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Financial crime at the heart of compliance transformation programs

PWCIn a context of increasing regulatory pressure, higher fines, and more sophisticated financial crime models, financial institutions are reassessing their financial crime operating model and conducting major transformation projects.

A deep reorganisation of financial groups

Historically, financial groups had addressed financial crime in a decentralised approach that did not provide a holistic view of the client and its risks. To meet regulatory challenges and to deal with complex multi-country and multi-entity financial institutions, this holistic view of the client has become crucial. To access it, financial groups are reviewing their governance and their means to tackle financial crime.

The need for transformation from a decentralised to a holistic approach begins with the implementation of a central governance that defines standardised principles and processes to be rolled-out in each of the group’s entities through different levels of consolidation. A certain degree of flexibility is necessary in these types of deployment, in order to allow each country to take into account the regulatory constraints imposed by local regulators when these constraints are more restrictive than those of the group.

According to Marielle Fernainé, Senior Manager at PwC France who has led several transformations in the financial crime function:

The success of such international projects relies on the ability to overcome high operational and organisational challenges.

At the heart of digitisation: data management, robotics and Artificial Intelligence

The search for gains in agility, efficiency, and productivity outlines the main technological orientations for financial crime, including, in particular:

  • Control of transactional and referential data ahead of monitoring systems, which requires substantial work on the governance, the quality, and the reliability of the information;
  • The implementation of learning models (Machine Learning), running on historical alerts and empirical data in order to refine thresholds and significantly reduce the rate of false positives, and thus the related reviews;
  • Numerous experiments based on advanced algorithms and unstructured data to detect new crime patterns and move from static risk management models to dynamic and predictive management;
  • Deployment of robots to handle repetitive and low value-added tasks.

For Jean Barrère, PwC France, Partner and Data Intelligence specialist, a new milestone in terms of data usage must be reached:

The technological and analytical solutions are mature and the experiments conducted by our clients are promising. The challenge now is to combine conviction and responsibility, and to deploy these innovations on a large scale, in line with regulatory demands and strong security constraints, beyond technology.

Humans at the center of the transformation

Facing these major transformations, recruitment needs are evolving to capture more complex profiles, combining financial crime expertise and analytical capabilities. The recruitment strategy must master the way to approach these rare profiles in order to recruit them and, more important, retain them. In addition to risk monitoring, these profiles are also responsible for developing and maintaining a financial security culture throughout the company. Their mission is to ensure that each employee is aware of financial crime risks in order to be able to capture them at the highest level of the chain, from the first interaction with the client.

Sébastien D’Aligny, Partner, PwC France responsible for financial crime issues explains that:

In a world in constant evolution and digitalisation, the Compliance function should recruit profiles able to tackle risks but also to leverage new technologies in order to anticipate, as soon as possible, new models of financial crime.

PwC has been supporting clients, helping them in the definition and implementation of their strategy to strengthen their financial crime framework. We structured our services around eight main workstreams based on the numerous models we have developed with our clients over the years: Risk Assessment, Scenarios design, KYC optimization and automation, Transformation programs, Data Governance, Data lakes implementation, IT solutions benchmarks and Change management to help raise awareness around those topics.

For more information, and to read the full study, visit the PwC France Financial Services Risk & Regulation webpage >>


© 2018 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisor.

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