“Being a [super]hero doesn’t mean you’re invincible. It just means that you’re brave enough to stand up and do what’s needed.” –Rick Riordan, The Mark of Athena

We have, perhaps unknowingly and unwittingly, created our most powerful weapon to fight against the bad guys—data. For that, we can thank the internet, social media and our need for immediate insight and answers. We have become a highly data-driven society, relying on different methodologies to analyze and view data to surface intelligence. As a result, the internet, built to be a data gathering tool for people, has morphed into a data gathering tool for machines, providing us not only with more data, but faster and better data. Society as a whole has become more aware of the importance of collecting as much information as possible. Companies are finding ways to learn more about their customers by closely tracking their day-to-day operations and creating various platforms to record their transactions—all of this as a quest to, quite simply put, know more.

Use Your Powers for Good

With the rise of Fintech, the next evolution in modus operandi is upon us. As is true in most scenarios, the criminals are always a step ahead. This calls for an even more urgent need to hone our skills and to create the right tools to maximize the use of our most powerful weapon. In the world of anti-money laundering (AML), the opportunities for this are incredible. With a mandate to financial institutions to identify and report suspicious activity, there is a general recognition that information possessed by financial institutions is crucial in the fight against crime. From the inception of the Bank Secrecy Act in 1970 to the enactment of the USA PATRIOT Act of 2001, financial institutions have become more empowered to use their powers for good: to use their data (and the data of others in some cases) to help law enforcement identify leads and develop links in financial crime investigations and to ultimately identify the nefarious actors that are infiltrating our financial system for evil. This should not be a world where the regulator and the regulated are at odds, but rather a world where they fight a common enemy together.

The core issue facing our industry is not what data to collect (or how to do so), but rather what to do once we have it. The amount of information available, both internally and publically, is enormous, and the potential to put this power to use is greater than ever. The challenge becomes how to build the right tools, especially when it seems that the only constant is change—change in the way data is collected, change in the way data is stored, change in the way data is used, change in regulations, change in organizational structures, change in technology solutions, and the list goes on. The only answer is to build today for change tomorrow.

Everything is Impossible Until Someone Does it

Though this may seem like an insurmountable task in the compliance environment, it is not. The key is to arm yourself with knowledge and the right league of people to join your quest. Think of technology, another industry leaning into the paradigm of constant change, as the Alfred Pennyworth to your Bruce Wayne; and the ironclad plan depends on having the right tools in your tool belt. In other words, by creating a strong foundational groundwork with modular, scalable capabilities, we can build iteratively while maintaining a sound program and progressively moving forward.

This concept is not a foreign one. In fact, it is one that we experience every day. For example, the cell phone industry has benefited from this model. Have you ever received a notification reminding you to update your phone? When a smartphone is launched, an improved version of the operating system is typically released shortly afterward. This provides an opportunity to fix bugs, deploy new technologies and learn from users to create a more robust end product.

To build today for change tomorrow requires a clear vision and road map. Here is a start:

1. Be “manumatic.” It is not about fully automating compliance or about relying solely on manual decision points. It is about understanding when you can automate and when you need manual intervention. Technology is not a silver bullet meant to fully replace people and processes. Rather, it should be supplementing, enriching and enhancing the process in order to help us be more effective and efficient. To achieve this result, make sure there are analysts and front-line users active in planning sessions. Fully understanding the process, pain points and user’s desire is key in building a system capable of maximizing efficiency and preparing for the practical and regulatory impacts of automation. Create visual documentation to describe your process as it relates to technology capabilities and try to use the same visuals and terminology every time you speak about your vision. This will become somewhat of an internal marketing exercise.
2. Be true to yourself and your experience. You do not need to suddenly transform yourself into a technologist or a data scientist. Building technology for compliance and AML is vastly different than designing technology to support a business process. Focus on your knowledge and expertise, and remain grounded in it so as to not get lost in the tech speak and feel the pressure to understand everything about technology. Part of this process is clearly defining your objectives while educating those with the technical skills of your needs. Explaining the “whys” and getting them excited about your long-term vision will go a long way. Everyone should feel safe to ask questions as many times as they need.

The goal of technology is to break down barriers, not create them

3. Do not be afraid of the ocean—or anything. Building today for change tomorrow may seem like trying to boil the ocean (one of the industry’s favorite sayings), but it does not have to feel this way. The goal of technology is to break down barriers, not create them.  Your compliance solution should give you the flexibility to build according to company-wide technology efforts. This means you do not have to sign up to build everything. Rather, you can prioritize and identify capabilities that will give you the biggest bang for your buck. Create your wish list of capabilities and do not be afraid to ask for a specific proposal from vendors or internal teams detailing how they can fulfill the wish list. Ask for their opinions on strategy. You will be able to separate those who are selling from those who are solving.
4. Channel your inner designer. Design with the appropriate users and audiences in mind (Pro tip: You are one of them!), and, where appropriate, get buy-in along the way. This is an opportunity to be smart about user interface, user roles/permissions and reporting metrics/dashboards. Use the interfaces to help guide progress in development and set expectations for those who are using it daily. It is possible to tackle short- to medium-term goals while planning for an ultimate point of arrival. To that end, be introspective, be flexible and do not be afraid to pivot when necessary. This is not a brute force exercise.
5. Re-think the way data is used. In turn, this will allow you to re-think the way the tools are built. Do not limit use cases to one team or group, or even a single discipline. Think about it as, well, data. This way, you can center your solution on building tools to properly handle the data; focus on specific capabilities rather than outcomes. For example, think about the ability to create a unified ontology across core data sets rather than building a normalized data repository specific to AML. Alternatively, think about a capability to conduct entity resolution rather than a tool that will link customers to an AML case. The more you manipulate your core data, the further away you are getting from the truth. Let the data be just that, data. Just add the right lenses and filters on top of it to get to intelligence.

With Great Power Comes Great Responsibility

With these core concepts down, you can start to really think about the impacts to your team. For example, changing the way analysts receive information will transform their development and effectiveness. Instead of desktop procedures that require entering a username and password 10 times to access multiple systems, imagine if investigative processes challenged analysts to think about mitigating and aggravating factors. Without the requirement of performing some of the more onerous and manually taxing tasks, analysts will have greater mental capacity to make the important decisions only a human can make. With the right tools in hand, organizations can reimagine team structures. Because many financial crimes functions require the same core investigative mindset, analysts can more easily receive training across topics and focus primarily on learning substance rather than process. They can be the superheroes they were destined to be.

Intelligence is a Privilege, and it Needs to be Used for the Greater Good of the People

The ultimate end state is to recycle and reuse the data that has been gathered through investigations and reviews to widen the feedback loop and deliver intelligence to decision-makers—both across the company and the industry more broadly. With better mechanisms in place to understand and use data within an organization, the intelligence shared will be better. Suddenly the world of AML becomes a more powerful tool, transforming a perceived cost center into an invaluable business and intelligence asset. The closer you get to achieving this goal, the greater the good. The future of AML is in our hands.

Angel Nguyen Swift, CAMS, vice president of compliance and financial crimes solutions, Enigma, former vice president of the Global Financial Crimes Compliance—FIU, American Express, New York, NY, USA, angel.swift@enigma.com.