OWI Case Study
International Sharing Economy Reduces AML False Positives
How does the sharing economy scale their core business while adapting to evolving regulations and identity requirements expected of leading money-services businesses?
A sharing economy technology platform was emerging as an industry titan and preparing to IPO. The organization’s compliance team was focused on implementing business process improvements that would enhance the user experience and reduce the number of false positives flagged across its anti-money laundering (AML) program. The growing complexity of illegal activity schemes and enhanced regulations (e.g., NYDFS Part 504 and the EU’s 4th AML Directive) introduced additional challenges to adapt their processes to evolving compliance requirements. To prepare the organization for going public, the organization engaged OWI to define, assess, and improve their existing anti-money laundering (AML) capabilities to ensure compliance with state and federal requirements while also identifying operational efficiency areas.
OWI conducted a three-phased engagement, which included an initial assessment of the platform’s AML processes, procedures, and transaction monitoring tools. To kick-off the engagement, OWI facilitated an industry-wide strategy workshop that included participants from leading sharing economy platforms, FinTechs, and big technology companies. The closed-door session created a forum for industry professionals to share common pain points across transaction monitoring and in-demand capabilities, including reliable filing tools and enhanced alert and case triage.
As part of the detailed assessment, OWI conducted stakeholder interviews to identify process inefficiencies across disparate business units. The client’s AML program relied upon a mix of in-house systems and vendor solutions, which created workflow redundancies that could be eliminated with integrated alert and case management.
As a result of the assessment, OWI established reporting/dashboarding, audit capabilities, and automated workflows that would improve analyst efficiency and decrease risk.
By working alongside the Compliance and Technology teams to define the organization’s unique value drivers, OWI synthesized a Business Requirements Document for an AML case management platform. The engagement’s final phase included evaluating 41 individual AML case management solutions to aid the organization in a build vs. buy decision.
Using OWI’s proprietary vendor ranking methodology, our team empirically scored survey responses and identified a select number of suitable vendors for testing. By evaluating SAR/STR e-filing capabilities, workflow customization, and natural language processing (NLP) techniques, OWI narrowed down the top ten vendors for additional consideration. The assessment results also included tactical recommendations to create a more comprehensive view of transaction activity across the organization, yielding improvements to how their analysts evaluate risk, conduct investigations, and file accurate SARs.
As a result of the engagement, our client was able to gain internal alignment and approval towards a build vs. buy decision that would adequately prepare the organization for NYDFS Part 504 in the short-term and enhance their transaction monitoring capabilities in the longer-term. The team reduced operational inefficiencies by 38-45% and reduced false positives by an additional 10-15%.
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