The Need for Business Intelligence Reporting at Merchants Bank

March 9, 2020 |

Managing risk is key to the success of any financial institution. To ensure regulatory compliance, information must be accurate, comprehensive, and timely.

All banks in the US must comply with strict regulations in monitoring potential fraud, money-laundering activity, and accounts tied to watch lists and sanction lists. Risk officers must comply with these federal regulations in order to protect their institutions from legal, reputational, and financial consequences.

  • The Bank Secrecy Act of 1970 (BSA) is a recordkeeping and reporting statute that applies to banking institutions.
  • The USA PATRIOT Act mandates that all financial institutions must develop and implement anti-money laundering (AML) programs.

In addition to federal regulations, all AML/BSA programs include a set of internal guidelines and board reporting used to analyze and ensure compliance, effectiveness, and operational efficiency of their AML processes. Accurate, detailed reporting is a crucial component in meeting both internal and external reporting requirements.

Merchants Bank looked to Systems Flow to provide business and data analysis and customized reporting services in support of their anti-money laundering program. As with many regional financial institutions, Merchants Bank lacked a team dedicated to reporting, and were unable to obtain needed information efficiently enough to meet regulatory guidelines.

Their primary challenge was management of transaction and case/alert data to ensure reports were reliable and timely. With inefficient retrieval and analysis of data that needed significant manual effort, it was difficult to process and confirm timely risk investigations.

Transparent Data with Customized Reports

Prior to our partnership, Merchants Bank spent valuable time and resources in manipulation of standard reports generated by their enterprise risk solution. Despite those efforts, two problems continually cropped up:

  1. Investigative work performed by each risk investigator was not visible to the chief risk officer
  2. Risk investigators could not quickly and easily locate or see case information and related transaction data, nor drill down into a case to understand its details

The result of this time-intensive manual endeavor and lack of visibility? Inconsistency in review of the investigative work and limited confidence in investigation outcomes, analysis and risk reporting.

To address Merchants’ critical reporting need, we brought in our business intelligence (BI) analysts — to learn and understand existing needs and issues, share expertise on a variety of industry-standard BI tools, and develop custom reports with SQL databases and scripts.

Information Access and Confidence

Merchants’ risk officer knew that information was scattered, coming from multiple sources and accessed via multiple methods; but did not have the resources nor depth of knowledge to solve this growing issue. We entered the picture, investigated the situation, and arrived at and implemented an effective solution.

Our BI analysts developed reports that integrated transaction data from these multiple sources and presented a single view of all data. Additional reports provided progress on critical cases and alerts, to confirm compliance with internal service level agreements (SLAs). This suite of reports delivered much-needed breadth and depth of information, in an easily digested and centralized view.

We learned what worked and didn’t work for Merchants Bank; and Merchants Bank took advantage of our skilled business intelligence experience:

  • Facilitation of stakeholder discussions
  • Analysis and documentation of reporting requirements
  • Analysis of the underlying risk data model, to drive report design
  • Report design and build, using a BI tool
  • Development of detailed, customized reports with SQL scripts
  • Data validation
  • Documentation of data load processes and report execution

Customized reports optimized Merchants’ management of risk by providing:

  • Easy access to all current and historical transaction data
  • A robust comprehensive view of underlying risk
  • Significant reduction of manual effort in data gathering and analysis
  • Increased operational efficiency, leading to cost savings and stronger regulatory compliance
  • Manageable solution delivery cost, as compared to customizations offered by product vendors

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