Part 2: Your Secret Weapons in Fraud Risk Management Compliance

On July 24, 2019, the OCC issued Bulletin 2019-37 Operational Risk: Fraud Risk Management Principles. In our first article in this series, we distilled the guidance down to its three component parts governance/culture, risk management, and reporting.  In this article, we cover the two central components of a compliant fraud risk management program. These are […]

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New OCC Rules on Fraud Risk Management

Part 1: Governance, Operations, Management   Introduction   On July 24, 2019, the OCC issued Bulletin 2019-37 Operational Risk: Fraud Risk Management Principles. The OCC guidance can be broken down into three components:   Governance/Culture Ethical standards and employee accountability.   Risk Management Operations Policies, procedures, processes, controls, personnel sufficient to identify, measure, monitor, and […]

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Model Validation: The definition, the origin and why you should be doing one

Introduction In this article, I will present updated fundamentals on what is an Anti-Money Laundering (AML) model validation as defined by the Office of Comptroller of the Currency (OCC) guidance. In an effort to provide oversight on the model validation process, I will demonstrate the definition, it’s origin, how that translates to its use in […]

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Explaining Explainability

What is explainability? There is a lot of chatter about it in relation to software applications, in particular those that leverage emerging technologies such as artificial intelligence (AI) and machine learning (ML). Regulators have been sort of blunt about use of these technologies: a firm can’t just buy and implement a new piece of technology, […]

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The “Red Pill” Realities of Anti-Money Laundering

Let’s put these numbers in perspective. 99% of laundered money is not caught. 90% of the resources spent catching suspicious actors are wasted. 100 % of US banks have known this for years. How did we get here? Modern technology, specifically data analytics, is well-suited to address this problem. Why hasn’t this problem been solved? […]

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AML in the Age of Cryptocurrency (Part 1)

Introduction Virtual currency businesses get caught in the anti-money laundering (AML) web both coming and going.   Financial services businesses such as banks view them as suspect customers and suspect business partners, and either flee or impose stringent information requirements and onerous ongoing monitoring.  Meanwhile, the banks may be filing secret reports with the U.S. federal […]

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