Case Management: Driving Cost Transformation, Achieving Operational Excellence

If you’re looking to bring greater transparency while developing a single view of your financial crime risks, then standardizing your case management is the way to do it.

The cost of financial crime operations has steadily increased and it’s driven by two main factors—increased volume of alerts and how operational units are managed. Financial crime analysts and investigators are facing increasing pressure each day as the volume of suspicious activity alerts from a multitude of systems requires their review. This workload is increasing at a rate that is much higher than the staffing levels required to complete this work. Work items that require review are directly correlated to the increase in transactional volume and new products. Secondly, most organizations have many operational units and systems, which leads to disparate processes and different levels of access to available data. This creates redundancy and inefficiencies which impacts overall costs.

Becoming actively aware of these factors can present an opportunity for senior leaders to drive cost transformation by focusing on “doing more with less”— creating more operational efficiency by tackling redundancies to achieve a singular, common holistic view of financial crime risks.

Breaking Down Financial Crime Silos

Financial crime-fighting units are generally siloed between different types of risk domains that include fighting fraud, combatting money laundering, and surveilling for market manipulation. These units are commonly separated to be closer to specific lines of businesses, their financial products, and product channels. Over time, this has created siloed processes with teams accessing a range of data sources, managing investigations and reporting metrics in many ways,  and filing regulatory reports differently. Overall, the industry has started to recognize that it can address the overlap, the redundancy of processes and systems, and build a better machine while driving cost transformation.

Let’s look at three themes to leverage a central case manager to drive operational excellence and transform the growing cost equation.

• Connecting the organization – connect people and systems and standardize workflows to achieve a single common view of risk
• Empowering the people – make faster decisions with entity-centric investigations and automation for low-value and repetitive tasks
• Optimize the teams – measure and monitor the operations of each risk domain to fine-tune the operations to ensure quality and consistent results 

Financial crime programs at financial services organizations are typically separated into different risk domains that include AML, Anti-Fraud, and Trade Compliance. There is a convergence trend to bring operational functions together, including cybersecurity, to ensure that the organization can have a holistic view of customer risk and bring efficiencies where overlap exists.  In each of these domains, it is not uncommon to have multiple systems that are close to the front-line business, while managing other systems on the backend. Due to these setups, operational units tend to have differing access to customer information, including transaction history, relationships, communications, disputes, beneficial ownership information and adverse media, as well as risk activity across products, cyber intelligence, and history of SAR filings. This presents an opportunity to strengthen operational excellence and to identify risk earlier.

Connecting the organization is imperative to achieving a common view of financial crime risk—everyone needs to be aware of entities under investigation, and have access to information that helps evaluate that risk that is generally already available to a part of the organization. Access to the same information provides transparency and creates more optimal collaboration between groups.

Using a singular case manager is not a “lift-and-shift” project. Rather, it focuses on maximizing the existing systems. They were chosen for a reason; however, they are generally self-contained systems with basic case management functionality. Centralizing their output into one case manager allows the cost of maintaining different generalized case managers to be rationalized into one dedicated for financial crime with an upstream cost reduction – technology maintenance, workflow standardization, simpler cross-training, and increased collaboration.

There are a variety of technologies to integrate a case manager with internal systems and third-party data sources, such as robotic process automation (RPA), custom development of plug-ins, coding to an API, or using prefabricated adapters that connect two systems.  Each integration technology has its pros and cons, but you should have these options at your disposal.

Empowering the people is about helping analysts be more effective and efficient at their jobs. Many operational units struggle to retain their analysts. Should that be a surprise? They signed up to fight financial crime and find themselves performing mundane tasks or waiting for information. Case management systems have a variety of tools to help increase the throughput of these operations. Connecting systems and data first helps make a single view of risk a reality. This means analysts can perform entity-centric investigations, where they can review a full picture of customer activity, their interactions, transactional history, past or current alerts from other units so that their view is not myopic. It is said that the human brain can process visual information 60,000x faster than text. A good case management system can create a visual story with this wealth of information.

Case management providers should also provide a variety of tools to automate the workflow. Some examples of best practices include:

• Identifying bottlenecks
• Work allocation strategies that consider timing, staff skillsets and language
• Ensuring steps and approvals are followed
• Gathering information from other internal systems and third-party data sources
• Providing downstream feedback to other systems such as front-line detection systems, a customer relationship management system, or a disputes system 

Optimizing the teams should be a continuous goal, not just a one-time project. Good governance measures and monitors the effectiveness of our teams and continuous improvement should be built into that culture. Case management systems today should provide quality assurance tools that perform a check and balance between analysts and QA teams. They also should provide modern reporting tools that include visual analytics built on top of the richness of the risk data. If you operate in an environment that deals with a lag in current metrics, or a burdensome change control process to review data in an agile way, then consider looking at your case management system as a potential solution.

In future writings, we will dive deeper into each theme by exploring where the common issues are today, which technology is best suited for the job, and how to choose the right path forward.

Today, risk and compliance programs may be considered cost-centers by the organizations that have them, but they are an absolute necessity to defend the organization from the criminal networks that seek to use our global financial system to steal, hide, and move their illicitly gotten funds. Since it’s usually not the core business for most, the pressure to do more with less will always be present. Cost transformation projects are not easy and can involve many different operational units to work together to succeed at a common goal. A good place to start is by looking at the tools and activities where the largest operational staff resides – you’ll likely find that the case manager is the common denominator that ties everything together.