Financial Crime Compliance- Data Management Question 1 Your firm merged with another, smaller, regulated firm at the end of 2019. The two staff from the other firm who had handled its compliance investigations both left when the merger happened. Your firm’s senior management believes that the three staff already employed by your firm would be able to deal effectively with the compliance investigations for the new, merged, organization for years to come

Question 1

Your firm merged with another, smaller, regulated firm at the end of 2019. The two staff from the other firm who had handled its compliance investigations both left when the merger happened. Your firm’s senior management believes that the three staff already employed by your firm would be able to deal effectively with the compliance investigations for the new, merged, organization for years to come. You believe, however, that the staff are working at full capacity and are, if anything, under-resourced and need an increase in their numbers to avoid serious adverse outcomes.

a) What type of analysis will you implement and why?
b) What method(s) of analysis will you use and why?
c) After your research you record the following factors.

• There are three full-time staff dedicated to compliance investigations and that
  the number has remained unchanged since 2018.
• Each member of the team is contracted to work for 240 days throughout the year.

* In 2018 there were 93 compliance investigations during the year, taking an
average of seven working days to resolve from the first beginning of the investigation.
* In 2019 the number of investigations rose to 108. Although the types of
the investigation remained similar, the average duration increased by half a day to 7.5 days and there was a backlog of investigations not yet started.
* In 2020, owing partly to the merger, the number of investigations rose sharply to 127 and the average duration increased to eight days, even though the nature of the investigations remained broadly similar. The backlog of
investigations not yet started increased.
* In 2021, there were 136 investigations. The duration remained at eight days,
but the backlog of investigations not yet started increased further.

Question 2

Your firm has recently undertaken a staff survey. One of the high-level findings suggests that the level of compliance knowledge and awareness among the ‘second line of defense’ staff is uneven. You have been asked to design a compliance monitoring plan to test this finding more thoroughly and ensure that awareness is more uniform and that the appropriate culture is embedded in the second-line staff. Before you start the investigation, the head of compliance wants to understand your plan and how you intend to report on the current position and track any improvements as your plan progresses.

Produce a report for the head of compliance that:

a) outlines your recommended plan
b) uses appropriate visualization tools, including a relevant dashboard with the
appropriate headers, that you will use to record and report on your findings as you progress.

Question 3

You work for a small, regulated firm in Singapore with a relatively small client base. You are responsible for manually screening new applicants against a selection of checklists, including sanctions, PEP, and adverse media lists. The business is growing, so this task is becoming increasingly onerous and there have been times recently when you have not had the opportunity to do the screening for several days. The board initially suggested that the new applicants be onboarded immediately upon application, with your checks to follow on. You have already explained the regulatory requirements that mean that this process cannot be implemented.

As a counterproposal, write a report to your board to suggest the use of a commercially available automated AI, machine learning, and data-analytics system. The report should:

• highlight why the new technology application is needed
• acknowledge costs
• cover a proposed schedule
• detail how the technology will solve the current problems and how it will prevent future problems, and
• state how you propose to measure the success of the implementation if it goes ahead.