Leading UK Financial Services Group: Risk Management

Its activities are organized into three businesses: UK retail banking, insurance and investments, and wholesale and international banking. The group is quoted on the London Stock Exchange and is one of the largest companies on the FTSE 100.

The client needed to upgrade its risk and regulatory compliance capabilities to meet changing requirements. Using its deep industry experience and regulatory expertise, Accenture implemented compliance and filtering solution software at eleven locations in five months. The client is filtering 125,000 cross-border payments daily and has the ability to meet its compliance policy.

A leading UK-based financial services group needed to upgrade certain aspects of its risk and regulatory compliance capabilities in order to meet changing and more challenging compliance requirements, remain market competitive and maintain overall high performance. To achieve its goals, the organization sought to:

• Automate its processes for sanctions filtering, improving its ability to filter payment transactions for sanctions compliance and replacing manual processes.
  
  
• Execute implementation and delivery of a new automated filtering system at speed to avoid any disruption to its businesses.

The UK financial services organization wanted a partner that had deep industry knowledge and experience in the payments arena and the capability to deliver a successful solution quickly. Because of its deep, global IT delivery experience and an existing relationship with this organization, Accenture became the logical choice to help drive this resource augmentation arrangement. Accenture served as project manager for the implementation and delivery a new automated sanctions filtering capability. Accenture’s central challenge was to overcome all delivery issues and execute at speed. Given its existing IT experience working for the company, Accenture brought a clear understanding of the company’s internal processes to the table, which was a significant factor in the success of the systems integration and technology consulting team it deployed.

Working on extremely tight deadlines, the Accenture team decided to implement a solution from Fircosoft, an industry leader in compliance and filtering solutions, at 11 of the company’s locations. The Fircosoft solution would allow the client to develop rules and lists based on¬---and in compliance with---those provided by national and international regulatory bodies. To manage hits generated by the filter, a solution from another leading provider, Pegasystems, was configured to support case management workflow needs and introduce new functionalities around supervisor approval, reporting and quality assurance processes as well as for the identification, investigation and release of possible false positive matches for sanctions.

During the project, the team overcame several challenges, including:

• Tight timelines combined with a requirement to follow set client processes with long lead times was addressed by rapid escalations at every point of the implementation to ensure that exception/fast-path processes could be adopted.
  
  
• Insufficient testing time was addressed by having the system and user acceptance testing run in parallel and executed by a single team.
  
  
• An inability to forecast expected volumes was addressed through a series of tuning exercises at each location where extracts of live data were passed through stand-alone copies of the filter to estimate volume of hits. This was needed for headcount planning.
  
  
• Implementing at 11 locations in parallel with process uniformity and insufficient time to pilot the implementation process before roll out was addressed by ensuring that key resources were flown in to the pilot site and the same resources were then made available, alongside key vendor consultants, to support all other sites with their go-live activities.

Accenture helped the client meet its risk and regulatory compliance requirements within an extremely short timeframe, executing implementation at 11 locations in five months and completing delivery faster than required. Development and release of future automated sanctions filtering capabilities are in progress.

In the client’s UK business, between 100,000 and 150,000 cross-border payments are filtered daily now, generating an industry standard 1.5 percent to 2 percent hit rate for investigation by the financial sanctions unit. There are more than 50 staff (including team leads and quality assurance teams) set up at the financial sanctions unit that investigate these hits using a case management tool. At international locations, there are more than 10,000 cross-border payments filtered daily across 10 sites. There is three to five staff at each location investigating hits. Staff numbers and the hit rates are expected to decline over time by up to 10 percent as a result of process efficiencies and further refinement of the filter rules.

The client is now able to complete automated sanctions filtering for cross-border payments to meet compliance needs as per its sanctions policy. In the future, the client will gain additional benefits such as the ability to build out sanctions filtering capability to include strategic solutions for other security procedures, such as anti-money laundering (AML) and know your customer (KYC) checks.