Best financial crime product: NICE Actimize

Operational Risk Awards 2017: Financial crime specialist scoops award for helping clients reduce costs

Nigel Broda, NICE Actimize

Anyone who walks into the office of a senior banker with the promise of slashing costs in half in a particular area is going to command attention. It’s a bold claim, but one that NICE Actimize, the New Jersey-based financial crime-focused technology provider, believes it can back up.

“Our objective is to reduce financial crime investigation time and costs by 50%. I ask financial services organisations to look at what they are spending now and what they think they will be spending in years to come and I suggest that the right technology strategy could cut that spend by half,” says Chad Hetherington, vice-president and general manager, case management solutions at NICE Actimize.

Financial crime prevention is big business these days, and in the wake of multiple market-rigging scandals, banks are under enormous pressure to make sure they are cleaner than ever before. Studies have shown that the reputational damage sustained from association with criminal activity can threaten the life of an institution.

Detection, when the culprit is fingered for wrongdoing, is only the starting point in any financial crime investigation, of course, be it fraud, money laundering or breaches of bank secrecy. There then follows the back-breaking exercise of data gathering and securing of evidence. This process is very hands-on, and can swallow huge amounts of time and human resources.

“Two weeks ago, we did an over-the-shoulder study at a top 10 European bank. We found that for every 30 minutes of a fraud investigation, about 27 minutes were spent toggling between sources and copying and pasting data,” says Hetherington.

NICE Actimize, which is a subsidiary of Israel-based NICE Systems, claims it can take a lot of the pain away. The firm has around 20 different software solutions, each of which deals with a different area of financial crime, and more than 300 clients, including top-tier banks as well as smaller players.

The firm is different from its competitors in that it is uniquely focused on financial crime and runs a single case management platform on which all of its products are based. While other providers often run separate solutions for each different type of crime, NICE Actimize leverages the same analytics throughout to deliver a unified product.

This specialised case management platform comprises three main components: anti-money laundering (AML), fraud and market surveillance. The framework integrates targeted operational and case management functions, which have proven particularly popular with clients.

“We are ready to launch a new financial crime platform strategy, with an updated approach to monitoring regulatory and compliance objectives. Early on, we recognised the benefits that a single, unified AML platform would provide throughout our institution,” says Sheila Leary, first senior vice-president and director of AML and Bank Secrecy Act compliance at Valley National Bank in New Jersey.

The breadth and depth of NICE Actimize’s solutions offers us many operational benefits while, at the same time, aligning well with our growth expectations,” says a senior compliance official at a financial institution that has invested in several NICE Actimize products. 

NICE Actimize has got off to a busy start in 2017, with a series of new products launched during the first half of the year. In March, it announced the introduction of a new investigation management offering, which is designed specifically to automate the evidence gathering process and thereby empower analysts.

In May, the company rolled out its robotics process automation (RPA) platform to free up investigators from low-value high-volume manual tasks so that they can focus on more important, strategic objectives. The RPA is being integrated within the enterprise risk case manager platform to reduce the cost of compliance and increase investigator productivity.

Both products are designed to get a machine to do what would take a human many hours to complete, thus saving banks money and freeing up compliance experts, taking them away from manual processes. It also offers the potential to reduce the overall compliance headcount banks will require in the future.

It is difficult to get an accurate figure for the proportion of compliance costs taken up by financial crime investigations, but, according to Hetherington, it is significant that the greatest number of compliance officers in banking are employed in investigations.

Hetherington estimates compliance, of which prevention and detection of financial crime is but a part, absorbed between 5% and 10% of a bank’s operating costs a decade ago, but now takes up between 10% and 15%. “For the top 10 banks, it costs literally billions of dollars a year. The people costs are huge,” he says.

Correction, June 26, 2017: This story has been updated to correct the number of customers using Nice Actimize’s platform.