Program and Project Management

Financial Crimes projects are complex due to the sheer number of individuals, business lines and technologies involved and how all of these elements interact and dependent on one other can be confusing.  Hence, proper planning at the beginning of the project is a key component to ensure the success of the program.  When the program management phase is not properly planned it could lead to many issues, but one of the main consequences of improper planning is the unnecessary expenditure of a program's finances.  The expenditure of a program's finances doesn't always equate to progress and it is vital to spend enough time in the planning phase to ensure the proper resources will be available at the appropriate time to limit wasteful spending.

Business Requirements

Business requirements come in many different forms and from a multitude of stakeholders on financial crimes projects.  Depending on the type of financial crimes solution the financial institution is implementing there could be a quite diverse group of stakeholders.  The requirements for transaction monitoring projects will generally come from the compliance department as they are the main stakeholder.  However, for an enterprise know your customer (KYC) project will require the involvement from the client-facing business lines, compliance and sometimes a risk officer.  Hence, obtaining each business line's unique set of requirements is crucial for the project to succeed.  Also, there could be times where the requirements of each business line are in conflict with one another and this could require negotiations to ensure both groups mandatory requirements are met and the "nice-to-haves" are prioritized accordingly.

Risk Assessment

Financial crime risk assessments require an experienced group of professionals to complete satisfactorily.  A thorough risk assessment will require an in-depth review of products and services offered by the financial institution and the processes in place to address those risks.  The risk assessment will require knowledge of the financial institutions operations and product offerings, but there is also a quantitative aspect to the assessment.  The risks must be categorized into buckets such as low, medium, high and very high to guide the financial institution on what elements of its business and operations need to be addressed immediately, in the near-term and long-term.

Customer risk rating methodology

Developing an enterprise customer risk rating methodology can be quite a daunting task.  First, the financial institution must set a benchmark for what it considers risky which can be cumbersome in a global institution.  Second, the financial institution must implement the risk rating rules it has chosen, but this can lead to a fragmented view of the customer.  In other words the financial institutions should address the holistic view of the customer or de-duplicating the numerous representations of the same customer in various business lines before applying a holistic risk rating methodology to its customer base.