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Enabling AML and FATCA compliance with a holistic solution

Financial Crimes are growing in frequency and complexity. New advances in technology provide malicious insiders and organized criminals more opportunity to commit crime. Additional regulatory guidelines, frequent internal scrutiny (audits) and increased complexity are all pushing financial institutions to continuously adapt their compliance programs. Today, financial Institutions are striving to offer an omni-channel experience to their customers through innovative products best suited to their needs. And all this calls for a strong foundation to handle compliance, regulatory and risk exposures.

Yashpal A Negi, Country Manager – Business Development and ISVs, IBM Global Business Partners – India/South Asia, IBM India said: “With IBM Counter Financial Crimes Management, organizations can proactively and more effectively combat fraud, AML and cyber threats. In doing so they can improve business results and potentially reduce losses, while maintaining a positive customer experience.”

A combination of internal development, strategic big data & analytics software, combined with service capabilities and cutting-edge analytic methods from 12 research labs; and more than 290 fraud-related patents – enable IBM to offer solutions for enterprise fraud management that are characterized by:
•Innovation: IBM is driving state-of-the-art advancements on a massive scale in machine learning and analytical techniques for managing risk within the financial crime lifecycle.
• Intelligence: The IBM Red Cell intelligence team and security-related offerings from IBM, such as IBM X-Force and Trusteer, can help an organization further reduce its exposure to threats and fraudulent activity connected with cyber-related crime and fraud.
• Simplicity: IBM delivers technical components in one integrated solution that can be applied to one or more counter fraud or compliance programs and processes.
The data, models, case components, reports and APIs are transparent, so you can configure aspects of the system to meet business needs.

Based on a recent survey, more than 60% of financial institutions are affected by Know-Your-Customer (KYC) regulatory changes and have experienced an impact on their compliance operations in a number of areas. Another study shows that traditional AML laws have proved to be ineffective and expensive.  Banks that have weak AML controls have suffered huge losses and have also been fined heavily for non-compliance. A prominent example is Sonali Bank (UK) that is 51% owned by the Bangladesh Government. Britain’s Financial Conduct Authority (FCA) slapped a fine of 3.25 million pounds ($4.04 million) on the bank for failures in anti-money laundering controls.

Taking cautionary measures, the Indian banking regulator RBI periodically issues circulars mandating Indian banks and NBFCs to comply with evolving AML standards. Indian laws also cover AML through the Prevention of Money Laundering Act 2002. In addition, the Financial Intelligence Unit – India (FIU) provides financial intelligence for safeguarding the financial system from the abuses of money laundering, terrorism financing and other economic offences.


With the globalization of businesses, banks have worldwide operations and transact with multiple countries/currencies; each country has its own laws and norms for AML. So banks must comply with all those laws through the use of a multi-jurisdictional AML solution or RegTech (Regulatory Technology). There are over 40 jurisdictions for AML globally. But it has been observed that there are similarities in norms followed by certain countries as they have adapted their laws from proven frameworks and follow common rules defined by FATF.

2016-11-21_121727Compliance also means adhering to standards defined by the Financial Action Task Force (FATF), an inter-governmental policy-making body. FATF sets standards and promotes effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.  FATF is an important body that has made 40 recommendations that banks should consider. These recommendations also cover trade of banned goods (nuclear fuel, drugs) that could potentially be sold to rogue nations or terrorists.

In addition, there are OFAC (Office of Foreign Assets Control) sanctions imposed on “high-risk countries” that pose a high risk to financial institutions.AML guidelines are based on global standards, beginning with the BSA Act in 2001 and then the Patriot Act (after 9/11). Title III of the Patriot Act is specifically about Anti-Money Laundering to prevent terrorism. This Act amends portions of the Money Laundering Control Act of 1986 (MLCA) and the Bank Secrecy Act of 1970 (BSA).

Broadly, AML compliance comes down to two things: Anti-Money Laundering and Counter-Terrorist Financing (CTF). A good AML solution should address both requirements. It should also keep up with amendments to global standards, which are becoming more stringent in light of increased terrorists activities in Europe and elsewhere in the world.


InfrasoftTech is a fintech company specializing in digital solutions and products for the Banking, Financial Services and Insurance sectors. InfrasoftTech offers a wide range of Banking Products, Framework based Solutions and Specialized Services serving a cross-section of financial enterprises – Retail & Commercial Banking, Investment Banking, SME & Asset Financing, Asset Management, Wealth Management, Brokerage, Capital Markets, and Payment Services.

The breadth of its product offering and services portfolio brings unique convergence of domain and technology. Its processes & execution methodology have evolved to align with different customer segments, ranging from Tier-1 multinational banks to mid-sized financial services organizations, small community or rural banks.

InfrasoftTech serves over 450 financial institutions across 36 countries. It has over 300 customers for its Core Banking Solution and over 160 AML sites in 32 countries. In India, 90% of Insurance companies and over 60 Indian banks use InfrasoftTech’s AML solution. It is also a leading AML provider in international markets such as the Middle East and Africa – and most Indian businesses focus on these regions. InfrasoftTech also covers South East Asian countries such as Vietnam, Philippines, Malaysia, and Indonesia.

Its OMNIEnterprise Compliance and Financial Crime Surveillance Solution (CFCS) offers a common platform to meet ever evolving AML compliance requirements and monitor financial fraud scenarios across customers, employees, agents and vendors. It is one of the very few global solutions that has been successfully implemented in multi-entity, multi-lingual and multi-currency environments — and provides complete coverage of FIU guidelines for banks, insurance companies, mutual funds, brokerages, currency exchange house and non-banking finance companies.

Rajesh Mirjankar, Managing Director & CEO, InfrasoftTech said: “With AML, we have the ability to provide multi-jurisdictional support for our clients like Canara Bank, which uses our solutions across 6 countries. Our solution is compliant with 32 jurisdictions at a minimum. It has various modules that address different aspects of AML. For instance, we offer a blacklist filtering feature that checks the names of the parties with who the bank is transacting with, to ensure that those names are not on that list. Then there is transaction scanning that searches for transaction types that indicate terrorist financing or money laundering.  We offer both STR (Suspicious Transaction Reporting) and normal transaction reporting.”

As rules and regulations evolve and become more stringent, the solution must also keep up with the revised norms. InfrasoftTech’s AML solution has a module for this called Enhanced Due Diligence (EDD) or Comprehensive Due Diligence (CDD). Many countries insist on having EDD and CDD standards.

“In addition to all this, our solution offers a feature called heat-maps for risk. You may have transactions with an incremental risk factor, which may not be identified in isolation as a high risk. But when you look at all the risks together as a cluster, you would identify this as a high risk. So this is the business intelligence capability which allows us to identify such outlier activity,” said Mirjankar.

The solution raises alerts and there are rules and actions to be taken. There is a Case Management Model for these actions. Serious cases which are violation of the law are reported to FIU-India.RBI has mandated that all banks must use anti-fraud solutions, and this will eventually include even the cooperative banks.  Since each bank’s definition of fraud differs, there isn’t a one-size-fits-all anti-fraud solution.

“To address this we first built the AML solution and then built the business intelligence capability on top of that. 2016-11-21_121755Then we built the artificial intelligence capability,” said Mirjankar. “The AI capability is based on the historic data and also the aspect of machine learning. Machine Learning helps in understanding the customer’s profile and also the bank’s risk perception. And the AI tool compares the activity of a particular client to an activity that was indicative of either a fraud or a violation.”

The AI engine and machine learning can also predict fraud based on customer behaviour and the pattern.


A Compliance and Financial Crime Surveillance solution should cover anti-fraud, AML, and FATCA. InfrasoftTech’s OMNIEnterprise CFCS is an Enterprise Grade solution that has modules for anti-fraud, AML, and FATCA. That is why it is considered a holistic solution.  It is developed on a single core risk platform, the solution shares data services, event triggers, and activity profiles. It provides analysts with a single customer view and integrated risk scores for suspicious activities. As a result, firms benefit from developing a true enterprise-wide AML strategy for a unified defence against money laundering risk.

Comprehensive Case Management & Workflow functionality of the solution leverages a web-based case management tool for efficient alert management, ad-hoc investigations, management reporting, and detailed audit tracking. Firms can also fine-tune thresholds and scoring formulas without the need for IT support.

Role-based dashboards help analysts and managers stay focused on high priority issues. Comprehensive reporting and dashboard functionality allows managers to quickly assess the overall effectiveness of the AML program and staff and take proactive steps to identify and resolve issues.


InfrasoftTech’s OMNIEnterprise AML Solution caters to the most basic requirements of FIU compliance for any financial institution. The compliance & risk management group at a financial institution must lay a robust foundation to manage anti-money laundering and anti-fraud risks.This solution is compliant with country-specific regulations in Asia, Africa, the Middle East, the USA and certain Latin American & European nations in addition to FATF, USA Patriot Act and EU Directives on Money Laundering.

The solution runs in multi-country, multi-entity scenarios. It is compliant with 32 jurisdictions across Asia, the Middle East, Africa, Europe and the Americas and has assisted 160 clients globally in meeting their regulatory compliance responsibilities.

Built on OMNIEnterprise n-Tier SOA architecture, this solution is platform and database independent, supporting Windows, Unix and Linux and has been implemented on Oracle, MS-SQL Server and IBM DB2 with successful integration with 40+ core back office systems globally.


InfrasoftTech is using IBM’s DB2 database for PSU banks’ AML sites. It has won tenders at Indian Bank, PNB, and Union Bank of India. In addition, there is potential for use of IBM’s technologies for machine learning and artificial intelligence, enabled by IBM Watson and IBM middleware.

DB2 is robust, scalable and fast and hence suitable for AML. Responsive and fast databases are essential for financial crime and surveillance solutions.

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