Customer Information Data Management Systems
New Pitney Bowes Screening Solution Improves Compliance and Reduces False-Positive Results for Financial Service Clients
Automated technology expected to save financial institutions nearly $10 Million annually in cost reduction.
STAMFORD, Conn., Pitney Bowes Inc. (NYSE: PBI), a global technology company that provides commerce solutions in the areas of ecommerce, shipping, mailing, and data, today announced a new screening solution to help financial service providers more accurately verify the identities of their customers to help achieve regulatory compliance in the areas of sanctions screening and watch list management.
Known as Pitney Bowes Spectrum Screener™, the solution has been found to reduce the amount of false-positive detections by nearly 60 percent and deliver cost-savings of up to $10 million annually for large-scale financial institutions. At the same time, it can help alleviate challenging regulatory, Know Your Customer (KYC), and customer identity compliance issues that confront the industry today. Organizations like EY are already taking advantage of Spectrum Screener to address compliance regulations.
“As a part of the value our financial crime managed service delivers to clients, EY seeks to provide differentiated technology capability that improves the overall effectiveness and risk outcomes of our clients’ compliance processes and controls,” says Carl E. Case III, Principal - Financial Services Office, Ernst & Young LLP. “Technology solutions that employ graph technology and advanced analytics, such as Pitney Bowes Spectrum and Spectrum Screener, enable us to address many of the industry’s challenges with false-positives caused by poor data quality in either customer records or watch lists.”
According to a recent Aite Group report, “The AML of Tomorrow: Here Today,” the United Nations Office of Drugs and Crimes estimates that two to five percent of Global Domestic Product (GDP) is laundered annually, which translates to $800 Billion-$2 Trillion. As if the responsibility for AML and detecting terrorist financing weren’t enough, financial service providers are also on the hook for global anti-corruptions sanctions screenings, and reputational risks, cites the report.
Today, financial service providers spend millions in compliance infrastructures (U.S. financial institutions each spend approximately $15.8 Million alone), with a large portion of the spend attributed to human capital. One bank in the Aite Group report employs roughly 5,000 people who are tasked with investigating these transactions and filing Suspicious Activity Reports (SARs). Unfortunately, many systems used to detect suspicious activities result in 95-98 percent false-positives.
“Regulators expect financial institutions to find every needle in the haystack — false-negatives are not acceptable. This expectation leads to an abundance of false-positives in many current solutions,” says Julie Conroy, Research Director for Aite Group. “Pitney Bowes Spectrum Screener is a great example of a next-generation screening solution focused on reducing false-positives and alleviating the investigative burden.”
Without automatic screening solutions that identify and de-duplicate parties, financial service providers struggle to look across all lines of the organization and determine if an entity (person or business) is the same across various business lines. Often, this lack of view can cause false-negative alerts, which will ultimately result in fines if missed. Therefore, most FinServ organizations create alerts on too many transactions, or false-positives, creating an increased investigative burden on an already overworked staff.
Spectrum Screener reduces the investigation burden for financial service providers by analyzing customer data across the organization, resolving identities and matching those identities against cleansed sanctions lists, prohibitions, Politically Exposed Persons (PEPs), as well as lists created internally within an organization. Beyond customer data, Spectrum Screener combines technologies like Natural Language Processing, advanced analytics, and machine learning to improve overall match confidence.
“With Spectrum Screener, our initial implementations have proven to reduce millions of dollars in operations expenses, reduce burnout and turnover, reduce training expenses, and ultimately improve productivity and compliance,” says Bob Guidotti, EVP and President, Pitney Bowes Software. “We’re removing some compliance complexity for our clients and offering the peace of mind that then allows them to focus on investigations that pose a real threat.”