Naima Essing, an analyst with ALM Intelligence, caught up with Steve Beattie, EY's Financial Crimes Operations Solution leader and Jake Jacobson, EY's Managed Services CIO and Chief Product officer at EY's new wavespace innovation center in New York to discuss their financial crimes consulting offering.
ALM Intelligence: What are the major trends you are seeing in the compliance consulting market?
Beattie: There is an overwhelming sense of fatigue by financial institutions after the wave of post-crisis regulation. Financial institutions threw enormous amounts of time, money and people resources in putting programs in place to achieve compliance with a myriad of new and constantly evolving requirements and expectations over the past decade. Though there is a feeling we may have hit a peak in regulation under the new presidential administration, spending by financial institutions remains elevated. The nature of the expenditure, however, is changing. With operating costs 25 percent higher on average than before the crisis, many institutions are under intense pressure to find ways to lower their compliance costs while maintaining the quality of their programs and this need is driving a second wave in spending by financial institutions on new digital and analytical technology solutions that are capable of dramatically improving both the efficiency and efficacy of the detection, monitoring and reporting activities that make up compliance programs.
Jacobson: We see a massive opportunity for using digital technology and advanced analytics to reduce cost, improve quality and ultimately transform financial crimes compliance operations. Advances in the digitization of unstructured data, robotic process automation, machine learning and artificial intelligence are fueling new methods and solutions that can replace current laborious, manual and paper-based methods and are giving rise to a new ecosystem of vendors seeking to provide best of breed solutions. Our clients are eager to achieve these benefits but are unsure about which technologies and what vendors best suit their needs.
ALM Intelligence: How is EY addressing these client concerns?
Beattie: Over the years, we have partnered with our clients in developing numerous targeted solutions that optimize activities across the full breadth of financial crimes operational processes including know-your-customer, transaction-monitoring, alert investigations, model governance and so on. For example, our Cognitive Investigator incorporates data integration, machine-learning algorithms and robotic process automation to automate case scoring and prioritization and data gathering and report drafting in a manner that not only enables faster and more accurate case resolution but also significantly reduces manual paper-based workflows—up to 70 percent in one specific client situation.
ALM Intelligence: How are clients responding?
Jacobson: We see that clients are eager to achieve the benefits of these new technologies, but they are less interested in the details of execution, and quite frankly, less enthusiastic about executing on another large-scale transformation. Consequently, more clients are asking us to not only build their compliance platform but also to run it on an ongoing basis. This trend is the genesis of our secure global delivery platform. Our platform provides a flexible and scalable regulatory solution that leverages both our own and third-party vendor solutions to meet a wide variety of client challenges across multiple domains.
ALM Intelligence: What makes your platform special?
Beattie: We not only bring our big data, analytics, and technology expertise but also our global knowledge of tax, laws and regulation and credibility with government and law enforcement authorities to help all sized financial institutions use technology to transform how they comply with local jurisdictional rules in a globally consistent and sustainable manner.
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