A successful anti-financial crime program depends on reliable and accurate data. Organisations face the challenge of managing the quality of ever-increasing data volumes. But legacy architecture constraints, poor data governance controls and lack of leadership buy-in makes that process more difficult.
Effective financial crime controls are dependent on those issues being addressed. Data availability and quality issues mean financial institutions can be ill-equipped to spot suspicious activity. This means detection and decisioning are ineffective and makes thorough investigation challenging.
There is significant quantitative analysis covering the use of data in many financial services contexts and domains. But there is limited analysis covering data within an EMEIA financial crime context.
In response, EY conducted an EMEIA-wide Financial Crime Data Survey of financial institutions. The EMEIA Financial Crime Data Survey focuses on the impact of data on systems and processes, data strategy and data investment within a financial crime context. It brings together insights and viewpoints from compliance, technology, data and analytics professionals in financial institutions across EMEIA.
The report focuses on four key themes that have emerged from the data and provides insights on the way forward for financial services organisations. Those themes include:
Data quality and data governance are key concerns
The most frequent challenges according to respondents stemmed from technology. A lack of data standardisation, accessibility, sourcing and data structures creates many issues. Root causes mentioned by respondents included fragmented systems, operational silos, legacy technology, poor data capture controls and lack of sponsorship or senior leadership buy-in.
Satisfaction with data management capabilities is low
Despite increased investment and focus on new technology partnerships to improve the effectiveness and efficiency of data operations, overall satisfaction with data initiatives is low. Respondents cited the need for cost-effective, sustainable and scalable solutions to help improve financial crime risk detection and investigation. There was a demand to better use innovative technology – such as workflow, analytics and process automation – to improve and accelerate risk detection and remediation.
Delayed action impacts the effectiveness of financial crime controls
Financial crime has been a hub for data innovation. Financial institutions have more freedom in how they can use customer data for the purposes of detecting and preventing criminal activity. Most institutions feel there is a potential to derive more business benefits from data innovation. Respondents cited the need to elevate senior leadership buy-in to help drive improvements in their data management capabilities.
Financial crime teams struggle to benefit from enterprise data initiatives
Enterprise-level data initiatives, such as cloud migration or innovations in data operating models, are not high on the priority list for financial crime teams. This could be because financial institutions are still operating in a reactive manner.
But the report identifies and explores three areas where financial crime capabilities can be enhanced:
Download the report below to see how your organisation can benefit from building a better data foundation for fraud detection.