal and business identification services (Equifax, Experian e.g.), data sourced companies and personal credit bureaus, the extraction of financial data directly from the customer bank account or accounting package (Sage, NetSuite, Xero, QuickBooks etc), valuation services to assess collateral value upfront in the origination process. The more data that banks can source the simpler and more accurate the application will be. Further, this data can then determine, in real-time and based on configured credit policy, the amount a customer is eligible to borrow and a risk-based, personalized price.  Oracle customers are achieving 90% ‘First Time Right’ 35% increase in banker customer-facing time Application Assessment – This step aims to maximize the number of applications auto-decisioned and automatically verified. If auto-approved the application needs to move seamlessly to the next stage, if referred the application is sent, and all the associated data relating to the application needs to pass to an underwriter for further scrutiny. Should a manual credit decision be needed, underwriters require access to all the data in a single place to make a timely decision. Underwriter review is where the accuracy of the data captured during the earlier step is so important. For banks to improve ‘time to decision’ errors, manual steps, lengthy verification processes must be avoided. Banks need to be able to configure credit policy to leverage ‘trusted data’ and ensure that quality ensues. Further, banks need to use this data downstream of the origination process to monitor their portfolios and use insights to adjust and adapt credit policy based on portfolio performance.  Oracle customers are achieving ‘Time to Decision’ in minutes 70% improvement in auto-decision Application Fulfilment – At this stage, we measure ‘Time to Cash.’ SMB’s want access to capital quickly, so being able to complete the final legs in the process efficiently is as important as the earlier two stages. Term Sheets need to be generated automatically and pre-populated with the data and all conditions and covenants relevant. Errors at this late stage in the process cause delays which can ultimately impact whether the loan will proceed or not. Post acceptance, funds are disbursed automatically. If the loan is secured, then the bank will need to register their security interest. Oracle customers are achieving ‘Time to Cash’ less than 24-hours Finally, data that is captured and enriched across the origination process must be stored in consolidated repositories so that it can be re-used across the bank and for future applications. As examples, financial profile data captured for both the business and relevant parties associated with the business needs to be stored and updated regularly through integration with external sources, of the provision of updated financial documents such as tax returns, balance sheets, P&L statements. Collateral data is centralized with valuation data kept up to date throughout the life-cycle. The ongoing maintenance of this data is critical for the bank to better manage and monitor the portfolio across time. As competition intensifies, effective banks use data across the origination process and throughout their relationship life-cycle. These banks see significant improvements in turnaround times, as well as in the profitability of SMB origination. Oracle’s Banking Origination Platform enables banks to harness valuable data insights. These insights improves, simplifies small to medium business origination experience for customers and bank staff. Oracle customers are achieving 40% improvement in ‘Turnaround Times' 25% reduction in ‘Cost to Originate’ To learn more about Oracle Banking Origination Platform, feel free to message me to explore more or have a conversation. For more information on Oracle’s SMB Originations solution please visit our websites at: Oracle Digital Mortgage Originations: Webpage Oracle Banking Solutions: Homepage Oracle Financial Services: Homepage Contact us: Email: financialservices_ww@oracle.com            Follow us: Linkedin: https://www.linkedin.com/showcase/oraclefs/ Twitter: https://www.twitter.com/oraclefs

The average ‘Time to Decision’ for small to medium business (SMB) originationwithin traditional banks ranges anywhere between 5 days to 1 month depending on the loan size and complexity of the deal...

Corporate Banking

Oracle Powers Digital Fintech Ecosystem at Sibos 2019

At Sibos in London Sept 23-26, Oracle will feature 10 enterprise-ready FinTechs, 3Forge, Amenity Analytics, BankiFi, Gapsquare, IPsoft, Personetics, Perx, Previse, Quant Network, The Logic Value who are leveraging Oracle Cloud technology and Oracle Banking APIs to improve security, reliability, data privacy and regulatory compliance for banking. View detailed profiles of the 10 FinTechs here: Meet the FinTechs Each fintech is part of Oracle for Startups, a unique acceleration program that enables mutually beneficial business-building partnerships for startups and customers. The Corporate banking and payments value chain is an ecosystem that is driven by third-party innovators. The FinTechs selected by Oracle address core challenges in the financial services sector and deliver solutions in areas such as cognitive banking, real-time trade reporting, autonomous finance, investment banking, hyper-personalized customer loyalty platforms, open SME banking, wealth management solutions and more. With its FinTech partners, Oracle’s solutions are designed to help corporate banks rethink processes, co-create innovative products, and provide an experience that is simple and seamless for their customers. Oracle has made significant investments in four major areas: Cash and Liquidity Management, Credit and Lending, Trade Finance and Payments to help banks achieve smarter operations, greater connectivity, and faster delivery of innovative products. Meet us at H101 during Sibos to discover the innovations from Oracle for corporate banks. Please visit oracle.com/goto/sibos for more information 

At Sibos in London Sept 23-26, Oracle will feature 10 enterprise-ready FinTechs, 3Forge, Amenity Analytics, BankiFi, Gapsquare, IPsoft, Personetics, Perx, Previse, Quant Network, The Logic Value who...

Financial Crime and AML Compliance

3 Ways to Turn Anti-Financial Crime Compliance into a Competitive Advantage

As regulatory scrutiny increased, and monitoring systems started to generate an enormous number of cases, the option institutions had was to increase manpower to handle the workload. Increasing the manpower have drastically increased the cost of compliance. Such increasing costs have caused enterprises to start looking at advance analytics and data scientists as smarter investments in the long run. Analytics technologies like machine learning models enabled anti-financial crime teams to predict upcoming cases. The technology helped reduce the false positive ratio by a large degree. These systems have remained mostly disparate in siloes, thereby decreasing the Return of Investments (ROI) for most enterprises. Newer FinTech multi country-based products & services have further complicated financial crime risk making detection of organized, sophisticated crimes even tougher. Traditional Approach – Ineffectiveness in Analytics Added model management regulations, need for machine learning, and rapid evolution of unknown risks, have been critical drivers for institutions to create sizeable highly skilled analytics team. Large data sets from production & non-production systems are needed for analytics to perform data discovery & regular model optimization. Generally, data provisioning can take very long, and by the time the data is made available, it might already be outdated. Moreover, drastic changes in the risk profile of customers or entities require access to non-production data along with production data. Again, a longer time for data provisioning does not provide must-have coverage to financial crime risk. Lastly, tools with restricted data science languages limit the ability to provide coverage for complex behaviors, such as a network of external & internal parties.  This approach makes the data discovery & optimization process expensive & highly inefficient. RPA Can Win Games but Not a Championship – Investigation Challenges It is well established that, for cases, investigation analysts spend almost 80% of the time gathering the information and just 20% of the time analyzing the collected data. Time spent gathering data makes the investigation process the most expensive element in financial crime & compliance program. In recent years, Robotics Process Automation (RPA) has been leveraged to solve data gathering challenge. RPA has reduced overall data gathering time significantly, though it does not provide insight & connection between hidden parties. The lack of insight & connections makes the investigation process highly inefficient and exposes institutions to organized financial crime risks. 3 Ways to Turn Anti-Financial Crime Compliance into a Competitive Advantage Unified Platform for Monitoring, Investigation & Analytics is Vital: Quite a few leading institutions leverage a unified platform for detection & investigation. However, analytics for data exploration, above the line tuning / below the line tuning and new risk coverage are in disparate systems. A unified strategic platform for analytics fully integrated with detection & investigation will ensure timely & quality availability of production data. Additionally, machine learning models require huge volume & a wide variety of data attributes. Data attributes such as case outcome & supported evidence can be efficiently fed into machine learning models, when programmed into unified fully integrated platforms. Additionally, a unified platform can drastically reduce the operational time of newly authored models to production, which is essential for the efficient model optimization process.   Polyglot Model Authoring with On-demand Data Access: When a system is jammed with fewer analytics languages, it limits the institution’s ability to leverage numerous open-source languages as per specific requirements.  For example, individual languages prove better while integrating with Hadoop, or can better handle large volumes from Hadoop (Example: SPARK) as compared to other words. Which implies, the ability to leverage multiple analytics languages is essential to the growing need for improved analytics. Strategic solutions should leverage popular data languages such as R, Python, and SQL, for productivity. Institutions realize that active discovery requires the institution’s transactions, accounts, case, and other financial crimes related data hosted in a data lake. Ability to load data from the data lake on-demand, significantly reduces the time and effort data scientists spend in preparing data for analysis. Data Scientists should be able to ‘mashup' production data with third-party data in the data lake for discovery and modeling.   Graph Analytics to Fight Organized Criminal Network: Efficient Investigation of highly organized financial crime requires technologies such as Graph Analytics to succinctly express intricate money movement patterns, detect multi-hop relationships, and identify hubs and spokes of activity. Graph Analytics leveraging a single source of data powers investigators with an ability to search customer information from various source systems and allows the linkage of customers, accounts, external entities, transactions and external data stored in disparate operational silos. A single source also provides a 360-degree view of a customer, foreign bodies, or account for a holistic view of the case, transactions, and external data of interest. Graph algorithms such as Connected Components, Shortest Path can generate automatic linkages. For example, such linkages could be (i.e., linking based on customer identification numbers, name-matching, shared phone numbers, tax ID, etc.). Further, investigators can drill down (expand/collapse) on customer information & visualize related parties using graph analytics. Lastly, Natural Language Processing (NLP) to auto-generates case narrative/summary for investigations, including case highlights, associated parties, number of events, and red flags, etc. can be a game-changer in documenting case findings. Graph Analytics opens new avenues of deep learning using graph algorithms such as Graph Similarity. Graph Similarity involves determining the degree of similarity between Graphs. Intuitively, the nodes in both graphs would be similar if, its neighbors are identical (and its connectivity, in terms of edge, to its neighbors). Again, its neighbors are identical if their neighborhoods are similar, and so on. This intuition guides the possibility of using Belief Propagation (BP) as a method for measuring Graph Similarity, precisely because of the nature of the algorithm and its dependence on neighborhood structure. With seamless access to production data in a secure and designated discovery sandbox, ability to leverage popular data science languages and graph analytics, both data scientists & investigators can gain an accelerated path to explore financial crimes data & hidden unknown networks interactively.   In the upcoming ACAMS 18th Annual AML & Financial Crime Conference, Oracle is hosting a panel of key industry experts. The Panel, “Innovation Applied: Solving Financial Crime with Advanced Analytics & Intelligence”, features Stuart Davis - Global Head- Financial Crimes Risk Management, and Group Chief Anti-Money Laundering (AML) Officer, Scotiabank is one of the panelists. Stuart Davis continues to speak about his vision of a unified compliance data store for all financial crime needs. This data store is for monitoring, investigation & advanced analytics. Another panelist is Brad Ahrens - Vice President, Compliance Surveillance Technology & Analytics Group, Charles Schwab. Brad Ahrens is a massive advocate of using innovative technologies to improve advance analytics & intelligence productivity. John Sabatini from our partner organization PwC will also be part of the panel. Jason Somrak Chief Financial Crime Consultant will moderate the panel, Oracle and (Jason)-[Loves]->(Graph). Come join us on September 24th between 3:45 PM to 5 PM to listen to insights on how using innovation, compliance investments can be turned into competitive advantages. Oracle experts will also be showcasing some of our innovative solutions addressing critical issues faced in fighting financial crime at Booth #200. We look forward to meeting you at the ACAMS 18th Annual AML & Financial Crime Conference between September 23rd and 25th in Vegas. Find out more. For more information on Oracle’s Financial Crime solution please visit our websites at: Oracle Financial Crime and AML Compliance Management: Webpage Oracle Financial Services: Homepage Contact us: Email: financialservices_ww@oracle.com            Follow us: Linkedin: https://www.linkedin.com/showcase/oraclefs/ Twitter: https://www.twitter.com/oraclefs

As regulatory scrutiny increased, and monitoring systems started to generate an enormous number of cases, the option institutions had was to increase manpower to handle the workload. Increasing...

Modern Risk and Finance

Oracle wins Asia Risk Awards – ALM Product of the Year 2019

Oracle is proud to win the Asia Risk Awards – Asset Liability Management (ALM) Product of the Year 2019 for its Asset Liability Management solution. Asia Risk Awards - Key Judging Criteria Amongst Asia Risk Awards 2019, the ALM product of the year is given to the technology solution that offers the most significant value add to end users from an innovation and risk perspective. The judging panel looks out for several critical criteria in determining the best of breed within each category, as follows: Innovation: looking beyond the ordinary in approaching existing or new business opportunities. Risk management: a clear demonstration of sound risk management practices that lie beyond innovation. Client references and feedback: how well innovations meet client needs, including satisfaction of customer service. Cross-asset structuring: mobilisation of the global markets business to move beyond a single asset class.  The editors, journalists of Risk.net and Asia Risk Magazine, together with a selected group of industry leaders, decides on the winner. For the 2019 assessment, the judging panel includes Peter Burgess, Independent advisor, formerly head of XVA central desk, CBA, Sid Dash, Research Director, CHARTIS RESEARCH, Colm Kennelly, CIO, BNP PARIBAS, Frederick Shen, Head Global Treasury Business Management, OCBC BANK. After several rounds of rigorous evaluations, Oracle has emerged top in the Technology category, for ALM product of the year, selected by the group of industry thought leaders.   A forward-looking approach Traditional ALM approaches tend towards reactive measures which are static in nature. This approach often leads to poorly originated exposures, resulting in tactical or strategic imbalances for the banks. Consequently, banks need to manage the incremental costs from the resultant risk.  Oracle’s modern, proactive ALM approach works in a multidimensional manner across the treasury, finance, risk, and business lines. It determines the best possible trade-off between profitability and riskiness by integrating the trading and banking book through several Fund Transfer Pricing (FTP) techniques designed to arrive at the target balance sheet profile. The solution uses FTP as a dynamic tool to incentivize growth or divest certain products, actively contributing to setting the target profile of the banking book. The solution also assists the ALM function in managing compliance with Liquidity Coverage Ratio (LCR), short-term liquidity metrics, funding concentration, and other regulatory requirements. This approach both reduces cost and improves risk management insights to add value beyond compliance. Case in Point – Bank of China (BOC) One client that has implemented Oracle’s ALM solution is the Bank of China (BOC). BOC faced the difficulty of capturing instrument-level characteristics of every customer relationship it has. The complexity increased because of its inability to measure interest rate risk accurately. The Bank also had an increasing volume of regulatory guidance coming from the People’s Bank of China (PBOC). Within this business backdrop, BOC needed sophisticated solutions to measure its exposure to liquidity & market risk accurately. Oracle’s ALM used standard customer level and ledger information for all performance and risk applications, and tuned customer behaviours for prepayments, price sensitivity and product selection to economic circumstances. It generated customer relationship level cash flows considering caps, floors, discounts, and other unique payment characteristics. It has pre-built reports and dashboards available that could be customized to the requirements of the PBOC and delivers Interest Rate Risk in the Banking Book seamlessly. The solution helped to simplify maintenance, operations, and enabled BOC to capture the characteristics of every customer relationship effectively. By understanding its customers, the Bank could assess their behaviours in different environments and its impacts on their bottom line. These benefits enabled the Bank to measure its sensitivity to market and economic circumstances better, managing their exposures, reducing excessive risks. The Bank was also able to speed up its reporting process, responding in time to the new requirements coming out from PBOC. Download the PDF View the article to discover more. For more information on Oracle’s Asset Liability Management solution please visit our websites at: Oracle Asset Liability Management: Webpage Oracle Financial Analytics Solutions: Homepage Oracle Financial Services: Homepage Contact us: Email: financialservices_ww@oracle.com            Follow us: Linkedin: https://www.linkedin.com/showcase/oraclefs/ Twitter: https://www.twitter.com/oraclefs

Oracle is proud to win the Asia Risk Awards – Asset Liability Management (ALM) Product of the Year 2019 for its Asset Liability Management solution. Asia Risk Awards - Key Judging Criteria Amongst Asia...

Financial Crime and AML Compliance

Why are small, medium financial firms more exposed to financial crime?

There is a trend of increasing scrutiny on financial crime by regulators across the globe. As a result, most sizeable FI’s have initiated investments to progress to the next level of maturity for their anti-financial crime (AFC) programs. However, small to mid-sized financial institutions or other businesses such as real estate, legal, casinos, money remitter’s, struggle to gain sufficient investments in compliance, and it often takes a lower priority compared to other business investments. So, what makes them more vulnerable? Executive Mindset Many small to medium-size institution executives perceive compliance as a drag on the business. Few firms believe that they are too small for the regulator to care about, or do not have the clear understanding on the applicability of the AML/CTF laws with respect to their business. Often businesses forget that compliance is a continuous process. Firms that fail to recognize that compliance needs to keep pace with changes in market dynamics are often caught red-handed by the regulators. The fines paid are multifold compared to the investments that firms could have made retrospectively. More recently, AUSTRAC’s audit notice to Afterpay offers a glimpse of the business ramifications – a dent on the stock price, and more broadly, the risk to business reputation. Business Relevant AML/CTF Program Absence of continuously updated, risk-based, business-aligned AML/CTF policy is a key risk. Anti-Money laundering measures should not be limited to an annual corporate audit/exercise. It needs to be something frequently visited by businesses as public scrutiny increases globally. Failure to stop the bad guys at the door There is a lack of proper due diligence at customer acquisition stage (identifying the suspects at the onboarding stage). Fragmented customer onboarding processes (with manual ID checks, screening, and risk assessments) often allows the suspects onboard successfully. Client onboarding is the best avenue to avoid the unnecessary costs of monitoring, reporting, and eventually off-boarding the potential suspects. Effective anti-money laundering practices can save businesses a significant amount of money, and the company risk reduces in the process. Lack of intelligent monitoring Once on board, the next opportunity to identify the bad guys is to monitor and flag their activities/transactions that trigger the red flags. Often small institutions don’t have a dedicated analytics team to assist with continual tuning, upkeep of internal rules for additional products, channels, and changes in behavioural (transactional) patterns. The lack of a dedicated analytics team adds to the burden of operational teams with more irrelevant alerts (high false positives) and a higher probability of missing out on true-positives. Fighting financial crime with poorly designed weapons To understand the challenges in monitoring, it becomes crucial to understand the legacy in this space. Small to medium-size players have long relied on either:   A home-grown monitoring solution with its challenges such as accountability, cost of change, model risk management. OR A shared AML/CTF solution (not 100% relevant to the business) with third-party aggregators conducting the monitoring on their behalf. OR A rigid vendor solution that is very expensive to change or upgrade or even keep operational. Why are these poorly designed/deployed solutions more susceptible to money laundering activities? To keep up with the changes in payment industry, the AML solutions need to be more dynamic. The challenge, however, is that majority of the tools to identify/stop them (currently) are not as dynamic. These tools are either limited by their aggregators’ services/solution or the time/cost to make the solution relevant to new behaviours. In addition to it, the micro transaction-level alert based focus hinders the investigators from gaining a more holistic view/context surrounding the triggered red-flags, therefore leading to more time being spent on investigation/gathering relevant details or incorrect disposition of red-flags driven by operational KPI’s. Sustainable compliance can be a reality for smaller businesses with the help of the right mindset, processes, and tools. Five considerations for cost-effective anti-money laundering programs Businesses should ask these questions while selecting a solution to their problems once they have the right mindset: How can the solution stay relevant without continuous vendor engagement or a large internal team to support it? Does the solution allow for holistic investigation (reducing time for dispositioning?) Does the solution assist them to keep the ever-increasing operational budget in check (leveraging Machine Learning etc.)? Does the solution remove the need for future upgrades (staying relevant always)? Most importantly, does the solution allow you to improve your risk coverage and at the same time, reduce your total cost of ownership? Oracle Financial Services Anti-Money Laundering Express Edition is a robust AML detection and investigation platform, designed specifically for the needs of small and mid-sized financial institutions. The product enables small and mid-sized financial institutions to stay compliant with regulations and become responsive to threats. Anti-Money Laundering Express Edition enables organizations to effectively monitor customer behaviour, detect suspicious activities, and make business decisions to counter them in real-time. All this while taking care of their business goals and appetite for technology investments.    For more information on Oracle’s Anti-Money Laundering Express Edition please visit our websites at: Oracle Anti-Money Laundering: Homepage Oracle Anti-Money Laundering Express Edition: Webpage Contact us: Email: financialservices_ww@oracle.com            Follow us: Linkedin: https://www.linkedin.com/showcase/oraclefs/ Twitter: https://www.twitter.com/oraclefs

There is a trend of increasing scrutiny on financial crime by regulators across the globe. As a result, most sizeable FI’s have initiated investments to progress to the next level of maturity for...

Financial Crime and AML Compliance

Thwarting financial crime in a hyper-connected world!

The age of hyper-connected world is here! Not too long back, the financial services industry witnessed a huge transformation with Digitalization and Open Banking as a result of which financial institutions and service providers from across industries came together to create newer business models and ecosystems that worked towards innovation and providing the best customer experience. While on one side hyper-connectivity worked beautifully to improve the end user experience, on the other hand the bad guys have equally benefited from it. They have leveraged the loop holes within the digital payment transformation system and the payment networks to successfully mask their money laundering and terrorist financing activities. Effectiveness and Efficiency – 2 sides of the same coin Digitalization has caused an exponential increase in the number of financial transactions, as a result of which archaic rule-based systems no longer serve the purpose of catching the bad guys in real-time and ensuring compliance to the AML/CFT regulations. These systems need to be extremely precise in the flags they raise, so that they are “effective” and therefore can reduce the probability of false positives- the biggest pain point hampering the “efficiency” of anti-financial crime departments in banks. Efficiency can improve only when the investigators are able to focus on the real suspicious cases rather than false positives, which in turn can help improve the effectiveness of the anti-financial crime objectives of the institution. Investing in intelligent systems that deploy advanced technologies like AI, RPA, NLP, Machine Learning and Graph Analytics enables institutions to be able to run through huge volumes of incoming transaction data in real-time and fish out “truly” suspicious transactions and augment financial crime investigators with the intelligence to analyze them. In the world of big data, these technologies can empower FIs to achieve much more from their networks. The FIs can leverage their network of internal and third-party systems in a hyper-connected world, to retrieve information about the customer, transaction, related accounts, and beneficiaries, feed the information into innovative analytical models, process and analyze them, and thereby ensure effectiveness and efficiency in their anti-financial crime compliance and investigation efforts. This opens up the possibility for these institutions to be innovative in the multitude of investigative scenarios and checks they might want to apply on data to nip the bud before it is too late, yet ensure superior customer service and keep lights on. Joining the collaboration + innovation bandwagon Regulators across the globe are also increasingly accepting the power of networks and advanced analytics to combat financial crime in the hyper connected world. The USA PATRIOT Act Section 314(b) by FinCEN permits financial institutions to share information with one another in order to identify and report to the federal government activities that may involve money laundering or terrorist activity. Not very long back the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Financial Crimes Enforcement Network (FinCEN), the National Credit Union Administration, and the Office of the Comptroller of the Currency (collectively, the Agencies) issued a joint statement to encourage banks under the Bank Secrecy Act, to consider, evaluate, and, where appropriate, responsibly implement innovative approaches to meet their Bank Secrecy Act/anti-money laundering (BSA/AML) compliance obligations, in order to further strengthen the financial system against illicit financial activity. Similarly the Financial Conduct Authority along with global regulators has formed the Global Financial Innovation Network (GFIN) to leverage the power of collaboration to innovate and share best practices both in terms of newer products for customers as well as combat financial crime. Few banks are already leading the path and testing waters to adopt these advanced analytical technologies as well as collaborate with their peers to combat money laundering and terrorist financing. Though quite a lot of them are yet to embark on these projects. Reasons could be one or many – lack of resources and expertise on advanced analytical technologies, internal conflicts or resistance to change, build vs buy decisions, etc. Oracle’s Financial Crime and Compliance Management (FCCM) suite of products have been specifically designed for organizations looking to thwart illicit financial behavior with advanced capabilities to monitor, detect, investigate and report suspected financial crime, as well as fully manage regulatory compliance requirements. Using Oracle’s expertise, financial institutions can centrally assess, streamline and manage associated operational and customer risks with respect to the organization’s end-to-end AML, Fraud, Know Your Customer, Case Management and Trading and Broker compliance programs. These broad functional capabilities are delivered along with state-of-the-art data management and advanced analytics capabilities. Visit Oracle at Booth H101 @SIBOS 2019 to meet our experts and discuss on how we can partner with you in your transformation journey to leverage the power of collaboration and advanced analytical technologies towards combating financial crime in a hyper-connected world! For more information: Website: www.oracle.com/goto/sibos Email: financialservices_ww@oracle.com Follow us: Linkedin: https://www.linkedin.com/showcase/oraclefs/ Twitter: https://www.twitter.com/oraclefs

The age of hyper-connected world is here! Not too long back, the financial services industry witnessed a huge transformation with Digitalization and Open Banking as a result of which financial...

Analytics

Oracle retains 2nd position in Chartis RiskTech100 2019 for the 3rd year running!

Oracle retains its 2nd best risk tech provider position in Chartis RiskTech100® 2019   Oracle won 5 category awards while being ranked 2nd in the Chartis RiskTech100® 2019 for the 3rd consecutive year. Chartis is a leading research and analysis firm that specializes in analyzing the systems, products, vendors, applications and trends in the global risk technology market. RiskTech100® – the most comprehensive independent study of the world’s major players in risk and compliance technology – analyzes and ranks top 100 firms in the risk technology space.  Oracle was ranked leader in following solution categories:   2019 Winner 2019 Runner-up Chartis categories Core Technology Functionality Solution Categories Data integrity & control Balance sheet risk management Risk & finance integration Financial crime – applications Risk data aggregation & reporting Liquidity risk & ALM   RegTech Industry Categories Banking   Oracle has consistently emerged as a category leader across multiple specific solution categories by Chartis across the year. The categories are listed below: IFRS 17 Technology Solutions: Market and Vendor Landscape 2019 Financial Crime Risk Management Systems: AML and Watchlist Monitoring 2019 Artificial Intelligence in Financial Services, 2019: Market and Vendor Landscape Financial Crime Risk Management Systems: Enterprise Fraud 2018 CECL Technology Solutions 2018 Technology Solutions for Credit Risk 2.0 2018 Balance Sheet Management Technology 2018 Data Integrity and Control in Financial Services - Market Update 2018 Not far behind Oracle has also been featured as a best of breed solution in the following categories. Risk as a Service for the Buy-Side 2018 Financial Crime Risk Management Systems: Know Your Customer 2018 The wins revealed the strength of Oracle’s technology with the OFSAA portfolio of applications and continued commitment towards providing world class solutions in the risk technology space. To read more about our solutions for banking industry please visit oracle.com/financialservices

Oracle retains its 2nd best risk tech provider position in Chartis RiskTech100® 2019   Oracle won 5 category awards while being ranked 2nd in the Chartis RiskTech100® 2019 for the 3rd consecutive year....