In order to mitigate the number of false-positive alerts and hone your transaction monitoring system to the specifics of your business profile, Anti-money Laundering (AML) programs need to be tuned periodically. When implementing changes to their compliance program, financial institutions need to consider the operational impact and monitor the burden and overhead that could potentially be created. The key is to find the optimal mix of tuning and configuration to mitigate as much risk as possible while maintaining a highly efficient and robust operation.

However, the most important aspect of tuning is to ensure that the validation of configurations and thresholds are set up correctly so that suspicious transactions are caught by the institution’s transaction monitoring system. This typically occurs when thresholds are configured too high and the institution’s activities are not meeting these thresholds to trigger an alert. Periodic tuning mitigates risk by allowing the bank to re-assess the configurations and thresholds so that they are aligned with the changes in the institution’s business profile.

Our Experience

Matrix-IFS has performed dozens of tuning exercises for financial institutions around the globe across a myriad of transaction monitoring and sanctions platforms such as Actimize, Mantas, SAS, Fiserv, Feedzai, BAE Systems (Norkom & Netreveal), GiftsEDD, Verafin, Patriot Officer, Fircosoft, WLF, Wolters Kluwer and more.

Our Methodology

Based on our long-standing experience, we developed a robust tuning methodology that incorporates an in-house library of scripts (SQL) that simulate the majority of the most common AML typologies. These scripts can be configured to utilize the same key data elements used by the existing AML solution and mimic the rule/scenario to generate alerts accordingly. This way, our advisory team is not limited by any resource challenges that the bank may have in using their existing UAT environment. These scripts allow us to quickly rerun rounds of simulations for multiple rules simultaneously, providing a faster turnaround of results, reducing the burden on our clients’ resources and providing a competitive advantage for Matrix-IFS

Our Approach

As part of our methodology, when reviewing alerts during the Above and Below the Line testing stage, we use a very granular set of disposition options to extract the most detailed information to determine the quality of alerts. While not every alert may result in a SAR or a finding, some alerts can be considered more “worthwhile” to investigate than others. Understanding the quality of the alert will result in more finely tuned thresholds.