Case Study

Corresponding banking: Improving Transaction Monitoring Controls (TMC)

Data | Banks | London

The Background

  • NextWave worked with Quantexa to enhance a major UK bank’s Correspondent Banking Transaction Monitoring Control Assessment (TMCAs) framework to improve risk topology coverage and process performance

The Challenge

  • The bank conducted an analysis and determined that a new technology solution was required
  • The primary findings were:

    - Corresponding banking risk typologies coverage could not be sufficiently addressed through legacy systems

    - Improvements to data completeness and data quality controls were also in need of improvement

    - The existing user interface provide and poor user experience, lacked features, and did not allow dynamic investigation

    - Legacy technology unable to align with the banks’ integrated platform and cloud-first strategy

    - Legacy technology was considered to be nearing its end of life and seen as a risk, and operating costs were deemed to be higher than was acceptable when compared to modern technology tools

The Approach

  • A new approach was designed using Quantexa to enable dynamic risk modelling of multiple score behaviours  (Value, Volume, High Risk Jurisdictions) across Corresponding Banking transactions at an entity and network level, using historical data as a reference to establish pattern changes

  • Additionally, the solution was designed to enable investigators with an easy-to-use interactive UI to forensically assess risk

  • The need to integrate a number of new data sets was identified to further enrich the entity resolution and risk scoring processes

  • A collaborative team of technology engineers, business and change specialists from the Bank, Quantexa, and NextWave was established

  • Quantexa’s Entity Resolution, Network Generation, Advanced Analytics, and data visualization capabilities were deployed
  • The team implemented the core product with configured Entity and Network-based scores specifically to detect Correspondent banking typologies

  • Starting with a POC and progressing through a two stage MVP that started in Jan’22 and completed in March’23

The Impact

  • Improved the detection logic with fast-adaptable configurations

  • Tuned altering logic and thresholds

  • Significantly enhanced/extended the transaction monitoring risk coverage capabilities

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